Dec. 13, 2008— -- The victims of Bernard Madoff's massive alleged Ponzi scheme are becoming clear and not all of them are deep pockets investors.
One of the losers in the alleged ripoff was a Massachusetts charity that financed childrens' trips to Israel.
The Lappin Charity has closed its doors after seeing its entire $7 million endowmen wiped out.
Yeshiva University is trying to figure out how much of its endowment evaporated in the $50 billion that authorities say was lost in Madoff's investment fraud. Madoff, 70, was also the university's treasurer.
Joyce Greenburg and her late husband began investing with Madoff in the 1970s. Now, she has no idea how much of her money is gone.
"This is a nightmare," sid Greenburg of Houston, Texas. "I'm just grateful I didn't have all my eggs in one basket."
Like so many, she never questioned the man who began his firm in 1960 with just $5,000 that he earned as a life guard.
It wasn't just the trusting who were taken in. Among the victims were some of the country's most savvy businessmen.
Fred Wilpon, owner of the New York Mets baseball team, is chairman of the board and co-founder of Sterling Equities, a firm that invested with Madoff.
Madoff's investment magic produced double digit returns even when the economy turned sour, and he attracted investments from hedge funds and international bankers.
The Ponzi scheme, however, was using money invested by newcomers to the fund to pay supposed dividends to earlier investors, a pattern that eventually thousands with huge losses, and many peoples' savings heartbreakingly gone.
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But there were red flags.
The SEC had been asked about Madoff.
Barron's newspaper raised questions in 2001.
And many firms warned investors to stay away from Madoff.
(SOT / Jim Vos/CEO, Head of Research, Aksia at 1:09:36)
Muir: what did you tell them?
You ought to stay a mile away from this thing - there's no smoking gun - we have no proof - but there's enough red flags // a responsible investor should not go anywhere near this.
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