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The Madoff Exiles


But the Madoff victims have their own unique problems. Many feel the public is unsympathetic to them. “They thought we were all greedy and rich, which is so far from the truth,” says Cyndee Friedman. “It’s very hard being lumped in with the Kevin Bacons and Steven Spielbergs, whom it’s nothing for. They move on.”

In March, after a snowstorm on Long Island, Richard Friedman decided to save his mother $100 by shoveling her driveway. He threw out his back and wound up in New York-Presbyterian Hospital. In the ER, Richard lay on a gurney in an area roped off by a curtain. On the other side were two women. They were talking about Madoff—how the investors must have known, how greedy they must have been, how anybody could have figured it out. Cyndee thought about lashing out at them. “But Richard was sitting there in pain,” she says, shaking her head. “They thought they knew everything. They thought they were experts.”

There are moments, naturally, when some victims wonder if they should have known better. “I really felt like I made a terrible mistake and I ruined my life personally,” says Allan Goldstein, a retired textile-company owner who lost his entire IRA. He and his wife, Ruth, now live with their daughter in the San Fernando Valley, thousands of miles away from their old life in the Berkshires. “Everybody has some kind of feelings of Why did I do it?” But Ron Stein insists it would have been next to impossible for an individual to detect the fraud. “I’m an investment adviser, and once I saw that Madoff’s firm was an SIPC entity, and had been SEC investigated, it was absolutely clear to me that this guy was doing what he said he was doing. There’s no way he should have been able to get away with a Ponzi scheme through even the most basic investigation.”

Madoff victims reserve a special place in hell for Madoff himself. But there’s not much they can do now with that anger. He’s been convicted, sentenced, and all but executed in the court of public opinion. Perhaps because of that, many victims now direct their ire toward larger forces. “Growing up in the Vietnam era, we were always more skeptical than our parents were about America,” says Cyndee Friedman. “But now I am completely jaded. You see these congressmen when they pull the SEC in—they speak in these sound bites about helping the victims. You know they don’t mean it. Greenspan says, ‘I thought they would be honest.’ Give me a break. Wall Street, honest? When there’s a buck to be paid? Congress is not working for America. They’re working for their own self-interests. We don’t believe in Obama anymore, because he’s always about doing the right thing, blah blah. The right thing would be to tell the SEC and SIPC to act responsibly and follow the law. And nobody wants to hear from us. We just get cold shoulders from everybody. It’s very disheartening.”

Ron Stein says regulators should not have allowed Madoff to manage retirement money in the first place. “IRA custodians have to be vetted and have to go through a strict set of guidelines—theoretically.” He also has questions about the National Association of Securities Dealers and the Financial Industry Regulatory Authority—“because they were the ones that were undertaking annual audits, those are the firms that are responsible for assessing on a regular basis broker-dealers. That’s their job. And in my opinion they are the ones that failed most miserably. And the fact that SIPC and FINRA work so closely together?” Many victims have suspicions about the SEC: the five different blown chances it had to bust Madoff; its inability to even confirm Madoff’s trading records; Madoff’s own astonishment from prison that he wasn’t caught sooner. “Picard would not have taken the position that he has taken on net equity unless he had tacit or explicit support from at least the lower levels of the SEC and SIPC,” says Stein. “He wouldn’t have been so strategically naïve to make that misstep, knowing that there was a strong possibility that four or five months down the road the SEC was going to undermine it. It’s clear that he has been working to some degree in cahoots. The SEC was an unwitting co-conspirator in this fraud. The government essentially drove the getaway car on this.” Picard would not comment for this story. An SEC spokesman would only say the agency is considering its position regarding the net-equity question and has not yet settled on a recommendation.

Maureen Ebel, for her part, is trying to move past anger and blame—to get on with her life, however different it is now. “I’m Irish Catholic, one of six children. I worked hard for everything I got, and that’s what I’m doing again.” She even sees something of a silver lining. “I have such an appreciation,” she says, “for the truly poor.”

But not everyone is so sanguine. “It may sound self-serving, but I didn’t feel like I needed to grow,” says Ronnie Sue Ambrosino. “My husband and I would wake up almost every morning and pinch ourselves and say. ‘We are so blessed.’ And we appreciated it. We still know that now. But there’s such a black cloud over it.”


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