Although Bernie Madoff's $50 billion Ponzi scheme engulfed its share of wealthy East Coasters, a comprehensive list of victims made public today as part of a U.S. Bankruptcy Court filing revealed 43 Madoff accounts attached to San Francisco addresses. Some belonged to investment firms and venture capital giant Arthur Rock, but regular folks in San Francisco also lost their shirts.
Take Sherry Maccabee, for example. "I've worked hard, done my job, paid my taxes," she says. "Now I've lost my retirement money. I'm 57 years old." Maccabee, who was working part-time as an interior designer, has been forced to go back to work full-time and has started a new career in real estate.
In addition to working and raising a daughter, she's been educating herself about how she could have gotten wrapped up in perhaps the largest investment fraud in history. Like many of Madoff's victims, she blames the U.S. Securities and Exchange Commission for failing to detect the scheme and protect investors from financial ruin. "The SEC in 1992 publicly stated that this investment house was a reliable investment house," she said. "I considered it a safe bet, and I thought my government was doing the job it was set up to do."
Although Maccabee has read that some investors were regularly making 10 to 12 percent returns with Madoff (which, in hindsight, seems too good to be true), she says hers were usually between 5 and 7 percent a year after the taxes she paid on her nonexistent earnings.
She knows that things could be worse. "I've been listening to the terrible, heart-wrenching stories of other people who are going through this," she says. "They're losing their homes. They don't have money to go out and buy breakfast. Seventy- and 80-year-old people are afraid to turn on the heat." Maccabee has connected with other victims through email@example.com, and highly recommends the online group, where members discuss anything from litigation to coping strategies and how to get by on a tiny budget.
Maccabee is tired of hearing from the media about how all Madoff victims were rich people. "Not everyone was a millionaire," she says. "There are people like us -- hard-working people." Sometimes she thinks back to how her parents fled persecution in Eastern Europe and arrived in America from with nothing. Back then, her father was a great believer in the American marketplace, but now she thinks his admiration was misplaced. "The market place is not only unruly, it is not worth people's faith," she says.
"The worst part is, nobody can say where the next round is coming from, and how soon, and how bad it will be for the next group and the group after that," she said. "Being an investor today is not only risky, but potentially dangerous to your long-term survival. That is a very scary reality."