Fortune of billionaire heiress Liliane Bettencourt may have been exposed to Wall Street fraudster Bernard Madoff. - Liliane Bettencourt entrusted funds to Madoff

L'Oreal Family Mixed In With Madoff
Javier Espinoza, 12.24.08, 10:40 AM EST
Fortune of billionaire heiress Liliane Bettencourt may have been exposed to Wall Street fraudster Bernard Madoff.

Liliane Bettencourt, the billionaire heiress to the L'Oreal cosmetics empire, may have become the latest victim of Bernard Madoff's Ponzi scheme. Bettencourt entrusted part of her $22.9 billion fortune to the alleged Wall Street fraudster through a fund managed by New York-based Access International Advisors, press reports said on Wednesday. It is the second time this month Bettencourt has hit the headlines for financial reasons, having earlier provoked ire from her daughter for offering part of her fortune to a photographer friend.

According to French market regulator Autorite des Marches Financier, a total 500.0 million euros ($699.5 million) from approximately 100 French funds were exposed to Madoff's fraud, out of which 40.0 million euros ($55.9 million) came from private individuals.

Two weeks ago, L'Oreal's controlling shareholder reportedly funded life insurance policies worth around 1.0 billion euros ($1.4 billion) to benefit photographer, painter and writer François-Marie Banier, whom she had befriended. (See "L'Oreal Heiress Is Generous To A Fault.") Bettencourt, 85, has been ranked by Forbes as the 17th richest person in the world, with a estimated net worth of $22.9 billion; most of her fortune is inherited from her father and L'Oreal founder, Eugene Schueller.

Bettencourt may now have joined a list of wealthy individuals, including U.S. filmmaker Steven Spielberg and Nobel laureate Elie Wiesel, as a victim of Madoff's alleged $50.0 billion Ponzi scheme. On Tuesday, the body of Thierry Magon de La Villehuchet, a fund manager who put $1.4 billion into Madoff's fund, was found after reportedly committing suicide at his office. (See "Madoff Investor Reportedly Kills Self.") De La Villehuchet was also a co-founder of Access International Advisors and Bettencourt was one of his clients, Le Monde reported last week. The Bettencourt Foundation, a charity founded by the billionaire in the memory of her father, refused to comment.

nalysts said any exposure that Bettencourt had to Madoff's fraud was unlikely to affect L'Oreal business. "She already spent a fortune on the photographer and lost money to Madoff, but in the end it's her private money and I don't think L'Oreal will be involved," said Vincent Hamel, an analyst with Oppenheim Research in Paris. "What could impact market sentiment is the ongoing tension between Bettencourt and her daughter."

Following the scandal over Bettencourt's donations to her photographer friend, her daughter Francoise, who also sits on the board of L'Oreal along with her husband, brought legal action against her mother, claiming Bettencourt's age made her "vulnerable to abuse."

Shares of L'Oreal (other-otc: LRLCY - news - people ) were flat at 61.36 euros ($85.88) in afternoon trading in Paris on Wednesday.

The Associated Press contributed to this article.