Local Madoff victims react to guilty plea

March 12, 2009 5:25:56 PM PDT
Bernie Madoff told a Federal Court in New York City that he is "deeply sorry and ashamed" for pulling off what may be the biggest swindle in Wall Street history, but there is not much satisfaction in that for his investors.

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The charges: securities fraud, money laundering, and perjury. Madoff responded with the word, "guilty," 11 times to all 11 crimes. It came as only partial solace to investors who want their money. When the judge ordered him to be led out in handcuffs to await sentencing, the courtroom erupted in applause.

At least 149 Northern Californians had money in Madoff's $65 billion scheme. They do not know if they will get any of it back. "I gave up hope for that," said Susan Letteer of Mill Valley, who lost so much money that she may sell her house, and might even leave the country. "My issue is with the Securities and Exchange Commission for continuing to let this guy continue to operate. We trusted them. The government is corrupt." Letteer did not watch the proceedings, she said it would be wasted energy.

"This was about greed," said Steven Falk of Oakland, who has a sign in his kitchen which reads, 'No Kvetching.' "Unfortunately, greed is a trait most Americans admire."

"What makes this worse is that Madoff was Jewish," Falk added. "His actions play into the worst of anti-Semitism. It's part of our faith that we give, not take, but Madoff kept taking, and taking, and taking. It's horrible for us."

Falk made his first investment with Madoff in 1986. "We rarely took anything out, and when we did, we put more money back," he said." "I even took out a second mortgage, and invested that, along with some inheritance money. We lost $300,000. Now I lie awake at night."

Falk retired, last year, after three decades of teaching with the Oakland Public Schools. He has a pension, but not enough. "I'm trying to go back to consulting. My wife has a disability and my elderly mother has run out of money. Just when I thought it would be okay, this happens," he said.

Local victims of Madoff were happy to see him led off in handcuffs today, but most of them have bigger concerns with more pressing financial realities. "Given the choice between vengeance or getting my money back? I'll take the money," says one who asked to remain anonymous.

"It's bad for us that he doesn't appear to be making a deal," says Letteer, who believes that Madoff has stashed some of the money. "It means he's still trying to protect his wife, family, and partners. Honor among thieves."

Cliff Bernie, owner of Bernie Fabrics in San Mateo is another of Madoff's victims. He recently found out he lost $1.7 million that he had invested with Madoff. He is now working hard to save his family business that has been in San Mateo for 51 years.

"It was total shock," Bernie said. "The drive home was arduous at best." That is how Bernie describes the moment he realized he was out $1.7 million. It changed everything at the Bernie Fabrics store in San Mateo, where a massive sale is underway in order to keep the cash flow going.

Bernie never had a hint it was all a fraud.

"I inherited the investment, something my parents had for 20 years; they had been turned onto this by the oldest, trusted, most trusted friends, so I had no reason to doubt it," Bernie said.

Bernie Fabrics is hoping to ride out this disaster, and the current recession and keep the family business alive. As for a sentence for Madoff, Bernie has a suggestion.

"I don't think there's a punishment for Madoff that fits the crime, I really don't; I happy he's getting put away, I hope he stays put away for the rest of his life," Bernie said.

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