Largest Ponzi Scheme In History? Investors Belted For As Much As $50B

In New York City, a story getting intense coverage in the financial world on Wall Street over the last couple of days involves the uncovering of what could be the biggest Ponzi scheme in history.

While the story has nothing to do with this blog, it deserves mention as a handy reminder that it isn't only the poor, unsophisticated and otherwise vulnerable that are susceptible to being ripped off by people they place their trust in, as indicated by these excerpts from coverage in the New York Post:

• Panicked investors scrambled desperately [...] to determine whether their life savings had been wiped out after a Wall Street legend allegedly admitted blowing as much as $50 billion in what is emerging as the largest Ponzi scheme in history.

• Among several big-name investors who trusted former Nasdaq Chairman Bernard L. Madoff with their cash were New York Mets owners Fred Wilpon and Saul Katz, who may have lost as much as $500 million in the scheme, sources said (see New York Times: Wilpon’s Losses in Fraud Case May Affect Mets).

• New Jersey Sen. Frank Lautenberg also confirmed he had invested money from his charitable organization through the 70-year-old Madoff's company, though he did not say how much. [...] "This is a major disaster for a lot of people," said investor Lawrence Velvel, 69, dean of the Massachusetts School of Law who said he and friends had lost millions among them.

***

• Sources say Jerome Fisher, the founder of the Nine West women's shoe empire, was said to have lost $150 million, and Carl Shapiro, who founded the Kay Windsor garment company, reportedly lost $400 million. [...] Many victims were reluctant to speak out of shame. "They don't want to read their names in the newspaper. They're too embarrassed already," said a source who knew many of the victims.

A story by Reuters news service reports that one Boston charitable foundation was forced to fire its entire staff and immediately shut down because it was heavily invested in the Ponzi scheme (see Madoff losses ripple into Boston, shut foundation).

For more, see:

• Investor Furor Over '$50B Scam' (Fear Worst After Wall St. Big's 'Lie),
• Fla. Elite Loses Its Juice ('We Just Became Whole Lot Poorer').