The Sob Stories of Madoff’s Wealthy Victims

By
Thursday, December 18, 2008 at 10:40 am

Speaking of Bernard Madoff — and who isn’t, these days? — the inevitable next chapter of this saga is the first-person tales of woe from his wealthy victims. The Daily Beast steps right up with a piece by Alexandra Penney, a New York artist, and former editor of Self magazine, which seems somehow fitting.

Did I say piece? Actually, the Daily Beast calls it a “wrenching saga” of how Penney lost her fortune.

Here’s Penney, describing the way she pondered her future, after learning she’d lost everything:

I began to think about my options: I’d have to sell the cottage in West Palm Beach immediately. I’d need to lay off Yolanda. I could cancel the newspaper subscriptions and read everything online. I only needed a cell phone. I’d have to stop taking taxis. And who could highlight my hair for almost no money? And how hard was it to give yourself a really good pedicure?

Then there is my jewelry. I’ve always collected nice watches and pearls. In the back of my mind I’d think, “Buy good stuff because if you’re ever a bag lady, you can sell it.” It might have been a rationalization then—but here I am now: The nightmare may be coming true.

Look, no one deserves to be ripped off, and everyone has sympathy for those in shock from losing their life savings. But Penney also talks in this piece about how she got involved with Madoff to begin with – and part of this story really should be about the networking among the wealthy and well-connected to get in on a piece of the Madoff returns. They didn’t succumb to a cold call from a broker. Madoff’s funds were an accessory available to only the selected few, as exclusive as a Birkin bag.

Again, from Penney:

I suddenly had a lot of money. I was in my late 40s, and I felt that I was just too old to have it in a plain old bank account. But I was a creative person, not a savvy investor, so I asked around and talked to my smartest friends with Harvard and Wharton MBAs. There appeared to be a secret society of Madoff investors. A friend who was older, wealthier, and more established somehow got me in. I’ve always had good luck, and I thought it was another stroke of good fortune to be invested with the legendary Bernard Madoff.

Every month I got detailed statements, and my money looked to be growing around 9 to 11 percent. It didn’t seem greedy because I knew people other people who were making 15 or 20 percent. I thought, “This is just a very smart investor.”

If anything comes out of this economic crisis, it will be that people with financial degrees from fancy schools often aren’t really all that smart, are they?

Anyway, back to Penney. She’s got more problems ahead than losing her Florida seaside cottage. The part that stuck with me is her freshly ironed white shirts. She’ll no longer be able to pay Yolanda, her domestic, to take care of that task. From Penney:

I wear a classic clean white shirt every day of the week. I have about 40 white shirts. They make me feel fresh and ready to face whatever battles I may be fighting in the studio to get the best out of my work.

How am I going to iron those shirts so I can still feel like a poor civilized person? Even the no iron ones need touching up.

Yolanda makes my life work. She comes in three mornings a week, whirlwinds around, and voila! The shirts are ironed, the sheets are changed, the floors are vacuumed. She’s worked with me for seven years and is a big part of my life. She needs money. She sends it to her family in Colombia. I have more than affection for Yolanda, I love her as part of my family.

On Friday, I tell her I have had a disastrous thing happen to me, but I don’t have the guts to tell her I cannot keep her with me any longer. I’ll wait till Wednesday.

I think I can help Penney here. Everyone I know gets those no-iron white shirts from Target. Then you don’t have to pay someone to iron them. You can even switch to t-shirts and those always go one sale there! Besides, Yolanda, it seems, has bigger problems on her plate than a lack of crisp, white shirts. I’m glad Penney at least acknowledges that.

But then she moves on. She’s not going to spend her golden years, it seems, dividing her time between her New York artist’s pad and the Florida cottage. She has “terrifying thoughts” about ending up in what she calls a state-run old people’s home, with “slow-eyed” attendants who drug you and strap you to your wheelchair.

I believe the proper term is “nursing home,” and millions of people who didn’t benefit from fraudulent returns end up being cared for in them. It’s sad, and it’s hard on their families, but often there’s no other choice. Some nursing homes are run well, and abuses occur at others, and in most cases there’s not enough money from the state, the federal government and the private sector to make them better.

But wasn’t this woman an editor at a national magazine? Did she ever think, back then, about applying her journalistic clout to afflicting the comfortable and comforting the afflicted? I don’t remember any nursing home exposes at Self magazine, although I’m sure I could have found tips on finding an eyeliner that didn’t run and losing those last five holiday pounds.

Maybe I’m being unfair. Penney noted that she was a divorced, single mother in the 1970s, and she worked lousy jobs to claw her way back into money and prestige. Good for her. Too bad those heady returns from the Madoff years, and her exclusive membership in the Madoff fraternity, seems to have clouded those memories, leaving her just like everyone else she knows. Another wealthy sucker.

Categories & Tags: Economy/Finance| | | |

Comments

10 Comments

sozelli
Comment posted December 18, 2008 @ 9:14 am

Attached is an article I wrote regarding the US tax implications
of risk management transactions of hedge fund managers. Some of the
tax analysis could apply to Madoff and his foreign investors as well.

Selva Ozelli, Esq, CPA

http://www.hedgeweek.com/download/259124/Commen…


Steven Earl Salmony
Comment posted December 18, 2008 @ 1:36 pm

Perhaps hubris, corruption and greed have unexpectedly resulted in the colossal collapse of the global economy.

In a world in which too many politicians are posers; too many economists are deluded; too many business powerbrokers with great wealth are con artists, gamblers and cheats; and many too many absurdly enriched minions/’talking heads’ in the mainstream media parrot whatsoever serves political convenience and economic expediency, Jim Hansen's truth about global climate change is buried amid cascading disinformational and anti-informational garbage derived from a `tool box’ of pernicious rhetorical devices.

Do you think we have reached a point when we can say, however tentatively, that the global manmade economic colossus {a veritable and proverbial, modern Tower of Babel in all its glory} could crash before the overproduction, over-consumption and overpopulation activities of the human species worldwide collapse the frangible biological systems and finite physical resources of the planetary home God has blessed us to inhabit and not to ravage, I suppose?

Steven Earl Salmony

AWAREness Campaign on the Human Population,

established 2001

http://sustainabilityscience.org/content.html?c…


T Rustmaster
Comment posted December 18, 2008 @ 6:16 pm

Madoff Carefully Selected HIs Victims.
Note that most of the truly wealthy “investors” had to work the “secret system” to be able to get Bernie to handle their money. Bernie only took money from those that were filthy rich. Very few of his investors had earned their money. For the most part, the money they had and lost was inherited or stolen in a courtroom.
Now there will be a big push by them for congress to make them rich again – with our money!
No, no, and no again. They knew the game and played. Perhaps they should all be asked to return the money that was “earned” and given to them by Uncle Bernie.


beacritic
Comment posted December 18, 2008 @ 9:29 pm

Here in Michigan I have about as much sympathy for her as she does for the auto workers


Mom
Comment posted December 19, 2008 @ 8:43 am

I'm betting Yolanda is illegal. Even if she isn't I'm also going to bet Alexandra hasn't been contributing to Yolanda Social Security or any other required payments. It'd going to suck a lot worse for Yolanda. She doesn't have a cottage to sell. Or watches and pearls.

I'd like to hear more of Yolanda's coming troubles. Even 'broke' Alexandra will be wealthy.


Kevin1978
Comment posted December 19, 2008 @ 1:13 pm

If there was ever a silver lining to this Ponzi scheme, it's that Ms. Penney (aka, the former editor of SELF-ish Magazine) is finally realizing that kharma has caught up with her. This is a woman who threw people out on the street from their jobs at the magazine, including an art director who was 7 months pregant. Reason: NONE So Ms. Penney, here is the sweet revenge that so many of us who despise you have been waiting for. Take your white shirts, tie them into a rope and go hang yourself.


CB
Comment posted December 22, 2008 @ 9:00 am

Yes, you are being unfair. But mostly you are just petty and jealous of this woman's former success and wealth. As you are unable to have the same success you are bitter at others who achieve more than you, and in your eyes, do not deserve it.

It is shameful to see people so consumed by schadenfreude – it amounts to saying people like this deserve to be robbed and destroyed. That makes you as bad as Madoff.


Lynnie H.
Comment posted January 6, 2009 @ 4:38 pm

I know what is like to wake up and have lost all your money. My ex-husband did that to me. It is horrible but I lived through it raising two infants with disabilities. What upsets me is the comment regarding friends bailling her out. She has friends with money that will pay for her hair. This woman's situation is sad but she has some support. Me, I never had anyone. None ever put their hand in their purse for me.


Lynnie H.
Comment posted January 7, 2009 @ 12:38 am

I know what is like to wake up and have lost all your money. My ex-husband did that to me. It is horrible but I lived through it raising two infants with disabilities. What upsets me is the comment regarding friends bailling her out. She has friends with money that will pay for her hair. This woman's situation is sad but she has some support. Me, I never had anyone. None ever put their hand in their purse for me.


b
Comment posted April 27, 2010 @ 1:40 am

that is a terrible thing to say.


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