Happy anniversary, Bernie Madoff. Five years ago this month, he was arrested
Happy anniversary, Bernie Madoff. Five years ago this month, he was arrested
If you want to feel like a real jerk try calling up nice little Jewish old ladies and men, and asking them to tell you about losing all their money to Bernie Madoff. Almost no one wants to talk about having their life savings sucked away by a con artist. But even though Joyce Greenberg, a Houston-based retiree, can’t research potential interviewers on Google — she doesn’t use a computer — she wasn’t too wary to talk to a reporter. Her experience with Bernie Madoff hasn’t cost her all her trust in people.
“Not completely, just when it comes to managing money,” she says.
Years ago Greenberg says her father had opened college funds for her two daughters and they’d done well. So when she needed someone to manage her own investments, she called the manager her dad had used. His name was Bernie Madoff.
Greenberg, a former stockbroker, knows how the complicated world of finance is supposed to work, but like many others, she still got taken in. One of the reasons, she says, is all the paperwork.
“I got more paper on my Madoff investments than you can imagine. There were buy confirms, there were sell confirms. there were quarterly reports and there were 1099’s. And they all balanced.”
She still has some of the files.
“This is a Bernard L. Madoff investment securities confirmation. It says. ‘A member of FINRA, NSXISIPC.’ These are all fiction, but there’s no way of knowing. It looks absolutely, like a genuine confirmation.”
Greenberg says one of her daughters lost her nest egg, and because she’s a teacher who doesn’t earn a big salary, she had to get a second job. Greenberg herself lost a substantial amount, which she thought she’d never see again. But Greenberg is part of a small group who qualified for restitution — she says she got back a little over ten percent. And because she thought the money was gone anyway, she decided to give it to her alma mater: two million dollars to the University of Chicago.
All in all, given what she went through, Greenberg seems relatively unscathed and is even willing to examine possible silver linings.
“It teaches me not let anybody else invest my money.”
Greenberg says her investments, under her own management, are doing better than Madoff’s fictional ones ever did. But most of his victims have not been as lucky. The only others I contacted who would talk were a mother and son, Michael and Emma De Vita.
“It changes the way you live. It changes the way you think. You think twice before you spend a dollar and say, do I really need this and can I find it cheaper on the internet,” she says.
Emma De Vita is in her eighties and Michael is in his sixties. They live in Bucks County, Pennsylvania. Michael De Vita heard about Madoff from a guy on his softball team. When his dad passed away back in 2008, the plan was for his mom to withdraw her Madoff money to live on. A few days before Madoff was arrested the De Vitas were at the bank, “And on, you’ll love this, Dec. 8 of 2008,” he says, “we were sitting in our local bank signing the paperwork to close the accounts and move it into super secure CDs. Three days before he was arrested.”
You would think the family got their money out just in time. But because it was part of a fraud the money was gone. And unlike Joyce Greenberg he hasn’t gotten back a penny in restitution. Michael De Vita was supposed to retire five years ago, and “Well, I never retired so I’m just going to stay working,” he says.
De Vita says now he’s on a crusade to prevent others from experiencing the same kind of loss. He teaches a class on the whole Madoff debacle at a local college, and he’s written a book, “65 billion reasons why you cannot trust Wall Street”.
But the De Vitas say they’re not just angry with Madoff. They also feel betrayed by the government. When you earn interest on an investment you pay taxes on that interest. Michael De Vita says the interest he earned from his investment with Madoff never really existed – and so he wants his tax dollars back.
His mom agrees.
“It’s to no avail,” says Emma De Vita. “The government will not pass a law to refund the income tax that we paid on that money. And they are the biggest winners, and it’s just not fair.”
When asked about the De Vita’s complaint an IRS spokesperson says the IRS can’t discuss specific taxpayers or cases. Reed Schuldiner, Co-director of the Center for Tax Law and Policy at the University of Pennsylvania Law School, says that while the IRS has acted very reasonably by letting Madoff victims treat their losses more favorably than normally would be the case for losses on personal investments, because of the rules Congress dictates for the IRS, many older investors with Madoff are out of luck when it comes to trying to get back the tax they paid on their non-existent earnings.
Michael De Vita served in the Navy and said many of his family members have also enlisted. He says he and his mom feel as if their patriotism hasn’t been repaid.
“I had a hard time getting over that,” says Emma De Vita, “And now I’ve accepted it and you don’t think back on what was, you look at what is. And that’s the way you live.”
Emma De Vita wants people to know that other Madoff victims are worse off. She still gets to do things like go out to dinner, if her son or daughter take her. And she says she has the things that are necessary to live — like friends and family.
A longer version of this story was produced for Tablet Magazine, as part of a special feature on the aftermath of the Madoff scandal. You can find it here.
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