Fairfield County 'ground zero' for Madoff scandal, victim list shows

/Home/Madoff Fraud Victims- Swindler's List/Individuals- Madoff Fraud Victims

Fairfield County 'ground zero' for Madoff scandal, victim list shows
Ponzi scheme's victim list shows Fairfield County to be at the epicenter of $50 billion in financial losses
Staff and wire reports
Posted: 02/06/2009 06:03:18 PM EST

What does $50 billion worth of lost money, dashed dreams and broken promises look like when all that misery is divvied up and apportioned investor by investor?

In the bankruptcy case of Bernard Madoff's defunct investment firm, accused of perpetrating a $50 billion Ponzi scheme, the answer to that question came this week when an exhibit in the case -- 162 pages long and with 13,000 entries -- listed each and every victim, from celebrities and Wall Street moguls to the ordinary people until now mostly overlooked.

They include Danbury resident Patricia Rafferty Brown, 61, who said Friday she faces having to abandon retirement and return to work because of money she lost in Madoff's scam.

She declined to specify how much, but said she drew on the interest from her Madoff investments to put her two children through college.

Her mother, brother and sister-in-law also entrusted their money to Madoff. Her mother was forced to give up her house and car and move in with Brown. Her sister-in-law had to go back to work full-time. Her brother, who is retired, has a new part-time job.

"My father, George Rafferty, invested his life savings with Madoff," Brown said. "My dad was one of the former owners and managers of the Danbury Hat Factory. Madoff's father-in-law, Mr. (Saul) Alpern's, firm did the books for the factory."

Accountants from the New York City firm would come to Danbury over the years and work on the hat factory's books, then go
to the Rafferty house to have dinner with the family, she said.
"We considered them all friends," Brown said. "We never met Bernie, but when Mr. Alpern told my father that Bernie had this investment, my father put his life savings into it. We never suspected anything."

As Brown has filed a claim with the investment firm to try to recoup some of the hundreds of thousands of dollars her family lost.

"They showed the rich and famous on TV who lost fortunes to Madoff's scheme,"

Brown said. "But there were so many people just like me and my family who are retired now and lost our savings.
"It's especially hard when you are at the age when you can't earn it back -- you just don't have those years," she went on. "It cost hard-working people our lives."

The list includes more than 300 names with Connecticut connections -- including actor John Malkovich and singer John Denver's estate -- but is also a catalog of devastation that reaches from shore to shore in America and across the sea to Italy, France and England.

Bernard Madoff, once a lion of Wall Street who served on blue-ribbon panels about investment strategies, allegedly ran a scam for years in which he used new fees from a variety of investors to pay dividends to other investors.

The list was compiled to help decide who might be eligible for money when the assets of Madoff's firm are liquidated.

'Ground zero'

In an earlier interview, Paul Schatz, president of Woodbridge investment adviser firm Heritage Capital, said Fairfield County is ground zero in the Madoff scandal, and the list released late Wednesday proves that.

Schatz did not invest in Madoff so is not on the list, but he said at least 12 of his friends who thought they were getting into something good are now probably broke.

Besides Malkovich, who was connected to a Westport business at 25 Sylvan Road, John Denver Concerts Inc. and a pension fund related to the late singer, Dodgers great Sandy Koufax, and actor Kevin Bacon are on the list.

While the losses are huge for these stars, Madoff's scheme has also put in jeopardy years of hard work by people whose pensions were invested with him, including Orthopaedic Specialty Group of Fairfield.

OSG stands to lose $11.6 million that 125 employees and 15 doctors turned over to Madoff. Darien-based MAXAM Capital Management, which steered some of the town of Fairfield's pension fund to Madoff, was also on the list. The fund appears to have lost about $42 million, but it still has $235 million.

family feud

It looks like Bernard Madoff lost his family's money, as well. A number of Madoffs with Connecticut residences are also on the list.

But not all the names should be on the list, according to Eric Moeller, a business operations manager for Resnick Investment Advisors of Westport.

"We are not now, or ever been, directly invested in any funds of Bernard Madoff," Moeller said, when asked about his firm being listed twice.

He said the agent collecting data on Madoff customers grabbed every address in his files and posted them. Resnick was in the files because the firm has clients who were also doing business with Madoff independently, Moeller said.

Resnick commonly asks its clients about their other investments and then asks those firms, in this case Madoff's, for reports. That's why the Resnick name came up in the investigation.

He said for similar reasons there are probably lawyers and accountants on the list who really don't belong there. Among the 312 Connecticut addresses listed, there were in fact several public accountants and attorneys.

The Madoff mess continues to suck innocent people and firms into it and leave a trail of distrust, since investment advisers with good reputations now must fight to keep their reputations and people who thought they were going to retire in a year or two might have to keep working.

Staff writers Rob Varnon and Susan Tuz contributed to this story, as did The Associated Press.

Our Madoff victims The following are area victims of Bernard Madoff's $50 billion Ponzi scheme, according to records from a filing in the bankruptcy case of his investment firm. Brookfield Richard Ricard Danbury David Hedges Jerry Simon Margaret Grosiak Patricia Brown George Rafferty Kent Tracy Fillow New Fairfield Carolyn Dohan Newtown Edwin Grant Redding Carl Fisher Joan Fisher Carl Weinburg Sherman Don Glantz Melvin Gordon Linda Berger Washington Carol Nelson Paul Sakren