The Grinch that Stole Hanukkah
Just two weeks ago, Bernie Madoff pled guilty to 11 felonies which included security frauds, wire frauds, mail frauds, money laundering and perjury for what has been called the greatest investor fraud committed by one person ever. For those who do not know, Bernie Madoff was chairman of the Bernie L. Madoff Securities LLC which bought and sold stocks on the New York Stock Exchange. He gained great fame when he helped develop a computer technology that was able to disseminate its quotes called the NASDAQ. By 2008, Madoff’s firm was the sixth largest market trading on Wall Street. However, he told his sons that the asset management arm of his firm was a ponzi scheme. Later that day his sons told the authorities and arrested Madoff the next day. Recently, prosecutors have said that the scandal has amounted to nearly 65 billion dollars in fraud.
Oddly enough Madoff has been accused many times for such acts. For example, in 1999, a financial analyst named Harry Markopolos told the SEC (Security and Exchanges Commission) that Madoff could not have both legally and mathematically made the amounts of money he said he was making. On top of that the amount of accounts he had was said to be unimaginable.
Many of those accounts and small investors were of the Jewish religion and many of those people live near the Twin Cities. Thanks to Madoff, all of them have losses to as much as 130 million dollars in savings. In Hopkins, Minnesota there is a small country club called Oak Ridge Country Club that is all Jewish. In this country club, attorneys have stated that the losses there have reached about 600 million dollars. In order to get to these people, Madoff asked help from a stock broker in the Twin Cities by the name of Mike Engler. Unlike Madoff, Engler focused more on local stocks and obscure edges of the financial market. It was almost an honor to invest in guys like Engler and Madoff. According to Minneapolis asset John Pohlad, “The illusion was created that Bernard had to pick you to be in there… Madoff was one of the most difficult to compete against because he had so much momentum and mystique about him.” Violet Werner, a member of the Oak Ridge Country Club, set up a small foundation to support the local arts and cultural groups. She got help from Madoff and invested 1.6 million dollars with him. "The whole thing is just the most horrible scam I've ever heard of," she said. "This money went to help people in need, and to people who do wonderful work. I'm so sad I can hardly speak." The scandal has gotten so bad that there has been talk about the club shutting down after 88 years of history.
Other places like the Hillcrest Country Club in St. Paul and the Upsher-Smith Laboratories in Maple Grove have lost millions of dollars all thanks to Madoff. Bruce Graybow, president of Graybow Communications in Golden Valley, was caught in Madoff’s scam when his father told him that Engler was “honorable” and “trustworthy”. Bruce’s father sold his plumbing and heating business and invested that money into Madoff’s company. Bruce later created his own business in audio-visual systems. In 2007, he sold a big part of his company and invested his profit in Madoff. “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.” Graybow goes furthering in saying that, “It is shameful that after numerous inquiries from the investment community. The regulators didn't thoroughly research and investigate the truth and uncover the underlying mechanics of the Madoff operations.”
Many charities like human-rights activism and foundations that have been associated with Elie Wiesel and Steven Spielberg have been hit hard from this incident. “A lot of money has just disappeared. It's beyond shocking, the widespread damage that has resulted from this behavior,” said Barbara Frey, director of the human rights program at the University of Minnesota. “Local charities played a strong role in funding this work, and a lot of them are all of a sudden out of cash.” Obviously this comes at a bad time since the economy is in such horrible shape. Because all of those people have been frauded out of money by Madoff, they can reclaim some of their taxes in return for this situation.
Now the Jewish community must learn from their mistakes. Alexander Davis, rabbi at Beth El Synagogue in St. Louis Park stated, “It's definitely an opportunity, whether we wanted it or not, to rethink our values. We need to examine the cultural norms that allowed us to get into this situation. There's an opportunity to reorganize our thinking so that it better reflects our priorities.” As for the Hanukkah that occurred right after Madoff’s confession, “This year the lights of may seem dimmer, the gifts may be fewer, but the message of Hanukkah continues to shine forth brightly. We will not allow Madoff - the Grinch who stole Hanukkah - to dampen the message of Hanukkah. For the light of Hanukkah is not the sparkle of gelt but the spirit of god.”