Ponzi Schemes

Santa Monica retiree Bob Braslau considers himself a victim of accused fraud mastermind Bernard L. Madoff. But the court-appointed bankruptcy trustee, he fears, might consider him a beneficiary. Braslau was among the thousands who lost money when the Madoff fund collapsed amid allegations that it was a $50-billion Ponzi scheme.

Stanley Chais, the former Beverly Hills money manager under investigation for his role in the Bernard L. Madoff scandal, has more than enough money to hire a lawyer for himself, said a trustee in a Madoff liquidation case. Marc Hirschfield, a lawyer for the trustee, responded Thursday to Chais' claim that he can't pay for a lawyer and has life-threatening medical problems that could compromise his ability to withstand a trial.

Stanley Chais, a Beverly Hills money manager and philanthropist who steered hundreds of millions of dollars into investments overseen by Bernard L. Madoff, has fallen ill, relocated to New York and wants to move lawsuits against him from state court to federal court in Los Angeles. Investors have filed at least three lawsuits against Chais, accusing him of failing to properly safeguard their money and of not disclosing that he was investing with the disgraced New York swindler.

The convicted mastermind of an investment scam that bilked retirees out of nearly $190 million was sentenced Friday to spend the rest of his life in state prison. Daniel Heath, 51, of Chula Vista was sentenced in Riverside County Superior Court to a term of 127 years and four months. According to Deputy Dist. Atty. Michael Quesnel, who prosecuted the case, Heath would have to spend half that time in prison before being eligible for parole.

Wall Street financier Bernard L. Madoff's alleged $50-billion Ponzi scheme appears to have extended deeply into Southern California's Jewish community, with millions of dollars in losses tallied Monday by charitable organizations, Hollywood executive Jeffrey Katzenberg and a foundation bankrolled by director Steven Spielberg.

When federal postal inspectors raided a Spanish-language religious bookstore in Huntington Park, they said they found something unusual: envelopes filled with $3 million in cash. The discovery helped federal prosecutors build a case against Norwalk businessman Milton Retana, a Salvadoran citizen.

"Good news, bad news" probably doesn't begin to describe the day Hollywood screenwriter Eric Roth had last week. Roth was nominated Thursday for a Golden Globe award as screenwriter of "The Curious Case of Benjamin Button." And that same day, he learned that he lost all his retirement money to Bernard Madoff's alleged $50-billion Ponzi scheme. "I'm the biggest sucker who ever walked the face of the Earth," Roth said Tuesday.

Investors have barely had time to tally their losses from Bernard Madoff's alleged $50-billion Ponzi scheme, but securities attorneys aren't wasting a moment in laying claim to their piece of the scandal. Some lawyers are aggressively prospecting for clients, and a few firms already have taken cases to court -- one less than 24 hours after the revelation of Madoff's alleged wrongdoing. Several more cases were filed Tuesday.

The Bernard Madoff books are in the works. Less than one week after the former chairman of the Nasdaq stock exchange was arrested in an alleged multibillion-dollar Ponzi scheme, publishers HarperCollins and the Random House Publishing Group each reported that they had signed up books about the scandal. In 2010, HarperCollins will release an investigative work, currently untitled, by reporter-anchor Andrew Kirtzman, who has been featured on the New York television stations WCBS and NY1.

It's conventional wisdom that Bernie Madoff, with his alleged $50-billion Ponzi scheme, has dealt a massive blow to Wall Street's credibility. That idea ought to give many individual investors a good laugh at the end of a devastating year for their own finances. I don't want to minimize the path of destruction, financial and psychological, that Madoff blazed. But I'm amazed that there seems to be such shock out there that the man could have ripped off people who trusted him.