A financial chill swept through the Sunshine State yesterday as it emerged that many potential victims of the biggest Ponzi scheme in history live in South Florida.
“It was a very somber day here. Everybody was in shock. There were a lot of clients here,” said an employee of the Palm Beach Country Club, where many of financial guru Bernard Madoff’s investors were members.
As the scope of the scam that may have lost $50 billion comes to light, many Floridians said they had little hope of recovering their life savings.
MORE: Investor Furor Over ‘$50B Scam’
“I expect to get back zero,” said former newspaper writer Susan Leavitt of Tampa. “When he tells the feds he has $200 million to $300 million left out of billions, what can you expect.”
And one hedge-fund manager, Douglas Kass, estimates that “at least $15 billion of wealth, much of which was concentrated in southern Florida and New York City, has gone to ‘money heaven.’ ”
Madoff’s sons turned him in to authorities after he allegedly admitted his hedge fund was “all just a big lie” and “basically a giant Ponzi scheme.”
His biggest investors appear to have been hedge funds and other institutional investors. But many more were individuals who had invested their family fortunes with a man they regarded as a financial genius.
“Palm Beach became a lot poorer in the last 48 hours,” said a member at the Trump International Golf Club, where Madoff played regularly and where his brother Peter is a member. “Many, many people got wiped out.”
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.
They did not return calls for comment.
Madoff primarily worked the so-called “Jewish circuit” in both New York and Florida, where he used his position with prominent organizations to win confidence.
Places like Palm Beach Country Club and the Boca Pointe Golf Club in Boca Raton were filled with deep-pocketed targets.
The club counts high-profile members – including New England Patriots owner Robert Kraft and New York real-estate magnate and Miami Dolphins co-owner Steven Ross. There is no evidence either was victimized.
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.
“Every big guy was his client,” a club member told The Palm Beach Post.
“There are a lot of people who lost a whole lot of money with this guy. But no one will admit to it in public.”
Leavitt said many were drawn to Madoff because of his reputation for exclusivity.
“He had a closed fund, which is why people put more money into it, instead of diversifying,” she said. “You couldn’t just come in off the street and plunk down $100,000.”
She said that in addition to her personal funds, she allowed Madoff to manage money for a family philanthropy.
“That is gone,” she said. “We were very philanthropic. Those days are over.” With Post Wire Services