So Bernie received a century and a half. You know, we had our very own "Mini-Madoff" in our area, except his Ponzi Scheme was in real estate. Aside from that, the scam was remarkably similar. Mini-Madoff was a respected Rabbi that had access to the very wealthy and very private Syrian Jew community here in Central New Jersey. His buying spree was so fast and furious that within a couple of years he had acquired 350 properties.
I have to admit that during his spree I developed quite a resentment for M-M. I kept asking; What qualifies this Guy to analyze, buy and manage real estate for investors on this scale? My resentment was rooted in the fact that he was screwing up the market. When I would go for a listing or talk to a potential seller, I would hear; Why should I do business with you? I'll just wait for Mini-Madoff to come along a pay me top dollar for my property. And he buys all cash! He was also screwing up the valuations. I heard from more than one appraiser that because he was buying in such a tight geographical area, when they would appraise his next acquisition they were picking up the comps on the properties that he had previously purchased. He was actually creating his own bubble!
M-M's empire cratered shortly after he deposited a bad $25.2 million check at his bank. He wrote the check from one account to be deposited into another. The first account had been closed, but he told the bank employees that he had talked to "corporate" and that the closed account was being reopened with enough cash to cover the check. The bank employees accepted his story and allowed the $25.2 million check to be deposited. This particular bank allows instant access to money moved between its accounts. The next day, he wired away $22.8 million, but never paid the bank.
I feel sorry for the bank employees that allowed the banking transaction to go through. They trusted M-M based upon an on-going business relationship, and the lack of better judgment got the best of them. Really, would a Rabbi lie?
The other thing that bugs me are the "inner circle" of real estate brokers that fed M-M the properties. There's no question in my mind that they couldn't get the properties in front of him fast enough, without questioning if these purchases actually made sense. The whole thing was driven by pure greed.
Personally, I'm glad to see him go. There's still remnants of Mini-Madoff in the market. An unfinished office building here. A bunch of boarded up houses there. It's amazing the junk that this Guy bought!
Still, you'll hear people say what a great and kind person Mini-Madoff is. But isn't that the hallmark of a good Con Man?
The one thing that Mini-Madoff does have over Bernie, at least as of this writing, he's still walking around free.
