Sarah Mandell and her husband, Bob Chew, wanted to cut their expenses and lead a "simpler life," so in 2004 they sold their house in Los Angeles and set out for the mountains of Colorado.
To secure their future, they took the money from the house and invested it with Stanley Chais of Beverly Hills. It seemed like a safe bet: Chais was a wealthy investment advisor and trusted family friend who had produced strong returns for Mandell's relatives for two decades.
"You would think in 20 years, if there was something wrong with this, it would have been uncovered," said Mandell, a personal chef.
Eventually it was, but too late for Mandell, 45, and Chew, 55, a marketing consultant. The couple learned days ago that their $1.2-million investment account had been obliterated in an alleged $50-billion fraud run by New York financier Bernard L. Madoff with the help -- knowingly or not -- of Chais and others who funneled investors' money to him.
The fallout has been enormous, hitting hardest in Jewish communities here and abroad, racking charities and families that had invested directly with Bernard L. Madoff Investment Securities or through "feeder funds" like Chais'. Many who lost money were in the entertainment industry, Hollywood heavyweights and nonmarquee names alike.
Madoff, 70, a former chairman of the Nasdaq Stock Market, has been charged with securities fraud and is said to have confessed to running a Ponzi scheme, in which newer investors' money was paid out to earlier ones. His company's assets have been frozen and a receiver has been appointed to manage what's left.
Chais, 82, did not respond to interview requests. Last week, he told the Jewish Journal that he and his family also were swindled and had lost "a huge amount of money." The Chais Family Foundation, which in 2007 reported assets of $178 million and charitable contributions of nearly $8.2 million, also was wiped out and has shut down.
Whether Chais was merely a victim is the $250-million question in a federal lawsuit filed last week in Los Angeles, alleging that is the sum scores of investors gave to him and his Brighton Co., a limited partnership formed to manage their money.
The complaint charges that Chais and his firm were involved in "false, misleading, unlawful, unfair and fraudulent acts and practices," but it offers no hard evidence that he knew the money was being pumped into a Ponzi scheme.
The full scope of the alleged fraud and Chais' possible role in it have yet to be spelled out. What's not in doubt is that he was a major philanthropist, who lived modestly despite his wealth, while steering millions to Jewish charities.
He had an unpretentious home in Beverly Hills, a small apartment in New York and "he drove around in old Toyota Celica or something" akin to it, Chew said.
"Stanley's a charming guy," he said. "Anyone would want to be around him. He's very gracious. . . . Life was always good."
Chais and his wife, Pamela, a playwright and screenwriter, were mainstays of Jewish philanthropy for three decades. Their family foundation supported scores of charities, most of them related to improving education in Israel.
Stanley Chais holds honorary doctorates from or has served on the boards of a raft of Israeli schools and universities, including the Weizmann Institute of Science, the Hebrew University of Jerusalem and the Technion-Israel Institute of Technology, often likened to MIT.
He also has poured money into at least 50 Israeli businesses, according to online biographies posted by Jewish groups with which he has been affiliated.
"Stanley Chais supports Israel not only in higher education, but also helps to establish Israeli start-up companies which include new immigrant scientists," reads one. "The emphasis is on developing human capital in Israel towards joining the international, technology front of progress."
Those who have known Chais through his philanthropy say they do not believe he would knowingly engage in a Ponzi scheme.
"Stanley is the kind of man who has great credibility in the community and would never do anything to jeopardize that. Surely he was duped as well," said Geoffrey Gee, a former development director for American Society for Technion, its U.S. fundraiser.
"If you put 100 people in a room, he'd be the one you'd never expect to have this kind of problem with," Gee said.
According to its tax filings, the Chais Family Foundation gave $300,000 to Technion's U.S. fundraising organization in 2006. The university will lose not only the foundation's support, but also $29 million it had placed directly with Madoff and $40 million more in paper profits.
Matthew Ross directs Hebrew University's fundraising arm in Los Angeles, which received $275,000 from the Chais foundation in 2006. He has known Chais for four years.
"In my association with him, he's been a generous person, a very nice person and it's a tragedy -- for him personally and for the institutions that he's been so supportive of for many years," Ross said.