Alleged Ponzi scheme: 5 Utahns hit by Madoff fraud:They invested millions they have little chance of recovering.

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Alleged Ponzi scheme: 5 Utahns hit by Madoff fraud
They invested millions they have little chance of recovering.
By Paul Beebe

The Salt Lake Tribune

Posted: 02/10/2009 06:43:00 PM MST


Bernard Madoff's alleged $50 billion Ponzi scheme to defraud thousands of investors reaches into Utah, where five people may have lost millions of dollars they entrusted with the disgraced money manager.

The names of two Park City residents and three people with Salt Lake City addresses appear on a list of several thousand Madoff clients released last week by federal bankruptcy court in New York.

The Utahns are Brent Gindel, of Park City; Deborah Joyce Savin, of Park City; and Michael Wagreich, Beverly Wagreich and Samuel Wagreich, all of Salt Lake City.

Savin, who is married to Salt Lake City accountant Steven Scoggan, did not respond to phone calls seeking comment. Michael Wagreich declined to discuss the investments he and his wife made. Wagreich said Samuel Wagreich is deceased but would not describe their relationship.

Gindel, a retired land developer, said Tuesday he put money into Bernard L. Madoff Investment Securities on the advice of family members who knew the one-time Nasdaq chairman as a member of their New York country club and as one of the most trusted names on Wall Street.

"I met him. We shook hands. But I never had a sit-down with him," Gindel said.

"It was just that so many people were invested in him that I knew who were far more successful and far more business-savvy than I thought I was. I felt that I was in good company."

Director Steven Spielberg, publishing magnate Mort Zuckerman,

actor Kevin Bacon and New Jersey Sen. Frank Lautenberg are some of the high-profile investors Madoff allegedly bilked over several decades.

Other than to say "it would be a lot to most people," Gindel declined to detail how much money he turned over to Madoff in 2000 or 2001.

Nothing seemed amiss in the ensuing years. Madoff ensured Gindel's confidence by delivering steady profits through a recession, followed by six years of good economic times.

The gains turned out to be illusory. Madoff is charged with a single count of securities fraud. He allegedly operated a Ponzi scheme that paid early investors with money raised from succeeding clients, a plan that worked until the economy unraveled last year.

In December, when Madoff was arrested at his apartment on Manhattan's upper east side, the 70-year-old businessman allegedly told FBI agents, "There is no innocent explanation" for what may be the biggest fraud in history.

"It's all just one big lie," Madoff reportedly told his employees Dec. 10, the day before his arrest.

Madoff's arrest caught Gindel completely unprepared. "I was watching CNBC on December 11th when I saw him get taken away in handcuffs. I was pretty much shocked, I guess."

Gindel has not spoken to Madoff or his representatives since the arrest. He said he isn't wiped out because not all of his money was invested with Madoff. Still, he thinks he will have to return to work to make up the money he lost.

"You look to outsiders to manage your money and to protect you," Gindel said. "I just never thought the entire investment portfolio would be gone."

Madoff was released on $10 million bond guaranteed by his wife and secured by their apartment. On Monday, the government announced an agreement with Madoff that might force him to face a civil fine and repay investors.

The settlement does not affect criminal charges that could result in a 20-year prison sentence and a $5 million fine if Madoff is convicted. Gindel believes the government should make an example of Madoff, who he hopes will receive a stiff prison sentence.

But, angry as Gindel is at Madoff, he also is furious that government regulators did nothing to protect investors, even after being presented with potential evidence by ex-investment manager Harry Markopolos as early as 2000.

"I don't know if there is anybody you can trust. It's a pretty bizarre world that we are living in. It seems the only way people can protect themselves is to carry whatever money they have in their pockets or on a chain around their necks."

pbeebe@sltrib.com