The local fallout from the Bernard Madoff scam was updated in an article last weekÂ in Fortune magazine. Writer Dave Kansas, who is from St. Paul, visited Oak Ridge Country Club in Hopkins, the predominantly Jewish club where many members were lured into Madoff’s massive Ponzi scheme. The AJW first reported on this in our Dec. 19, 2008, edition.
The Fortune story rehashes the involvement of the late Mike Engler, who was with the Engler & Budd brokerage firm and served as Madoff’s representative to the Oak Ridge members. Members of Hillcrest Country Club, the club for well-heeled Jewish St. Paulites, also reportedly were clipped by Madoff, 70, whose New York City-based operation came to a halt with his arrest by FBI agents on Dec. 11.
The Fortune story notes that the Madoff scam spans generations, and reports on Bruce Graybow, president of Graybow Communications in Golden Valley:
[Graybow] became familiar with Madoff through Graybow’s late father, Marvin, who had regarded Engler as an “honorable” and “trusted” family friend, Graybow told Fortune. After his father sold the family’s plumbing and heating business, the family poured that money into Madoff’s firm. Bruce built his own business, which provides corporate audio-visual systems, and eventually sold a chunk of it in 2007. As his father and friends had done, he placed most of the proceeds with 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.” He also felt physically ill and went into a cold sweat. “I put on my coat, and I walked to my friend’s house down the street to gather my thoughts and sort things out.”
The Fortune story will also prompt local speculation about the identity of a woman who became the “mistress of a rich and powerful man in the Twin Cities. After a chance meeting in a park, they began a relationship that lasted nearly 20 years and included a promise that he would always take care of her. Once every quarter, a check from a Swiss bank account that included the name of Madoff’s securities firm arrived in her mailbox.” Of course, the mystery woman didn’t receive herÂ January check; and there will be no more checks inÂ her mailbox.
As the AJW reported last month, local losses from the Madoff scam likely will have a profound impact on the revenues of the Jewish federations, synagogues and other Jewish agencies. “As difficult as this tragedy is for some families, it’s the loss to the poor and to the charitable programs in the Cities that is even worse,” Minneapolis lawyer Andy Parker, who reportedly is representing some Madoff victims, told Fortune.
The families who suffered losses in Madoff’s pyramid scheme are trying to recover their money, or some of it,Â through the courts and other avenues.
In another Engler-related connection, Bloomberg.com reported last week that U.S. prosecutors and regulators are investigating Frank DiPascali, Jr., 52, who rose through the ranks and eventually called himself chief financial officer of Madoff’s investment firm.
The Bloomberg story quoted Boyer Palmer, who lives in Rogers, Minn.,Â and his son-in-law, Tim Murray, about their dealings with DiPascali. Palmer, 58, told the AJW last week that he and his family, including children and grandchildren, had $12 to 15 million invested with Madoff. Palmer, who is not Jewish and is retired from the plastering and drywall business, told the AJW that he got involved with Madoff through Mike Engler.
Regarding Madoff’s local Jewish investors, it seems that scant details of the enormous financial scandal have emerged so far.
– Mordecai Specktor