Bernie Madoff’s Victims: Pride Goeth Before the Fall

There is a saying in the black community attributed to writer Zora Neal Hurston, “All my skinfolks, ain’t my kinfolks.” To break it down it means just because someone is a member of my tribe — racial (in Hurston’s case), ethnic or religious — doesn’t mean that he/she shares my same values or has my best interests at heart.

With the revelation that he was running a $50 billion ponzi scheme via his investment firm, investors with former NASDAQ chairman Bernie Madoff, are experiencing the shock of having lost both vast amounts of money — life savings for some — as well as perhaps some ethnic pride.

You see, Madoff is Jewish, as was many of his investors which included prominent businessman like real estate mogul and New York Daily News publisher, Mort Zuckerman, the Wilpon Family, owners of the New York Mets, and media moguls Jeffrey Katzenberg and Steven Spielberg.

This afternoon on Fox Business, I heard that Madoff’s brand of deception is called an “affinity scam” which, according the Securities and Exchange website is as follows:

…investment scams that prey upon members of identifiable groups, such as religious or ethnic communities, the elderly, or professional groups. The fraudsters who promote affinity scams frequently are – or pretend to be – members of the group. They often enlist respected community or religious leaders from within the group to spread the word about the scheme, by convincing those people that a fraudulent investment is legitimate and worthwhile. Many times, those leaders become unwitting victims of the fraudster’s ruse.

These scams exploit the trust and friendship that exist in groups of people who have something in common. Because of the tight-knit structure of many groups, it can be difficult for regulators or law enforcement officials to detect an affinity scam. (source)

Although every person and every institution that invested with Madoff’s firm will lose money and the pain of that loss will be significant depending on the amount, his fellow Jews, both investors with his company and others, who may have never heard of him a few days ago, will feel a uniquely toxic combination of shame and betrayal.

I cannot share their pain but I know it quite well.

No, I have not been a victim of a ponzi scheme but I have been “robbed” of  a great deal of money, opportunity and far too much of my self esteem as a result of putting my trust in “my people” — black people — only to have that trust wantonly violated. Like, I am certain, Madoff’s Jewish investors, I tend to think of myself as discerning and intelligent, one not easily duped.  I pride myself in my attention to detail and the ability to ask the right questions.  But, in recent years, as I began working with and for black organizations/businesses and individuals, I allowed emotion to take the wheel and placed my usually reliable reason in the back seat.

I am sure you are shaking your heads and wondering why.  You see, when you are a member of a minority group — religious, racial, or ethnic — you are often pressured to support the group.  If you don’t “Buy _______(insert ethnicity, race or religion)” , your actions are often seen as a betrayal.  You are chided to “Take care of your own first.” Why go somewhere else?” you are told.  And this is the one that really gets you right in the soft spot when you start to question their actions, “We would never hurt you.”  Underlying the aforementioned statement is the message is that you can’t trust “them” (non members of your “tribe”) and if you are a proud (fill in the blank), you will trust me/us without question.  The world outside of the racial, religion, ethnicity is a cold one and you would not want to be caught out there alone.

So, I trusted.  I took people’s word at face value despite my reservations.  My “Wait a minute” and “I need to you to explain” turned into “Go ahead” and “It’s okay.”  Although I was never one to buy into the “viva la raza” of racial solidarity, I still felt that I should give “my people” more chances than, as it turned out, they ultimately deserved.

“My people”.  Who are “my people”?  As I had come to discover through it all, they weren’t necessarily black, New Yorkers,  Catholic school girls, or people who eat organic food but individuals who fearlessly questioned authority, had a strong work ethic and, most importantly, who valued on honesty and integrity above all things. And they also saw themselves as a part of a greater whole — greater than race, ethnicity or religion.

As for the victims of Madoff’s manipulation, it is my sincere prayer that they do not take the actions of one man as, as Rabbi Marvin Hier of the Simon Wiesenthal Center put it on a Fox Business Channel broadcast, an “embarrassment for the Jewish community”.   I know the temptation will be to carry the burden of his sin on their collective backs, but it’s imperative that they lay that burden down.  As Rabbi Hier said, “Jewish life will continue.”  Wait…let me correct that….Life will continue.

For a list of firms that have been exposed to Madoff’s schemes, click here.

Related Article

“For Investors, Trust Lost and Money Too” (New York Times)

UPDATE

Just read an NY Times article about a Madoff victim whose stepdaughter (Louise Crawford) I happen to know personally. Wow, I am particularly stunned by the far-reaching effects of his incredibly selfish act.  To read the article, click here.



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