Former fashion and media executives are among those who have lost significant sums in Bernard Madoff’s alleged $50 billion Ponzi scheme.
Those caught up in Madoff’s investment scam are said to include former Leslie Fay chairman and chief executive officer John Pomerantz and his wife Laura, principal at PBS Realty Advisors LLC; Adrienne and Luigi Vittadini; Nine West founder Jerome Fisher; Kay Windsor founder Carl Shapiro; Lee Mellis, former chief financial officer of Puritan Fashion Corp., and Alexandra Penney, former editor in chief of Self.
Madoff was arrested last week and charged with a massive securities fraud. He made his first public appearance at the federal courthouse in Manhattan on Wednesday, where he was ordered to undergo house arrest and wear an electronic bracelet.
Charities, hedge funds, universities, individual investors and banks have reported losses of more than $20 billion so far from Madoff’s alleged multibillion-dollar pyramid scheme, which is believed to be one of the largest frauds in U.S. history.
Shapiro’s total exposure to the Madoff fund was said to be $545 million, and of that, the Shapiro Family Foundation, founded by Shapiro and his wife, Ruth, lost about $145 million. The foundation has given more than $80.3 million over the past decade to hundreds of schools, hospitals, arts groups, and community-based nonprofit organizations. Nine West’s Fisher is said to have lost $150 million. The Pomerantzes, the Vittadinis and Mellis couldn’t be reached for comment Thursday. Penney said she lost her entire life savings.
“There are people who are worse off than I am, but it’s the shock and trauma [of losing] every cent I’ve ever earned with my own brains,” said Penney in a telephone interview Thursday. “I never inherited a dollar or took a cent of alimony. It’s all gone, and I don’t know what I’m going to do.”
Penney said she was introduced to Madoff’s investment firm through “an old wealthy family friend.”
“I had all my money in the bank, and then put all my money into it [Madoff’s firm],” said Penney, a professional photographer and author of several books, including “How to Keep Your Man Monogamous,” and “How to Make Love to Each Other.”
Unquestionably, the financial impact on fashion-related charities, many of whose donors have been financially wiped out, will be sizeable in the future. “The charities will be impacted by it. Most of those who support the charities and attend the functions were damaged by Madoff. It’s got to have an effect,” said Richard Feldman, president of Castle Hill Apparel, who wasn’t an investor with Madoff.
Marcia Stein, executive director of Citymeals-on-Wheels, said so far the charity has suffered a loss of $200,000 from a few donors who won’t be giving this year, which equates to 31,000 meals. “It’s a shame for everyone,” she said.
Some recent media reports have incorrectly stated that the UJA-Federation suffered losses associated with the Madoff situation. However, John Ruskay, executive vice president and ceo of UJA-Federation of New York, said, “UJA-Federation of New York did not invest, directly or indirectly, in Madoff securities, and did not experience any loss associated with this recent event.”
Rena Rowan Damone, the fashion designer who now lives in Palm Beach, Fla., hadn’t invested any money with Madoff, but described the mood in Palm Beach on Thursday as somber. She said she’s heard rumors they might have to close the Kravis Center for the Performing Arts in West Palm Beach “since most of the supporters were from the [Palm Beach] Country Club.” Madoff was a member of the club, as were many of his investors. One of the requirements of being admitted into his funds was to give a significant amount to Jewish charities.
“Palm Beach will change. A lot of the restaurants where you couldn’t get a reservation are practically empty,” Rowan Damone added. “Usually you can’t park [in Palm Beach], especially around Christmastime, and it’s not crowded since this happened. Everybody’s kind of disappointed. And the stores are empty. It’s a sad time.”
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