NEW YORK — The Jewish non-profit world has been rocked by the securities fraud of Bernard Madoff, and the worst may be yet to come.
Madoff, the founder of Bernard L. Madoff Investment Securities LLC, was arrested Dec. 11 after admitting to his board that a hedge fund he ran was essentially a $50-billion “Ponzi” scheme, a type of illegal pyramid.
Since then, at least two foundations have been forced to close their doors because they had invested most of their funds with Madoff: The Robert I. Lappin Foundation in Salem, Mass., announced Dec. 12 that it would close after losing $8 million – all of its money – through investments with Madoff. And the Chais Family Foundation, which gives out some $12.5 million each year to Jewish causes in Israel, the former Soviet Union and eastern Europe, announced Dec. 14 that it had closed after losing all of its money through investments with Madoff.
At least one non-profit is calling out for help in the wake of Madoff’s collapse: The Gift of Life Foundation, a Jewish bone marrow registry that relied heavily on Madoff as a benefactor, announced on its website Sunday that it would immediately need to raise $1.8 million to make up for recent losses.
Sources close to Yeshiva University, where Madoff served as treasurer of the board of trustees and chairman of board of YU’s Sy Syms School of Business until he resigned last week, said that the school has lost tens of millions of dollars, if not more. But YU officials declined to offer any specifics.