Madoff does Minneapolis
Oak Ridge Country Club was hit hard by a big scandal, after wealthy families invested with Benard L. Madoff. This particular Country Club in mostly Jewish and was founded around the time of 1921. This is where the scandal started in the Twin Cities. Madoff had a very agonizing impact on these wealthy families’ lives. The “Ponzi” scheme that he used totaled over $50 billion all together from the different towns. In the town of Hopkins just west of Minneapolis, he preyed on Jewish families and Jewish foundations. Regional reports showed that there were losses of $300 million, but a local attorney has a different opinion. He says the $600 million is a much more accurate number that best describes the situation. The lawyer claimed that he knew two families that together lost a total of $130 million. Some of the rest of the money from the scandal was at a smaller scale, for example like for a child’s college savings and for retirement. This also got Jewish funded groups stuck in a rut and not able to pay basic core missions for the poor.
This however wasn’t the only hit the Twin Cities received, just two months before the Madoff case, Tom Petters was arrested and charged on 20 felony counts for a scam of about $3.5 billion dollars that he took from investors as well. Petters also scammed on a religious community, which happened to be his members from his own evangelical Christian faith.
Maddoth didn’t only hit in one place in the Twin Cities he also trapped the small group of Hillcrest Country Club, also a Jewish golf course, but this time in St. Paul. Bruce Graybow was personally affected and one of the victims of the former scam artist. He heard about Madoff from his late father, many gulfing buddies and good friends shared madoff’s name amongst each other and they formed a trust with him so a large majority were all affected. In Graybow’s case he put a large amount of money from his family plumbing and heating business into Madoff’s firm. These families that have been affected by this have truly had their lives turned upside down. “I saw this as a safe and conservative investment, a good place to put my discretionary savings,” says Graybow. “When I found out what happened, I was shocked and in absolute disbelief.” He also felt physically ill and went into a cold sweat. The state government is even involved in the process because many investors will have the right to reclaim taxes paid on fake gains at the state and federal level. Because of the way the economy is and for a state like Minnesota the impact of the losses could have major consequences.
The Oak Ridge Country Club members are worried about the future of the club because of what people may think from the scandal. To regain confidence the clubs president sent out letters to members reassuring them that they will pull through this just fine, he also inscribed the charitable work of the Oak Ridge members and encouraged them not to talk to them press about Madoff. Many houses of worship that are Jewish are already struggling from the economic rough times and in the near future the Madoff scandal could make things much worse. But even under these circumstances some of the rabbis are trying to teach the people to learn from this incident. Rabbi Alexander Davis is trying to be optimistic, even though he knows that people are shocked and some think that this brought shame to their Jewish Community. “It’s definitely an opportunity, whether we wanted it or not, to rethink our values,” says Davis.
Graybow thinks that the government failed to see Madoff’s mischief behavior even though there were warnings and many investigations into the firm. He thinks that the government should have a fund for victims. This sounds like a good idea but I don’t believe that this will work in the real world. Just as the writer says, “The line at the government till is already very long and is likely to grow longer” (Kansas). For right now there are no for sure answers for the Oak Ridge Club.