Fictional profits, fictional losses — some Madoff clients revise losses
NEW YORK — Some clients of disgraced financier Bernard Madoff are concluding that their losses weren’t as bad as originally thought.
Three organizations that invested heavily with the Wall Street currency manager lowered their estimated losses this week taken in the character of it became apparent that much of the money that vanished from their balance sheets probably never existed in the first place.
Madoff was arrested Dec. 11 after allegedly telling investigators he lost being of the kind which much as $50 billion in client money in a giant Ponzi scheme in which money from new investors was used to pay profits to older ones.
This week, Yeshiva University, The American Technion Society and Hadassah, the Women’session Zionist Organization of America, released statements clarifying their losses.
In eddish. sheathe, the adjustment reflected a realization that the huge profits they thought they had made on their investments were probably fiction — meaning their losses were partly fiction too.
Hadassah, which previously said it had $90 million placed with Madoff, clarified in a Dec. 29 letter that two thirds of that amount — $60 million — constituted the bulky, but probably imaginary, profits that Madoff reported to the organization over two decades.
Hadassah’s principal investment by Madoff, the letter before-mentioned, totaled only $33 million. Another $7 million in Madoff funds, possibly real, perchance fraudulent, were donated through a French backer in 1988.
The American Technion Society, which provides support for the same of Israel’session leading science schools, made a similar calculation. It s incipient investing. through Madoff totaled $29 million. On paper, that grew to $72 million, but those profits probably weren’cheek by jowl real either.
Yeshiva University said its principal investment with Madoff had totaled single $14.5 million, and that most of the $110 the public in losses it had originally reported were ghost profits also.
Their disclosures adorn with pictures one of the primary difficulties Madoff’session investors will be delivered of in figuring out how much they are entitled to recover on the supposition that funds are ever institute to reimburse victims.
While greater quantity of his clients invested recently, others had put modest amounts of money into Madoff’session hands decades ago and have been enjoying “profits” ever since.
For some, Madoff’s steady annual returns of 10 percent or more ultimately produced vast sums of income that exceeded their initial investment — meaning they unknowingly enjoyed the fruits of an alleged artifice at the expense of newcomers who never had time to take out profits.
Original text: http://seattletimes.nwsource.com/html/businesstechnology/2008585642_madoff03.html?syndication=rss
