Aspenites asking how they fell in Madoff scandal
Aspenites asking how they fell in Madoff scandal
DENVER
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DENVER (Map, News) - Some Aspen investors who say they lost big in the Bernard Madoff scandal are pondering their future and asking how they could have been burned.
"I've been burned before, and I thought I had learned my lesson," said real estate developer Guy Alciatore, 66. "Now, I've been burned again."
Alciatore said he began investing with Madoff after they met 18 years ago. He put his real estate profits into his Madoff account and withdrew cash when he bought a property.
"It was like a savings account, except it paid 10 percent a year," he told the Rocky Mountain News.
Alciatore said he and his wife were vacationing in Dubai when a friend and fellow Madoff client called to tell him that Madoff had been accused of duping investors out of as much as $50 billion in what may be the largest Ponzi scheme ever.
"I was dumbfounded," he said. "Your mind can't accept it. It's like being hit by lightning."
Alciatore said he's selling real estate to raise cash.
Home builder Marc Mandelbaum, 43, said that he, his sister, his parents and his former wife's family had all invested with Madoff.
Mandelbaum said he and others couldn't figure out Madoff's strategy but didn't ask too many questions.
Madoff appeared to "have a magic system" for producing steady gains in up and down markets, Mandelbaum said.
Aspen investment adviser Wally Obermeyer said many of Madoff's investors didn't want to ask too many questions because they felt they had been allowed into a select group.
"A basic flaw in our makeup" is to fall for something that seems exclusive, Obermeyer said.
"Most of these people are pretty astute," he said. "They wouldn't buy a Colorado ranch without having their attorney review it. They would ask whether it comes with water rights, but they would throw their life savings into Madoff without due diligence."
The FBI arrested Madoff in December after investigators said he confessed to his sons. The 70-year-old former Nasdaq chairman remains confined to his Manhattan apartment under house arrest.
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Information from: Rocky Mountain News, http://www.rockymountainnews.com/
Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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