Madoff Scam Could Cost Cancer Patient His Life

March 6, 2009— -- David Arenson was not one of Bernard Madoff's wealthier clients. Arenson, like many investors who got in early with Madoff, only had about $65,000 invested, a far cry from the tens of millions his elite clients had. But that $65,000 was supposed to go to a donor search for Arenson to find a bone marrow transplant. Arenson has chronic lymphocytic leukemia and his doctors say there is no cure without a transplant.

"If I expect to live to be as old as Bernie Madoff is, I'm going to need a bone marrow transplant," Arenson told ABC News. "And that money that I had in Madoff, that my family had in Madoff, would've gone a long way to making that doable."

In 2003, 52 year-old Arenson was diagnosed with CLL, the same disease that 60 Minutes' Ed Bradley died of, and was given a prognosis that he would live for another 8 to 15 years. Six years later, he says his illness has left him feeling like a 90 year old man some days.

Arenson said he got a phone call late last year from a relative informing him that Madoff had been arrested, had admitted to running a scam, and that the Arenson family had lost everything.

"It was about the last thing I expected to hear," he said. "I was completely in shock."

Arenson has written about Madoff on his blog, which also details his treatment process.

Arenson had no reason not to trust Madoff with his money. After all, he and his relatives were recruited by the parents of Bernard's wife Ruth at a popular resort hotel in the Catskills they frequented.

"There was a family connection there, and a friendliness there," he said.

Ruth Madoff claims that she played no role in her husband's alleged $50 billion Ponzi scheme, but even at her 50th high school reunion last November she wrote in the class book that "Bernie and I worked together in the investment business that he founded in 1960."

Ruth is now trying to convince a judge that she should be able to keep the couple's $7 million penthouse on Manhattan's Upper East Side along with $62 million she says is her own money, not in any way related to her husband's alleged fraud.

Watch EXCLUSIVE video of Madoff under house arrest in his luxurious penthouse.

Far from the glamorous runways of fashion shows and the high-fashion covers of magazines, longtime model Carmen Dell'Orefice, 77, told Good Morning America today that all of her life savings were lost in the Madoff scandal. And, even more devastating, Madoff and his wife Ruth were her treasured friends, with whom she traveled and trusted.

"Why? Why?" Dell'Orefice, who was one of the original supermodels and graced the cover of Vogue magazine at the age of 15, said she would ask Madoff if she could. "I thought you were so smart, how could you do it to yourself?" She said the first word that comes to her mind when thinking of Madoff is "sick."

Watch Dell'Orefice on Good Morning America.

Dell'Orefice is the subject of an upcoming Vanity Fair article written by Mark Seal, who traveled across the country speaking with about 40 different Madoff investors.

"I felt like the angel of death walking from one door to the next," Seal said. "Behind each door was a state of devastation."

Even though Dell'Orefice and the Madoffs were longtime friends of some 15 years, she says she is still most angry with herself. She gave Madoff credit, she said, "for being smarter than to be caught in the vice of the world that was tanking."

Now, as the still-working model tries to understand the Madoff that she knew with the Madoff that has emerged, Dell'Orefice said she must forge on, living on social security, a pension from the Screen Actors Guild, and the income she still makes from modeling, even though the fraud scandal has been like a "bad dream."

"My savings are gone," she said. "I'm not gone."

There could be a little good news next week for some of the victims who lost money with Madoff. Ten investors will receive the first of the $500,000 payments from the Securities Investment Protection Corporation, which protects investors in the event of a brokerage firm failure.

"These were the first ten people who submitted what I would call easy claims, in other words, these are people who deposited money into the Madoff scam but never withdrew anything," said Stephen Harbeck, President of SIPC.

Over 2,350 claims from angry investors have been filed and that number could soon double. So far the claims add up to around $1 billion. The deadline to submit a claim is July 2, 2009.

On Friday, the Associated Press reported that SIPC sent out the first checks to two investors.

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