05.22.09 12:52 PM ET
My $500,000 Madoff Check
Bernie Madoff stole $5 million from The Daily Beast's Burt Ross, who just received a half-million-dollar check back from the bankruptcy. Never has a 90 percent loss felt so good.
Today is my lucky day. I just opened the mail and there it was—a $500,000 check! My Securities Industry Protection Corp. claim has been approved, and four months after I filed the claim, my prayers have been answered. I haven’t gone through the mail with such anticipation since I was a teenager looking for that pink perfumed envelope with lipstick on it. The check will be deposited as quickly as I can drive to the bank and as soon as the check clears, I will pay off the first mortgage on my home and the balance of my home-equity loan. To paraphrase Dr. Martin Luther King Jr., I declare, “Debt-free at last! Deb-free at last! Thank God Almighty, debt-free at last!
I am no fool. I am well aware there is a huge difference between $500,000 and the $5 million I lost because of Madoff. I am not simply referring to the one zero, but to the 40 years of work flushed down the toilet. Yet I consider myself fortunate because I understand the average American will never see a check for $500,000. I remain well off by any reasonable standard and for that I am grateful.
I know only one other person who has actually gotten his check—the husband of my first cousin once removed. Yes, Madoff brings families together.
I am also one of the very first people to receive their SIPC check. Almost 9,000 Madoff investors have filed claims, and as of a week ago, fewer than 1% of the claims had been approved. I know only one other person who has actually gotten his check—the husband of my first cousin once removed. Yes, Madoff brings families together.
Why am I one of the first to get my claim processed? A friend of mine attributed it to my good luck, but good luck is hardly a term to apply to somebody who recently had $5 million stolen. Rather I believe the early filing of the claim with accurate and detailed supporting documents, and the fact we never took money out and only had money invested for a few years, made the claim about as simple as it gets. Those who took money out over time or invested prior to 1996, when the records gathered by the Madoff trustee are not as clear, are going to have to wait longer. And the thousands of claimants who invested through feeder funds (I invested $2 million directly with Madoff and $3 million through the Ascot and Gabriel hedge funds) may never qualify for SIPC money, even though they are hurting every bit as much as those who invested directly with Madoff.
Like in most of life, fairness is not the governing principle. A person who invested $500,000 directly with Madoff will get 100% of his money back from SIPC; a person who invested $500,000 in Madoff through a feeder fund will probably get nothing back from SIPC; a person who directly invested $100 million with Madoff will get a check which represents only one half of 1 percent of his investment.
I am pleased that Irving Picard, the trustee liquidating Bernard Madoff’s defunct firm, recently established a hardship program to expedite the review of claims of the hardest-hit investors. The program allows for expedited payments of up to $500,000 each to investors who cannot pay medical bills, food bills, etc. and for people 65 years and older who have been forced to come out of retirement. These people deserve preferential treatment.
For those who persistently and ignorantly believe that Madoff investors are somehow guilty of greed and do not deserve a government bailout, let me remind them that the SIPC money is not paid out of taxpayer dollars but is paid from premiums paid by members of the securities industry and in fact will represent the bulk of what the Madoff investors ultimately recover. As for me, I am grateful the check has arrived—10 percent of a loaf is better than no loaf at all.
Burt Ross, former mayor of Fort Lee, New Jersey, and former administrator of the New Jersey Energy Office, is a lawyer and real-estate investor. A book The Bribe was written about his exploits with the Mafia.