In the aftermath of the Bernie Madoff scandal, it wasn't just a few rich people whose lives were shattered. Madoff's Ponzi scheme, where he took money from one set of investors to pay back another set, pocketing a ton of dough along the way, reduced tens of thousands of retirees to ruin. It forced charities to close, made hospitals cut back on the care they could give, and wiped out people who'd never even heard of him.
Since Madoff was arrested in 2008, a number of people have died waiting for restitution. Others killed themselves, including a British war hero, as well as one of Madoff's sons. Many of the charities that were hardest hit never reopened, or did so giving much less money. And nobody will ever know how many patients died due to hospital care or bone marrow transplants they never received thanks to Madoff money disappearing.
Here are some of the worst things that happened because of the Madoff Ponzi scheme - and keep in mind that the total amount of money lost might never be known for sure.
The Main Donors to the Innocence Project Lost a Quarter of a Billion DollarsThe Innocence Project, devoted to exonerating prisoners who were wrongly convicted, was partly funded by the JEHT Foundation, a private charity backed by a wealthy couple, Ken and Jeanne Levy-Church, who had invested enormously with Madoff. Jeanne Levy-Church's losses forced her to shut down her foundation, meaning the Innocence Project had to temporarily scale back its expansion plans.
Cancer Research Took a Major HitApparel magnate Carl Shapiro lost over $500 million from Madoff investments, including a $100 million hit to his philanthropic family foundation. Shapiro had made major donations to a number of research hospitals, which had to be curtailed in the wake of Madoff's arrest. Madoff himself was a renowned philanthropist, giving a large amount to lymphoma research after the diagnosis of his son, Andrew. A number of research grants awarded by foundations invested in Madoff were rescinded as well.
Bone Marrow Transplants Were DelayedA number of medical institutions and hospitals were adversely affected by Madoff, either directly losing money or having major donors take heavy losses. Among these was the
Gift of Life Bone Marrow Foundation, which suffered both because many of its donors had invested with Madoff and because Madoff himself was a major donor.
"We've seen financial supporters who were personally invested in him no longer having the capacity to give charitable donations because of what happened," the foundation's founder and executive director said at the time. All told, they lost over a third of their operating budget. Madoff's donations alone led to the registration of 50,000 donors and 200 transplants.
The 71st Largest Foundation in the US Lost One Billion Dollars and Folded
The Florida based Jeffry M. and Barbara Picower Foundation was one of the biggest medical research grantmakers in the United States. The Picowers had invested heavily with Madoff and were making returns as high as 900%. When Madoff was arrested, Jeffry Picower was revealed to be one of the largest gainers in the Madoff Ponzi scheme, and wound up having to return over $7 billion that he'd made illegally - money that would be used to pay back other victims.In the process, the Picower Foundation was wiped out, taking tens of millions in grants to brain research and education with it.