Wall Street Investment Scam Victims Emerge

(CBS/ AP) From a Jewish youth charity in Boston to major banks as far afield as Zurich, the list of investors who say they were duped in one of Wall Street's biggest Ponzi schemes is growing.

Around the world, investors who sunk cash into veteran Wall Street money manager Bernard Madoff's investment pool spent the weekend calculating how much exposure they might have. The 70-year-old Madoff, well respected in the investment community after serving as chairman of the Nasdaq Stock Market, was arrested Thursday in what prosecutors say was a $50 billion scheme to defraud investors.

One thing was clear in the fallout from his arrest: The alleged victims span from the super rich, to pensioners and powerful financial institutions, to local charities. Some investors claim they've been wiped out, while others are still likely to come forward.

Retired West Palm Beach, Fla. couple Joan and Arnold Sinkin lost their life savings in the scheme. "Our life is upside down," Joan told CBS' The Early Show.

Her husband added, "It's like a bad dream. We're bankrupt."

"There were a lot of very sophisticated people who were duped, and that happens a great deal when you've had somebody decide to be unscrupulous," said Harvey Pitt, a former chairman of the Securities and Exchange Commission, a regulator in charge of monitoring investment funds like the one Madoff operated.

"It isn't just the big investors," he said. "There's a lot of charitable and foundation money involved in this, which is the real tragedy."

Charities across the country are expected to be directly affected by the collapse of Madoff's investment fund. The assets of Bernard L. Madoff Investment Securities LLC were frozen Friday in a deal with federal regulators and a receiver was appointed to manage the firm's financial affairs.

One of the largest financial scams to hit Wall Street has investors wondering if they'll ever get their money back.

In Boston, the Robert I. Lappin Charitable Foundation, a charity that financed trips for Jewish youth to Israel, said on its Web site Sunday that the money for its operations was invested with Madoff.

"The money needed to fund the programs of the Lappin Foundation is gone," it said. "The foundation staff has been terminated today."

The money needed to fund the programs of the Lappin Foundation is gone. The foundation staff has been terminated today.

Robert I. Lappin Charitable FoundationNew Jersey Sen. Frank Lautenberg, one of the wealthiest members of the Senate, entrusted his family's charitable foundation to Madoff. Lautenberg's attorney, Michael Griffinger, said they weren't yet sure the extent of the foundation's losses, but that the bulk of its investments had been handled by Madoff.

Lautenberg's foundation handed out more than $765,000 to at least 100 recipients in 2006, according to the most recent listing on Guidestar, which tracks charitable organization filings.

The foundation helps support a variety of religious, educational, civic and arts organizations in New Jersey and elsewhere, and its contributions range from a gift of than $300,000 to the United Jewish Communities of MetroWest New Jersey to a $2,000 donation to a children's program at the Hackensack Medical Center.

Reports from Florida to Minnesota included profiles of ordinary investors who gave Madoff their money. Some had been friends with him for decades, others were able to invest because they were a friend of a friend. They told stories of losing everything from $40,000 to an entire nest egg worth well over $1 million.

They join a list of more powerful investors that have come forward, all worried about the extent of their losses. The roster of names include Philadelphia Eagles owner Norman Braman, New York Mets owner Fred Wilpon and J. Ezra Merkin, the chairman of GMAC Financial Services, among others.

Beyond U.S. hedge funds, more corporate names disclosed exposure to Madoff. Late Sunday, some of Europe's biggest banks acknowledged they, too, were exposed to Madoff's investment fund.

Switzerland's Reichmuth & Co. said the private bank has $327 million at risk. It told investors that they "sincerely regret" being affected.

French bank BNP Paribas estimated its exposure Madoff's fund could lead to 350 million euros ($467 million) in losses.

In a brief statement Sunday, Paribras said it has "no investment of its own" in Madoff's hedge funds but "does have risk exposure to these funds through its trading business and collateralized lending to funds of hedge funds."

Spain's Grupo Santander SA, Europe's second-largest banking consortium, said its clients had an exposure of 2.33 billion euros ($3.1 billion) to Madoff's investment funds, mostly through the Optimal Strategic US Equity fund, according to reports.

Japan's largest brokerage, Nomura Holdings, said Monday it has 27.5 billion yen, or about $306 million, in exposure to the Ponzi scheme.

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