Alleged scam's victims list includes famous names
— -- The list of investors allegedly victimized by Wall Street money manager Bernard Madoff in what may be the world's largest Ponzi scheme expanded rapidly Monday, adding both individual investors and some of the world's largest financial institutions.
The growing roster now features a virtual Who's Who, including the charitable foundations of Nobel Laureate Elie Wiesel, movie director Steven Spielberg, Sen. Frank Lautenberg of New Jersey and New York publisher Mortimer Zuckerman.
The latest potential losses in what Madoff last week told the FBI was a $50 billion scam ranged from an estimated $1 billion exposure for Britain's HSBC Holdings, to $6 million gone for Irwin Kellner, a New York economist and plaintiff in the first proposed class-action lawsuit in the case.
"The scope is stunning in the breadth of categories of individuals and institutions that have been caught up," said Mark Mulholland, a lawyer for Kellner. "From gray-haired widows who lost a few hundred thousand dollars, to pension funds, college endowments and financial institutions that lost $90 million, $100 million or far more."
The charitable foundation for Lautenberg, a Democratic Senate veteran who received $2,600 from Madoff for his recent re-election bid, reported at least $241,334 in income from the investment on its 2006 tax filing. That signals millions at risk.
Senate staff counsel Scott Mulhauser confirmed Lautenberg and the foundation were among Madoff's investors, but declined to provide financial figures.
Similarly, the 2006 tax filing of the Elie Wiesel Foundation for Humanity listed $310,519 in profit from a Madoff account. Spielberg's Wunderkinder Foundation reported $339,255 in Madoff-related dividends and interest. The amounts indicate more than $1 million in investments.
Wiesel's foundation did not return a message seeking comment, and the accounting firm for Spielberg's foundation said it would not discuss the matter.
Zuckerman, publisher of U.S. News & World Report and the New York Daily News, said on CNBC TV that a money manager had invested $30 million, or 10% of the publisher's charitable trust, with Madoff.
For several Jewish philanthropies with investments linked to the accused con man — who until last week was virtually revered in Jewish community circles in New York, Florida and elsewhere — the financial fallout was crippling.
The Massachusetts-based Robert I. Lappin Charitable Foundation, which sends teachers and students to Israel, says it lost all of its $8 million investment.
"It is with a heavy heart that I make this announcement," said Robert Lappin, the foundation's trustee, as he announced layoffs of the entire staff.
The Gift of Life Foundation, a Jewish bone marrow registry, issued an SOS to donors saying it needed $1.8 million to cover Madoff-related losses. Director Jay Feinberg says the foundation hadn't invested with Madoff, but had received donations from a Madoff family foundation.
The alleged fraud forced the Chais Family Foundation, which donated about $12.5 million annually to Jewish causes, to shut down Monday. Its funds, all invested with Madoff, were "obliterated," Avraham Infeld, the group's president, told Reuters.
The Los Angeles-based Jewish Community Foundation said its $205 million common investment pool lost $18 million invested with Madoff, but indicated the loss wouldn't threaten the organization's stability and mission.
Rob Eshman, editor of the Jewish Journal in Los Angeles, said the long-term impact on the Jewish community "will be devastating. It breaks the bonds of trust and sense of community."
Large financial institutions weren't immune. Britain's Royal Bank of Scotland reported an estimated $612 million exposure to potential Madoff-related losses on Monday. Japan's Nomura Holdings and France's Natixis said they suffered losses.
Although the list of firms facing potential Madoff losses includes Sterling Equities, the real estate investment firm of New York Mets owner Fred Wilpon, the Mets said the fallout doesn't affect the ballclub's operations.
But some smaller investors weren't as fortunate.
Kellner, a senior economics scholar at Dowling College on Long Island, faces "a very serious impact on his retirement plans," said Mulholland, his attorney.
How much, if anything, victims might recover remains an open question. Investigators from the FBI, Securities and Exchange Commission and other agencies are sifting through records of Madoff's investment business.
Brad Friedman, an attorney at Milberg LLP, a New York law firm representing dozens of clients facing millions of dollars in Madoff-related losses, said money managers who steered clients to Madoff without first conducting due diligence checks "could have liability" themselves.
Contributing: Jeffrey Stinson and Peter Barzilai