J. Ezra Merkin Ordered Not To Destroy Records

by Darren

J. Ezra Merkin has been ordered to not destroy any financial records related to the dealings of Bernard J. Madoff. Merkin is the chairman of GMAC who runs several hedge funds which invested with Madoff. The dealings came to light when one of Merkin’s clients, New York University, learned that Merkin had lost $24 million of their capital.

The suit claims that Merkin and his hedge fund, Ariel Fund Ltd. and its’ management group Gabriel Capital Corporation, failed on their responsibility of cash management by turning the money over to Madoff for investment. The Ariel Fund Ltd has already announced plans to liquidate their holdings in light of the recent scandal. The suit also mentions Fortis, who partnered with Merkin in the creation of Ariel Fund Ltd. All told, NYU had invested a staggering $94 million into the fund.

As the losses come in from the Madoff scam, the elite of New York City Jewish philanthropy are among the victims, as well as helping to perpetrate the fraud. Merkin is the grandson of Hermann Merkin who was known as a titan of Jewish philanthropy. He donated gave millions to help build Yeshiva University, and the Fifth Avenue Synagogue.

Human loss mounts in Madoff Ponzi Scheme

The human expense of the Madoff scheme is mounting. Charitable foundations and lives have been destroyed. Merkin clearly used his influential position and the capital of Yeshiva University to invest $1.8 billion into Bernard Madoff’s firm.

That was little consolation, however, to Yeshiva University, said to have lost $110 million of its endowment; or to Congregation Kehilath Jeshurun, the Ramaz School of Manhattan and SAR Academy in Riverdale, said to have lost substantial sums; or to several family foundations belonging to Merkin’s fellow trustees at Yeshiva University, including Robert M. Beren and Ludwig Bravmann.

Another Ascot casualty was a charitable trust founded by real-estate magnate Mortimer Zuckerman, the chairman of real-estate firm Boston Properties and owner of the New York Daily News and U.S. News & World Report. That lost $30 million.

NYU said Merkin blindly turned the money over to Madoff.

“Without making disclosures in the quarterly reports to investors, and in the face of an extraordinary number of ‘red flags,’ Merkin, for years, simply turned over a substantial portion of Ariel’s funds to Madoff,” said NYU in their complaint.

Merkin has so far denied wrongdoing, laying the blame squarely on Madoff.

“Mr. Merkin remains committed to obtaining for shareholders the best results possible in the wake of the terrible fraud committed by Bernard Madoff,” Andrew Levander, attorney for J. Ezra Merkin said.

Madoff has caused huge damage to the work of Jewish philanthropic organizations

It’s safe to say the the amount of damage to Jewish philanthropic organizations is significant.

The Elie Wiesel Foundation for Humanity has lost virtually all of their funds as a result of investing with Madoff.

The Elie Wiesel Foundation for Humanity said Wednesday it invested $15.2 million or “substantially all” of its assets with Bernard Madoff, adding the name of the Nobel Prize winner to the confirmed list of those caught up in what Mr. Madoff described as a $50 billion Ponzi scheme.

“We are deeply saddened and distressed that we, along with many others, have been the victims of what may be one of the largest investment frauds in history,” the foundation said in a statement posted on its Web site.

The foundation was started by Holocaust survivor and Nobel Prize Winner Elie Wiesel and his wife in 1986. The foundation will not be going out of business. Of course a man like Wiesel who won a Nobel prized for detailing “his own personal experience of total humiliation and of the utter contempt for humanity shown in Hitler’s death camps” can survive a financial crisis like this. Other charitable foundations have not been so lucky, already wrapping up their operations upon learning of their lost endowments.

Bernard Madoff is unique among scammers due to the size of his Ponzi scheme, and the fact he was willing to stick it to anyone, even fellow Jewish people, no matter how close of a friend they considered him to be.