Bernard Madoff made it possible for Bernette Rudolph to quit her job as an art therapist 15 years ago and become a full-time artist. But these days, she's not feeling much gratitude.

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Bernard Madoff made it possible for Bernette Rudolph to quit her job as an art therapist 15 years ago and become a full-time artist. But these days, she's not feeling much gratitude.

"He should be strung up," she says without hesitation. "Yeah, I think that he should pay for pulling the wool over so many people's eyes."

When money manager Madoff was arrested in December for allegedly running what amounted to a $50 billion Ponzi scheme with his clients' money, many of those identified as investors were rich and famous, like CNN talk show host Larry King, Sen. Frank Lautenberg of New Jersey and New York Mets owner Fred Wilpon.

The Other Madoff Investors

But a list released last week by the trustee overseeing the liquidation of Madoff's funds makes clear that many of Madoff's other investors were hardly wealthy. For some, especially older investors, the loss of their money with Madoff has landed a blow they'll have trouble recovering from, wiping out their life savings.

"The sad part of it is that we're at a later stage of life, and we're not going to make up that income. This was savings that we put in every single time we had an opportunity, and now it's gone," says Judy Rafferty, of Danbury, Conn., whose entire family invested with Madoff.

Such investors are now trying to figure out what, if anything, is left of their savings; many are facing a future of cutting corners and reducing expectations.

An Artist's Nest Egg

When Rudolph, 80, learned her nest egg was wiped out in the scandal, she wondered whether she'd be able to keep her apartment in the Park Slope section of Brooklyn. A sunny, cluttered place filled with art and assorted mementos from her long career, the apartment doubles as Rudolph's studio. The rooms are lined with Rudolph's wall sculptures, including colorful, freewheeling depictions of Michelangelo's David and Venus covered with tattoos.

"My work is in my home. I get up in the middle of the night and go into my studio. I work early in the morning. I work all day long. My work and I are the same," she says, one recent morning, as she readies for an upcoming gallery show devoted to famous goddesses. In preparation for the show, she's dyed her short hair purple and wears purple earrings, lipstick and eye shadow.

Rudolph invested $50,000 in Madoff's firm 15 years ago, on the advice of a friend who knew Madoff's wife. According to the statements she received, the money grew over time to about $200,000. It provided her with a small income that allowed her to become an artist full time. From time to time, she took out money to travel or renovate her kitchen.

Although Rudolph makes some money from the sale of her work, she needs an independent income to survive, which Madoff provided, she explains.

Money Smarts

Rudolph confesses that she asked few questions and understood virtually nothing about how Madoff made money.

"I am not a money person. Money has never been a goal of my life," she says. "Ask me anything about art — how to make it, how to do it, how to promote it. I can answer any question. Ask me about how to be a widow, I can tell you. I've been widowed twice. But I don't know anything about money."

Rudolph once stumbled on an article about Madoff and how he made his money, she says. "And it said 'futures.' I said, 'OK, it's futures.' I don't know what futures is. I really don't know. And the thing that puzzles me today is that people who did know about money and investing fell into it also."

With the money her gone, Rudolph must survive on Social Security and a small pension. While she now figures she can keep her apartment, she no longer has money to pay for gallery space, ads and flyers to promote her work, or any of the other expenses that come with being an artist.

"The biggest loss was money to keep my art going, because that is my life's work, and without my art I have nothing," she says.

Losses In The Northeast

The woodsy, middle-class subdivision where Patricia Rafferty Brown lives in Danbury, Conn., is a long way from the Palm Beach country clubs and mansions where Bernie Madoff looked for investors. And Brown, who is Judy Rafferty's sister-in-law, herself is hardly rich.

"As you can see, this is how we live," she says, sitting at the kitchen table, next to a window overlooking her snowy backyard, where birds dart back and forth onto a feeder. "We weren't big spenders or anything. Maybe a few nice things, go out to dinner or travel or what, but nothing extravagant."

But just like those country club denizens, Brown's family became inextricably linked with Madoff.

A Connection From The 1960s

In the 1960s, Brown's father co-owned a factory that made Stetsons and Mallories, back when Danbury was a center of the headwear industry. The company hired an accountant from New York, who regularly traveled to Danbury and sometimes stayed with them.

That accountant's son-in-law was Bernard Madoff. The family never met Madoff himself, but over time they were persuaded to invest with his firm. After Brown's husband died in a plane crash, she invested the life insurance settlement with Madoff.

"All these years, we trusted these people and put our money with them, because we had no reason to believe it was any type of scheme or anything," she says.

Brown's brother-in-law, who served as her accountant, was suspicious of Madoff, she says.

"Every year, when I'd bring in my tax information, he'd be like, 'Who is this guy? How does he keep making money?' And I'm there, 'I don't know, here's the report,' and he's like, 'I don't know, you'd better watch out.' And I'd go, 'Oh, Joe, it's OK,'" Brown says, with a rueful laugh. "He hasn't said, 'I told you so,' but I know that's what he's thinking."

Saving By Cutting Corners

Today, Brown has nothing left but some stocks, which have also lost value, and she's having to cut corners in a way she didn't before. "Even grocery shopping. I used to just go in and buy what I'd like, and now I'm looking at all the prices and everything and just trying to cut back across the board."

Moreover, she can't turn to relatives for help, because many of them have been hit, too.

Brown's elderly mother, Virginia Rafferty, who had virtually all her savings tied up in Madoff's firm, has had to give up her car and house and move in with her. Brown's brother, Don Rafferty, has seen most of his savings wiped out. His wife, Judy Rafferty, has returned to full-time work as a legal assistant.

The Quest For Recovery

The family consulted with a lawyer to see if they could recover some of the money they lost, but he wanted too much to take their case. They're hoping to get some money from the Securities Investor Protection Corp., a nonprofit federal agency that helps investors who've been defrauded, but that's expected to take some time.

Meanwhile, the family has been closely following the news accounts of Madoff's fall and arrest and is eager to see him punished. They also feel let down by government regulators. When securities industry whistleblower Harry Markopolos told a congressional committee last week that he'd spent years trying to persuade the Securities and Exchange Commission that Madoff ran a house of cards, Don Rafferty watched the entire hearing.

"[The government] owes the people money, too, because they should have picked this up. This wasn't like it was last month," he says. "We're talking 1999. This is ridiculous that everybody got away with this for so long."

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Dec. 17, 2008