bernardmadoff

$15 Million Recovered by California for Victims Indirectly Scammed by Bernard Madoff

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Bernard Madoff ran one of the biggest Ponzi schemes ever from his investment firm Madoff Securities. While many people were directly affected by it, there were people indirectly affected by it as well. In California, over 460 people had invested a total of $270 million through a Beverly Hills investment adviser named Stanley Chais. This adviser not only charged people high fees to invest their fortunes and life savings with him, but he invested it in Bernard Madoff’s investment firm. This meant that all the investors who gave money to Chais had lost their money too.

Seven years ago, Chais was sued by the California attorney general on behalf of the hundreds of victims who lost hundreds of millions of dollars. On Friday, an agreement was made to liquefy Chais’s estate which was worth $277 million. His entire estate will now be in the hands of his victims as part of the settlement. California’s attorney general also collected $15 million from the estate to pay for other claims made by investors of Chais’s companies. In 2010, Chais died of a blood disorder.

Madoff’s Ponzi scheme created a financial pyramid worth $20 billion. People invested money in Madoff’s company and then he would use that money to make payments to other investors who wanted to see a return on their investment. He would keep doing this repeatedly for decades. But in 2008, Madoff could not sustain the scheme any longer as more investors wanted to cash out their accounts. The only problem was the money wasn’t really there since Madoff had sent his clients fake financial statements.

Madoff pled guilty to securities fraud and is currently serving a prison sentence of 150 years. He scammed hundreds of victims including celebrities like Kevin Bacon and Steven Spielberg. Chais was accused of willingly going along with Madoff’s scheme but he died before he could ever have his day in court.

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