December 15, 2008
Expanding Web Of Madoff Impact
Investors, Philanthropists And Non-Profits Are Now Evaluating How Much Is Gone
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(AP/New York Times)
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Play CBS Video Video $50B Scam Victims Speak Victims who lost their life savings are speaking out as investigations continue into Bernard Madoff's $50 billion investment scam that went on unnoticed for decades.
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Video $50 Billion Wall Street Scam Wall Street investor Bernie Madoff was well respected within the world of finance. But, as Michelle Miller reports, the F.B.I. now suspects that Madoff scammed clients out of billions of dollars.
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Video Wealthy Investors Swindled Bernard Madoff, a former head of NASDAQ, was taken into custody after reportedly admitting to losing about $50 billion in investors' funds in a "Ponzi" scheme, reports Armen Keteyian.
One of film director Steven Spielberg’s philanthropies The Wunderkinder Foundation reported $339,255 in dividends and interest from Bernard Madoff Investment Securities LLC in 2006, reflecting a large investment in Madoff’s Ponzi scheme that is now in jeopardy. The funds are reported on the foundation’s 990 form.
The Wall Street Journal reported that Spielberg had invested up to 70 percent of his foundation’s money with the scam artist.
A Dreamworks spokesperson for the blockbuster director confirmed that the foundation had funds invested with Madoff as of this week. Spielberg’s philanthropy funds non-profits such as the Children’s Hospital of Los Angeles, Doctors Without Borders and the Young Musicians Foundation.
An expanding web of investors, philanthropists and non-profits are in the process of evaluating how much of their investments are gone in the wake of Madoff’s massive scam.
The sudden ripple effect is hitting non-profits at a time of already depressed contributions in light of the economic recession. Andrew Gilbert from the Jewish education non-profit Limmud International wrote in an email obtained by CBS News to supporters that in the wake of the scandal, his organization now found itself in need of extra help, “The idea one of our key funders could be erased by Madoff has shocked us and many others too.” Limmud International was funded by the Israeli based Chais Family Foundation which shut its doors after its funds invested with Madoff disappeared.
Montieth Illingworth of the Tremont Capital Management in Rye, New York said in a statement that the firm was, “victimized by not just a person but also a scheme and a complex process designed to deceive individuals and organizations, managers and analysts - including some of the largest, sophisticated financial institutions in the world.”
Some investors believe that there could be an overseas Swiss bank account holding Madoff investor funds but just how funds of that kind could be recovered remains unclear.
Madoff’s accounts were reportedly audited by an accounting firm, Friehling & Horowitz in Rockland County, New York. One of the firm’s accountants, David Friehling, held office recently as the President of the Rockland County Chapter of the New York State Society of Certified Public Accountants according to the statewide association.
By Laura Strickler
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