Madoff with the Money

by Jerry Oppenheimer

  A woman investor noted in her letter about Bernie, “You are a murderer. You committed generational theft.”

  An 81-year-old woman from Pennsylvania declared, “He has condemned his investors to a life of hell, while his hell will be the prison you sentence him to.”

  Another stated, “At the age of 89, I find myself and my wife (86) devoid of future hope. I find it hard to believe what he did to us and . . . all the charities affected by this Bastard.”

  A mother of three who had lost her life savings wrote, “I often feel as if life is futile. Why bother to do ‘the right thing’ when it doesn’t mean anything?”

  A 52-year-old Florida victim wrote, “Due to his egregious deeds, Mr. Madoff deserves no better than to live under a bridge in a cardboard box, scavenging for his food and clothing, living the existence which he has undoubtedly relegated some unfortunate victims to. Instead, he will be allowed to serve his sentence in the relative comfort of prison, being guaranteed food, shelter, clothing, medical care, and treatment.”

  And a former Madoff employee, an 18-year veteran, wrote, “In December 2008, we lost our jobs, our health coverage, and most importantly, our trust in a company that we worked tirelessly to build.”

  A woman who noted that her elderly father had lost his life savings wrote, “I thought no day would be as bad as 9/11. . . . Bernie deserves a longevity pill—not death—so he can watch each generation suffer and watch what he did.”

  It’s one thing to lose one’s life savings; it’s another thing to lose one’s life.

  Bernie, the swindler, could also be thought of as Bernie, the murderer. As he spends the rest of his life behind bars, he does so with blood on his hands because two of his Ponzi victims, depressed about being fleeced, committed suicide.

  The first was the French aristocrat and co-founder of the money management firm of Access International Advisors, 65-year-old Rene-Thierry Magon de la Villehuchet, whose body was discovered at his desk in his 22nd-floor office in a Manhattan building. He had slashed both of his wrists and a bottle of pills was found nearby, but he had left no suicide note. What was known, however, was that he had placed $1.4 billion of his investors’ money into Madoff, and all of it was lost. And his entire life savings were wiped out.

  After his suicide three days before Christmas 2008, while Bernie relaxed in his plush penthouse under house arrest, de la Villehuchet’s Parisian brother, Bertrand, told reporters, “For him, it was a positive act of honor. He brought his friends and clients, and a lot of them were his friends, to a catastrophic situation.”

  More to the point, though, were the comments of de la Villehuchet’s widow, Claudine, who a week before Bernie’s sentencing broke her silence and declared in a TV interview, “He killed my husband. I think he’s a murderer.”

  The other suicide victim who had been fatally attracted to Bernie’s promises of financial wealth and security was 65-year-old William Foxton, a retired British army major, who shot himself to death on a Southampton, England, park bench in February 2009 after losing everything he had invested with Bernie. Foxton’s 28-year-old son, Willard, pledged to himself to find out who this guy Madoff was and how and why he did what he did to his father and others. “I wanted to take all the medals my father had won for gallantry and throw them into Bernie Madoff ’s face, to make Madoff know the sort of man he killed,” Foxton told the BBC. On his U.S. journey to probe Madoff he encountered other victims, such as a woman named Norma Hill, who after her husband had passed away decided to discuss his investments with Bernie.

  She met with him personally. She told the BBC:

  He appeared to be a really nice, kind man, sort of like anybody’s grandfather. He put his arm over my shoulder and he looked at me and he said, “Don’t worry, everything’s going to be fine.”

  She believed him and left her husband’s investment with him for two decades. She lost it all, and expected she’d have to sell her home.

  The former New York City police officer who served as Bernie’s bodyguard during his penthouse confinement and who accompanied him to court says that Bernie never for a moment showed any remorse for what he had done, or any compassion for any of his victims during the time he spent with him. His only concern, the ex-cop said, was that the SUV that transported him didn’t have blackout windows, allowing news photographers to take pictures of him. Bernie left that complaint on the bodyguard’s answering machine, the tape of which was played on 20/20.

  The emotional words and the immense losses of regular middle-class, everyday Americans who were hoping through Bernie, or through a Madoff feeder fund, to have a better life and a secure future made it difficult for many to have much sympathy for another breed of victim of his crimes—the big-name celebrities from the world of entertainment who claimed losses.

  As one close observer of the Hollywood and entertainment scene notes:

  There was great schadenfreude beside the pool at the Beverly Hills Hotel when it became known that the likes of Steven Spielberg, who has more money one can ever imagine, and Larry King and Kevin Bacon and others like them, who generate huge incomes and are treated like royalty, had lost money to Madoff. Hollywood and the entertainment world are all about greed and making more and more money. Bernie Madoff underscored the Hollywood vibe. They’ll all continue to do well. No need for tears for them.

  Most, if not all, of the celebrities taken to the cleaners by Bernie had invested through feeder funds and did not even know of Madoff until he was arrested.

  For some, like 51-year-old Bacon, best known for his role in the film Footloose a quarter century ago, the publicity his victimization generated in the media was possibly worth more than his loss, which was never disclosed. His story was carried around the world and constantly referred to in the media. A few weeks after Bernie’s arrest, the actor offered a few a boo-hoo words to a celebrity weekly: “We’ll march on. We have to. There’s nothing you can do about it,” he was quoted as saying. And he announced, “I don’t have anything lined up right now, but I need to work, for obvious reasons.” (He later claimed to the web site The Daily Beast that he was misquoted and taken “so out of context.... I’m hoping that story becomes old news as soon as possible. . . . I’m working on stuff, you know, developing stuff.” But the first interview in Life & Style got all the attention and garnered all the sympathy.)

  His interview appeared in mid-January. A month later, however, he had a presumably well-paid starring role in a well-received HBO film appropriately called Taking Chance. Moreover, his actress wife, Kyra Sedgwick, star of the popular TV series The Closer, earned a reported $300,000 an episode. In mid-June the high-earning Sedgwick, who had just been honored with a star on the Hollywood Walk of Fame, went public, acknowledging, “We did not lose everything. We lost hard-earned money that we worked very hard for that was [in] what we thought . . . [was] a safe place. It’s painful, but a lot of people lost a lot more.”

  Actress Jane Fonda, ex-wife of billionaire Ted Turner, was starring in a hit Broadway show in the weeks right after the Madoff scandal struck. Between acts during rehearsals, she jumped on her laptop to blog to her fans about everything from doing “pilates” with someone named Kimberly, to rehearsing for the second act and being “blown away by the set and the lighting,” to getting fleeced by Bernie.

  She wrote:

  I was thinking today on my way to the theater how grateful I am to be working, never mind doing something really exciting. So many aren’t. I ache when I read about the layoffs. I’ve lost a lot but it’s nothing compared to friends of mine who have lost everything they had because every penny they saved over their entire lifetimes was invested in one of Maddoff ’s [sic] schemes. I read a few days ago that Maddoff [sic] was complaining that he felt like a prisoner in his own penthouse! I want to shake him till his teeth fall out. No matter what happens once this play opens, I won’t be complaining. I feel blessed. I also feel tired. Enough.

  A commenter on the Fonda blog, which had a huge fan base,
responded, “The nerve of that Maddoff [sic]. Not that I’m rich or anything, but I just opened a pension plan and I freak out every time I hear about that guy in the news.”

  Lawrence Harvey Zeiger, better known as popular $7-million-a-year CNN interviewer Larry King, reportedly lost more than $1 million in the Ponzi scheme. King and Bernie had a few things in common. Both had been born in Brooklyn, and, like Bernie, Larry had faced criminal charges once upon a time himself. On December 20, 1971, he was charged with grand larceny involving $5,000, and had his mug shot taken at a police station, resulting in his suspension from a job he had at a local Miami radio station. “My lawyer thought we could beat the charges,” King wrote in his 2009 autobiography. In the end, though, the case was dismissed because the statute of limitations had run out.

  After Bernie was in the slammer, the eight-times-married King interviewed Donald Trump and asked, “How did he [Bernie] get away with it?” Answered The Donald, “Because people were stupid enough or foolish enough to just keep pouring money into his accounts. . . . They’ll probably change the name of Ponzi to Madoff. It was really the ultimate scheme.”

  After he was fleeced by Bernie, King privately consulted over corned beef sandwiches at his favorite Beverly Hills deli hangout, Nate’n Al, with another poster child of Wall Street greed, “Junk Bond King” Michael Milken, who went to prison for almost two years in the late 1980s for securities violations stemming from an insider trading investigation. The tabloid celebrity web site TMZ ran an exclusive photo of Larry sitting opposite Milken in the deli. The caption said, “Larry did a lot of listening during the meet as Michael spoke almost nonstop.”

  Spielberg’s and Jeffrey Katzenberg’s Wunderkind Foundation suffered some losses. Former baseball great Sandy Koufax, the Hall of Fame pitcher, was listed among the Madoff victims, as were the actor John Malkovich and the estate of John Denver. The Hollywood screenwriter and Madoff investor Eric Roth, who had won a Golden Globe for The Curious Case of Benjamin Button, told the Los Angeles Times, “I’m the biggest sucker who ever walked the face of the earth.”

  In her 90s and confined to a wheelchair after having suffered strokes, the famous-for-being-famous Hungarian-born Gabor sister, Zsa Zsa, and her ninth husband, 65-year-old Prince Frederic von Anhalt, lost practically all they had salted away for their old age through a feeder fund that placed celebrity money with Madoff.

  Von Anhalt says that he had been personally advised to meet with a representative of the fund by Zsa Zsa’s close friend Merv Griffin, the billionaire creator of Wheel of Fortune and Jeopardy. Griffin, a one-time popular TV talk show host who made a fortune in everything from hotels to casinos to real estate development, died at 82 in August 2007.

  “We lost about $10 million,” says von Anhalt, speaking from a cell phone in his Rolls-Royce outside the Beverly Hills mansion Zsa Zsa bought with the proceeds from her divorce years earlier from the hotel baron Conrad Hilton, the late great-grandfather of party girl Paris Hilton. “We invested in a California company and they in turn invested in Madoff. We didn’t know anything about Madoff—never met him, never heard of him. Nothing.”

  Von Anhalt says he was having lunch with Griffin at the trendy Café Roma in Beverly Hills and mentioned that he and Zsa Zsa wanted to invest some money and get a decent return.

  Merv was a very good friend of my wife, Zsa Zsa, and her sister, Eva. Everybody knew and trusted Merv. He was a great guy, very rich. He always invested very well, and he recommended me. I told him, “We want to invest some money. I want a good return. What can I do? You’re the master. You’re very rich. Give me some advice.” And he said, “I know a good company. I have somebody very good if you want a big return. I have somebody you can trust in.” I trusted Merv, and I invested in good faith.

  There was no problem for about five years, the length of time the money was locked in. Von Anhalt continues,

  We got great returns, about 8½ percent quarterly, better than a bank. We could live on the interest. We could pay our bills. It was wonderful. It was like life insurance. And we still had our $10 million. When the contract ended, I planned to renew for another five years, but I wanted to take $2 million out, and wanted to lock in the remaining $8 million.

  He made the request for the money but it was not forthcoming. When he questioned why, he says he was told, “We’re having a problem. It’s going to take a little longer.” All of a sudden everything was blocked. “I called my lawyer, and then I heard about Madoff and I was told that’s why I wasn’t getting the money. So I said, ‘I don’t give a shit about Madoff. I invested in you.’”

  Six weeks later Bernie was arrested, and the money was lost.

  Von Anhalt said he and Zsa Zsa might be forced to sell their house “if we don’t get money flow. I don’t know what’s going to happen. We’re in a big hole. We have big overhead. We may have to take things to a pawnbroker, but I don’t want to think about that.”

  He said the investment was a mix of Zsa Zsa’s money and his.

  I took all my money from German banks and put it into this fund. It was only earning 3½ percent in Germany, but I should have left it. But people get greedy and you think you can make more. And everything was wonderful. It worked out perfectly—until I wanted to take out some money. Now I’ve got nothing. When I told Zsa Zsa what happened to our money she nearly had a heart attack. I had to defend myself in front of my wife, which wasn’t easy because when this first happened the finger was pointed at me and I was accused of putting the money in another corner. But she trusted me.

  He said that if he had an opportunity to meet with Madoff he wouldn’t say anything to him.

  “I would take a baseball bat and hit him over the head.”

  John Robbins and Bernie Madoff were as different as chopped liver and tofu.

  While Bernie was considered a Wall Street guru before his Ponzi scheme caught up with him, Robbins became a guru of the vegetarian movement. He had everything growing up that Bernie didn’t have—enormous wealth and luxury, all of which he later turned his back on.

  His father was Irvine Robbins, the son of Polish and Russian immigrants, who took a $6,000 bar mitzvah gift and parlayed it into what became the Baskin-Robbins ice cream chain, with more than 1,600 stores throughout the United States, Canada, Japan, and Belgium. Along with his brother-in-law, Burton Baskin, the two entrepreneurs conceived such offbeat flavors as Pink Bubblegum and Daiquiri Ice. Their logo, a cherry and chocolate sign along with the “31 Flavors” concept—one flavor for each day of the month—became a pop culture icon and a symbol for a great American dessert treat. The two men became extremely wealthy.

  In John Robbins’ home growing up in Encino, California, the swimming pool was shaped like an ice cream cone, and inside the spectacular Robbins manse was, naturally, a soda fountain that offered guests all 31 flavors. Everything was ice cream-related, even the family yacht that was christened The 32nd Flavor. Each and every day, John’s father ate three or four scoops of ice cream. He lived to be 90, but had developed diabetes. He died in May 2008.

  But John Robbins long before had turned his back on the family fortune and how it was made. In his early 20s, when his father hoped he’d take over the Baskin-Robbins empire, he expressed his negative feelings about the effects on health of eating dairy products, and about the materialistic world he saw growing up. He detested ice cream and felt it caused illnesses such as diabetes. In 1967, an uncle died of a heart attack. He believed the uncle’s death and his father’s diabetic condition were caused by consuming too much of the family’s 31 flavors.

  He believed in natural foods and the vegetarian lifestyle. “I didn’t want to sell a product that hurts people’s health. I made a choice for integrity.”

  In 1987 he wrote a best seller called Diet for a New America, an expose that targeted the fast-food, junk-food industry. One of his later books, The Food Revolution, dealt with environmentalism and food consciousness.

  To some, he lived a Spartan, almost hippie-like
existence in Soquel, California, in the Santa Cruz Mountains, with his wife, Deo; son, Ocean; daughter-in-law, Michelle; and twin grandsons, River and Bodhi, who had disabilities. He sought a simple but honest lifestyle. Unlike his boyhood home, his own house, including three offices, operated on self-generated solar energy and encompassed eight rugged acres.

  Still, Robbins was entrepreneurial like his father. He was the leader of a movement and his books sold almost as well as ice cream cones, and he didn’t despise money. A guest appearance on Oprah gave him national recognition and enormous book sales.

  Robbins started investing in Madoff through a friend and attorney he trusted in Marin County, California, Richard Glantz. Like so many others, he received steady and favorable returns. While capitalism wasn’t part of his lifestyle, he didn’t feel he was violating any of his principles, and eventually put all of his book royalty earnings and speaking fees, which were substantial, into Madoff through the lawyer’s feeder fund. Robbins knew others who had similarly invested—many of them were enormously wealthy—so he felt his money was in good hands.

  When the 61-year-old vegetarian author’s name showed up on the list of Madoff victims—he lost his entire life savings of more than $1 million, 98 percent of his family’s net worth—the vegetarian movement took action and began a fund-raising drive for Robbins and his family. They were so financially devastated by Bernie’s Ponzi scheme that Robbins and his wife were forced to take in tenants, and she had to work part-time jobs.

  “I don’t see us as a charity case,” he told a local newspaper.“There are people who are in worse straits. I appreciate the love that is coming to us.”

  As for Bernie, Robbins declared, “This wasn’t a bad investment. This was a theft, a criminal action.”