Local Investors Say Madoff Suicide “Tragic”
BOCA RATON (CBS4/AP ) — The eldest son of disgraced financier Bernard Madoff hanged himself by a dog leash in his NY apartment Saturday. He was found after his wife, who lives in Boca Raton, became concerned.
Several investors who lost money to Bernard Madoff told CBS4 News the death is “tragic.”Mark Madoff said he had felt two years of “unrelenting pressure” following his father’s arrest in a multibillion-dollar fraud that enveloped the entire family, law enforcement officials and a family attorney said.
Madoff was found hanging from a ceiling pipe in the living room of his SoHo loft apartment on Saturday, the second anniversary of his father’s arrest in a multibillion-dollar Ponzi scheme that swindled thousands of investors of their life savings.
His 2-year-old son was sleeping in the next bedroom, the officials said.
Ilene Kent, whose parents live in Palm Beach County and invested heavily with Madoff since 1992 said she was “devastated” by news of Mark Madoff’s suicide.
“It’s beyond words and I have such sympathy and empathy for his wife and his children,” Kent told CBS4’s Carey Codd. “This is a life lost and a father gone and a husband gone and it’s very, very sad.”
Investor Stephie Halio from Boca Raton said, “I think it’s tragic. It’s a waste of a life. I offer my condolences to his family.”
Madoff, who reported his father to authorities the day after he confessed his fraud to them, has never been criminally charged in the investigation that has snared a half dozen Madoff employees. He and his brother Andrew have said they were unaware of their father’s crimes. But they have been remained under investigation and been named in multiple investor lawsuits.
Mark Madoff’s lawyer, Martin Flumenbaum, said after the 46-year-old had taken his own life Saturday.
“This is a terrible and unnecessary tragedy,” Flumenbaum said in a written statement. “Mark was an innocent victim of his father’s monstrous crime who succumbed to two years of unrelenting pressure from false accusations and innuendo.”
The law enforcement officials, speaking on condition of anonymity because they weren’t authorized to speak publicly about the death, said that Mark Madoff’s wife Stephanie, who is living in a home near Boca Raton with another son, became concerned about her husband after he sent an e-mail to her Friday night or early Saturday morning that someone should check on the 2-year-old child with him.
Madoff’s wife, who has petitioned to change her name and that of her children, has not commented since word of the suicide became public.
She asked her father to check on the home, where he found Madoff’s body; the child was sleeping in a bedroom unharmed. A dog was also found in the apartment, the officials said.
Bernard Madoff, 72, swindled a long list of investors out of billions of dollars. He admitted that he ran his scheme for at least two decades, cheating thousands of individuals, charities, celebrities and institutional investors.
Losses are estimated at around $20 billion, making it the biggest investment fraud in U.S. history.
He was arrested on Dec. 11, 2008, after confessing his crimes to his family.
Saturday also marks the deadline for bankruptcy trustee Irving Picard to file lawsuits to recover money for investors. He has filed hundreds of lawsuits against investment banks, major investors and others who profited from Madoff’s Ponzi scheme. That includes a number of lawsuits against smaller investors who may have taken more money out of their fund than they put in.
These lawsuits are called clawbacks and the money would be used to pay back those who lost money to Madoff.
However, Kent believes suing the smaller investors is wrong.
“They’re being told sorry your account statement means nothing, there’s no insurance for you and by the way all the checks you wrote on this account, we want that money back,” Kent said. “These were everyday people who built their businesses from nothing and they’re only quote crime is investing it with a man who turned out to be a thief.”
Kent’s organization — the Network for Investor Action and Protection — said in a recent letter to Picard that they applaud efforts to recover money from those who helped Madoff or should have known his business was a fraud. However, they said innocent investors with no knowledge of the scheme should be protected.
“Clawbacks are intended to pay back people who never took anything out and by the trustee’s own calculations, he only needs $5.8 billion dollars to do that and he has lawsuits well, well, like ten times in excess of that,” Kent said.
Kent said hundreds of investors are worried they might soon be served with a lawsuit seeking money they don’t have.
“You’ve got a lot of people — mostly older people — sick people who really are just terrified because the laws they thought were there to protect them are being used against them,” she said.
Victim Stephie Halio agrees, although she and her husband lost their entire retirement savings to Madoff and returned to work in hopes of saving their home, and might stand to recoup money from clawbacks of other smaller investors.
“I wouldn’t want to take bread off the table of innocent victims,” she said. “I think it’s so sad to sue people who’ve lost so much and expect them to pay more.”
Since the scandal came to light two years ago, it has cast a harsh glare on members of the Madoff family. The financier’s brother, Peter, played a prominent role in the family’s company. Mark and Andrew Madoff both worked on a trading desk at the firm, on a side of the business that wasn’t directly involved in the Ponzi scheme.
In February, Mark Madoff’s wife petitioned a court to change her last name and the last names of their two children, saying her family had gotten threats and was humiliated by the scandal.
A year ago, the court-appointed trustee trying to unravel Madoff’s financial affairs sued several relatives, including Peter, Mark and Andrew, accusing them of failing to detect the fraud while living lavish lifestyles financed with the family’s ill-gotten fortune.
The lawsuit accused Mark Madoff of using $66 million he received improperly to buy luxury homes in New York City, Nantucket and Connecticut.
A call to Bernard Madoff’s attorney was not immediately returned Saturday. Calls to the FBI and U.S. Attorney’s office were also not immediately returned. Previously, spokespeople for the brothers had repeatedly denied that they had any knowledge of their father’s crimes.
Bernard Madoff is serving a 150-year prison sentence in North Carolina after admitting the fraud in late 2008 to his family and later the FBI. Bureau of Prisons spokeswoman Traci Billingsley said Saturday she didn’t have specific information on whether Bernie Madoff had been informed of his son’s death or would be allowed to attend a service. In general, she said, inmates are informed of a relative’s death as soon as the institution is made aware of it and the bureau does allow furloughs for prisoners to attend memorial services.
A police officer stood guard in the lobby of Madoff’s 12-story luxury loft apartment in SoHo Saturday morning. An official from the medical examiner’s office arrived in a van Saturday morning. The medical examiner will determine the cause of death.