Bernard Madoff 248 88 .
(photo credit: AP)
There are two things Elie Wiesel can't forgive: the Holocaust, and the $50 billion swindle allegedly perpetrated by Jewish financier Bernard Madoff.
"I would like him to be in a solitary cell with a screen, and on that screen, for at least five years of his life, every day and every night there should be pictures of his victims, one after the other after the other, always saying 'Look, look what you have done to this poor lady, look what you have done to this child, look what you have done,'" the Holocaust survivor and Nobel laureate told a New York audience last week.
"Whatever is to hurt him, I think should be invented, because he deserves it," he went on.
Forget aspirations to divinity. Every one of Madoff's victims is human, and, like the 80-year-old Wiesel, who lost $15 million from his charitable foundation along with his life savings, they are ready for payback.
About 2,400 people, including Wiesel, have so far filed claims in US federal bankruptcy court, and thousands of additional eligible victims are expected to file before the court's July 2 deadline.
Bankruptcy investigators have recovered only about $950 million in assets - including art Madoff kept at his Manhattan office - that can be put toward repaying victims for their lost investments.
Duped investors - a list that includes everyone from Jewish Hall of Fame baseball player Sandy Koufax to actors John Malkovich and Kevin Bacon - may also be eligible for up to $500,000 each from a US government insurance program.
Lawyers say that to be made whole, investors will have to look to the vast array of intermediaries who failed to spot red flags before Madoff's unprecedented pyramid scheme unraveled in December, prompting his arrest by federal authorities.
"These third parties were paid fees, significant fees, to manage these accounts and they did not do due diligence," said Sandra Stein, an attorney who helped win a record $7.2 billion award for investors bilked by failed energy trading company Enron from banks that underwrote the company's fraudulent activities.
The same principle applies in cases of "mini-Madoffs" like Texas billionaire R. Allen Stanford, whose $8 billion collapsed in a swirl of fraud allegations last week, leaving Latin American investors especially exposed.
In the Madoff case, third parties who may be liable include money management firms like those run by prominent Jewish investors and philanthropists J. Ezra Merkin and Stanley Chais, along with banks and accounting companies who signed off on flimsy records provided by Madoff's own firm.
As much as $6 billion in insurance may be available to settle claims, said Samuel Rudman, a partner at the San Diego-based law firm Coughlin, Stoia, Geller, Rudman and Robbins, which has convened a special "Madoff task force" that includes both Stein and her daughter, Laura, who also worked on the Enron cases.
"The middlemen, the money managers, these conduits - they have assets and they have insurance," Rudman told The Jerusalem Post.
Dozens of lawsuits have already been filed in US federal courts from New York to California, but only a fraction of those with claims are participating. Some may still be absorbing the financial shock of their losses, while others may be hesitating out of concerns that they will in turn be exposed to court efforts to "claw back" fraudulent profits they received from Madoff before the 70-year-old was arrested and put under house arrest in December.
The court-appointed bankruptcy trustee has not yet determined whether he will try to recoup money from individual investors. Those who had no idea what was going on could be at risk, a worry that has prevented some victims from filing claims with the court, said New York bankruptcy attorney Greg Blue, whose own law firm, Morgenstern, Fisher and Blue, keeps its office just a floor above Madoff's offices in midtown Manhattan.
"People are just worried about what's lurking out there," Blue told the Post, laughing that he hadn't gained any special insight from the federal investigators who now share his elevator rides.
Foreign investors, from European banks to Israeli insurers Harel and Phoenix Holdings - which have each said they lost about $15 million through investment funds hit by the Madoff meltdown - will have to be especially aggressive.
"International investors have the poorest lines of communication - they're the worst off, because they're outside the loop," said Laura Stein, who is working on providing a monitoring service for potential litigants.
Like most plaintiffs' attorneys, her firm operates on contingency fees, taking a percentage of whatever money is eventually awarded in court.
That process could take as long as 10 years, she warned - and some people may never recover a penny.
"But they shouldn't assume they're going to get a letter in the mail saying they're eligible for claims," Stein told the Post. "If you just sit tight in Jerusalem, you'll never get it back."