Friday, May 22, 2009


In the one Ponzi fraud I've known about first hand and in all the others I've only read about the perps were never interested in enriching anyone but themselves. The curious thing about Madoff is that real charities got real money - some over many years. An as yet undetermined number of billions may have been stolen but at the same time charities scored in the hundreds of millions - some over many years. This puts the blessed use of tainted money in a whole new light.

The court appointed trustee charged with clawing back as much as he can for redistribution to the rightful claimants is flinging lawsuits around and now it is possible the feds will step in with both civil and criminal complaints. Oy! Everyone assumes a lot, if not most, of the pilfered pelf will never be recovered. Theoretically at least the charities who were the recipients of stolen money may have some exposure even if they had no way of knowing it. Most of them have probably spent whatever they got from the Picowers, J. Ezra Merkin, David Levy, Stanley Chais, et al.

Nonetheless many charities (including a few of my clients) unwittingly received and spent stolen money to perpetuate their noble cause - and the people and organizations that benefited might not have been served without that money. And unlikely as it might be suppose a charity knew how some money they got came to be and went ahead and used it anyway on the principle that there is a greater good. That couldn't happen. People just don't behave that way. Do they?

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