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Thread: The Bag Lady Papers - woman loses life savings in Bernard Madoff debacle

  1. #1
    Elite Member WhoAmI's Avatar
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    Default The Bag Lady Papers - woman loses life savings in Bernard Madoff debacle

    The Bag Lady Papers
    by Alexandra Penney


    Alexandra Penney—a New York artist and former editor of Self Magazine—lost her life savings in the Madoff debacle. Now she shares her wrenching trauma in a Daily Beast exclusive.

    Last Thursday at around 5 p.m., I had just checked on a rising cheese soufflé in my oven when my best friend called.

    "Heard Madoff's been arrested,” she said. “I hope it's a rumor. Doesn't he handle most of your money?”

    Indeed, he did. More than a decade ago, when I was in my late 40s, I handed over my life savings to Madoff’s firm. It was money I’d been tucking away since I was 16 years old, when I began working summers in Lord & Taylor, earning about $65 a week. Not a penny was inherited. Not one cent was from my divorce. I earned all of it myself, through a long string of jobs that included working as a cashier at Rosedale fish market in New York City in my 20s, and later, writing bestselling sex books.

    Before I reached for a bedtime Tylenol PM, I Googled the Hemlock Society. I wanted to know a painless way to die.

    When I hung up with my friend, I turned on the TV and began to scour Google for news until the message became nauseatingly clear: Forty years of savings—the money I’d counted on to take me comfortably through the next 30 years—had likely evaporated in Madoff’s scheme.

    THAT MOTHERFUCKER!! The soufflé fell.

    I called Dennis, my consort of 16 years, and he canceled the dinner guests. I took half of a very strong tranquilizer that I’d been stashing for years in case of a death in the family.

    My son, in his late 30s and my only child, called from California. “You can live in the back house, mom,” he told me, referring to the cottage behind his Santa Monica home. I was immensely grateful to the point of tears. But I am not going to be a burden to anyone. I never have been and I never will be.

    I’d imagined living out my so-called Golden Years working on my art, living in my East Side apartment, and God forbid having to hire an aide should I ever need one. Now what will happen to me? The only thing I have left is the contents of one small bank account I’d saved for a rainy day. Terrifying thoughts of state-run old people’s homes and those slow-eyed attendants who drug you and strap you to wheelchairs suddenly became horribly vivid in my mind.

    I had a great fear of being alone that night, and Dennis came right over. He walked in the door and gave me the biggest bear hug of my life and said, “Everything will be fine.” Dennis is a well-known artist, but the art market is dead, dead, dead, right now.

    I began to think about my options: I’d have to sell the cottage in West Palm Beach immediately. I’d need to lay off Yolanda. I could cancel the newspaper subscriptions and read everything online. I only needed a cell phone. I’d have to stop taking taxis. And who could highlight my hair for almost no money? And how hard was it to give yourself a really good pedicure?

    Then there is my jewelry. I’ve always collected nice watches and pearls. In the back of my mind I’d think, “Buy good stuff because if you're ever a bag lady, you can sell it.” It might have been a rationalization then—but here I am now: The nightmare may be coming true.

    Before I reached for a bedtime Tylenol PM that night, I Googled the Hemlock Society. I wanted to know a painless way to die. Would you believe the Hemlock Society no longer exists?

    Park Ave. and the Fish Market

    I was brought up in very comfortable circumstances in a Waspy Connecticut suburb. My mother was a descendent of Greek royalty, an intellectual grande dame who wore elegant shaded glasses. But my father, a Greek immigrant, was a product of the Depression. He was a smart, strict Harvard lawyer who had seen bad times. I learned to save pennies from the minute I got an allowance.

    After graduating from Smith, I moved to New York, dreamed of being a painter, but needed money. I began to work at Vogue magazine and was married briefly to a talented industrial designer. We lived right off Park Avenue and had a son. But the chichi uptown lifestyle was not for me.

    My husband and I divorced, and I walked out without a penny. It was the 1970s, I was a feminist, and I would make it on my own.

    I took three jobs to support myself and my son, including cashiering at the fish market, where my new style included rubber boots, overalls, and a wrap-around aprons. I also wrote ad copy for Bloomingdale's, and freelanced for The New York Times magazine.

    We lived in a tiny two-room apartment on West Broadway before it became SoHo, where I slept on a mattress on the floor so my son could have his own room with his toys.

    We lived cheaply and ate a lot of interesting pasta, but I always wanted my surroundings to be beautiful. Our life was more dash than cash.

    In the early 1980s, needing more money, I came up with a book idea: How to Make Love to a Man. My parents told me I’d lost my dignity and didn’t speak to me for nine years. Lawyers have advised me not to speak in specific numbers, but the book sold millions of copies worldwide. Four others followed; all hit The New York Times bestseller list.

    Checks started rolling in. I bought a one-bedroom apartment on Fifth Avenue, the first thing I’d ever owned. A few years later, Si Newhouse offered me a job as editor-in-chief of Self Magazine. I worked there until the mid-1990s, when I left to pursue my art full time.

    The Madoff Connection

    I suddenly had a lot of money. I was in my late 40s, and I felt that I was just too old to have it in a plain old bank account. But I was a creative person, not a savvy investor, so I asked around and talked to my smartest friends with Harvard and Wharton MBAs. There appeared to be a secret society of Madoff investors. A friend who was older, wealthier, and more established somehow got me in. I've always had good luck, and I thought it was another stroke of good fortune to be invested with the legendary Bernard Madoff.

    Every month I got detailed statements, and my money looked to be growing around 9 to 11 percent. It didn't seem greedy because I knew people other people who were making 15 or 20 percent. I thought, “This is just a very smart investor.”

    I never even knew what Madoff looked like. But now I obliterate his face when I see it on television. I think he's a sociopath who said he lost $50 billion for self-aggrandizement, when it was probably closer to the bandied-about number of $17 billion.

    The Studio

    I woke up Friday, the day after the news broke, at 4:46 a.m. in my pretty bedroom. (How much longer will I be able to stay here?) It takes a moment, but then I remember: Ohmygod, something TERRIBLE HAS HAPPENED! For several seconds I can't remember. And then: dear god! I HAVE NOTHING.

    It is too painful to think I will lose my Florida cottage, maybe my studio. This is everything I have worked for.

    I started out life as a painter. Since those days, my dream has been to have a studio to do the work I want to do, to be my own boss, to make the smartest art I can conceive.

    I finally found my studio two years ago: a small SoHo space awash in light and sun and energy and hope.

    I will almost surely have to give it up: It is an amputation I may not be able to bear. Not hearing the click of the key to "AP Studio" room 803 makes my thoughts turn to those sweet almondy cyanide capsules.

    White Shirts and Telling Yolanda

    I wear a classic clean white shirt every day of the week. I have about 40 white shirts. They make me feel fresh and ready to face whatever battles I may be fighting in the studio to get the best out of my work.

    How am I going to iron those shirts so I can still feel like a poor civilized person? Even the no iron ones need touching up.

    Yolanda makes my life work. She comes in three mornings a week, whirlwinds around, and voila! The shirts are ironed, the sheets are changed, the floors are vacuumed. She's worked with me for seven years and is a big part of my life. She needs money. She sends it to her family in Colombia. I have more than affection for Yolanda, I love her as part of my family.

    On Friday, I tell her I have had a disastrous thing happen to me, but I don't have the guts to tell her I cannot keep her with me any longer. I'll wait till Wednesday.

    How Will I Make Money?

    The art market, as everyone pretty much knows, is dead. If I can't sell my work, I am going to have to find some way to make money.

    I’ve lived a great and interesting life. I love beautiful things: high thread count sheets, old china, watches, jewelry, Hermes purses, and Louboutin shoes. I like expensive French milled soap, good wines, and white truffles. I have given extravagant gifts like diamond earrings. I traveled a lot. In this last year, I've been Laos, Cambodia, India, Russia, and Berlin for my first solo art show. Will I ever be able to explore exotic places again?

    Since this happened last Thursday, I have barely left my apartment, I haven't been out for dinner; haven't bought groceries. Can’t remember the last time I ate a full meal. Food, which is one of my most favorite things in the world, has become meaningless. But I look on that as an upside.

    Yesterday, I took my first subway ride in 30 years. Dennis came with me to show me how to get a MetroCard. The world looks very different from a crowded Lexington Avenue No. 6 train.

    Alexandra Penney is an artist, bestselling author, former editor-in-chief of Self Magazine, and originator, with Evelyn Lauder, of the Pink Ribbon for breast cancer awareness. She had a one-person show at Galerie in Berlin in April and her work was shown at Miami’s Art Basel. She lives in New York, has one treasured son in Los Angeles and more amazing friends than could ever be imagined.
    The Bag Lady Papers - The Daily Beast

    Do you feel sorry for her?

  2. #2
    Elite Member Just Kill Me's Avatar
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    Yeah, I feel sorry for her. Everything she worked for is gone but she sounds like she'll manage. Still totally fucking sucks.
    KILLING ME WON'T BRING BACK YOUR GOD DAMNED HONEY!!!!!!!!!!

    Come on, let's have lots of drinks.

    Fuck you all, I'm going viral.

  3. #3
    Elite Member WhoAmI's Avatar
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    It's true, she did work hard for it. She sounds like she has plenty of real estate and jewels. She'll have to sell off, get an ironing lesson from Yolanda, and scale back a little. She'll be fine.

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    Elite Member nwgirl's Avatar
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    I would feel sorry for anyone who lost all their money in a scam like this. Unless it was a really obvious one, like those ones where you triple your money in 30 days, I think people deserve sympathy. She had her money with this guy for years apparently, and didn't have any reason to believe it wasn't legit.
    "The difference between genius and stupidity is that genius has its limits."

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    Elite Member kingcap72's Avatar
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    I feel bad for people who lose their life savings. But I never understood why anyone would just hand over their entire life savings to somebody else. Doesn't make sense.

    I heard on the news that this retired couple in Florida had saved up about a million dollars for their retirement and handed it over to Madoff. If you've saved up a million dollars to retire on why be dumb enough to hand it over to anybody?

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    Elite Member B.C.'s Avatar
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    The old saying don't put all your eggs in one basket comes to mind. I do feel bad for this lady, she worked hard to get what she had only to lose it to a con artist.

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    Elite Member B.C.'s Avatar
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    NY investor who invested in Madoff is found dead

    NEW YORK – He was a distinguished investor who traced his lineage to the French aristocracy, hobnobbed with members of European high society and sailed around the world on fancy yachts.

    But after losing more than $1 billion of his clients' money to Bernard Madoff, Rene-Thierry Magon de la Villehuchet had enough. He locked the door of his Madison Avenue office and apparently swallowed sleeping pills and slashed his wrists with a box cutter, police said.
    A security guard found his body Tuesday morning, next to a garbage can placed to catch the blood.

    The bloody scene marked a grisly turn in the Madoff scandal in which money managers and investors were ensnared in an alleged $50 billion Ponzi scheme. De la Villehuchet is believed to have lost about $1.4 billion to Madoff.

    No suicide note was found, said NYPD spokesman Paul Browne.
    Ellen Borakove, spokeswoman for the city medical examiner, said the autopsy on de la Villehuchet had been completed Wednesday. She said the medical examiner was awaiting toxicology reports before determining the cause of death.

    The suicide came as the number of Madoff victims grew. New York University said in a lawsuit filed Tuesday that it believes it lost $24 million in the scheme through an investment with money manager J. Ezra Merkin.

    De la Villehuchet, 65, was an esteemed financier who tapped his upper-crust European connections to attract clients. It was not immediately clear how he knew Madoff or who his clients were.
    He grew increasingly subdued after the Madoff scandal broke, drawing suspicion among janitors at his office Monday night when he demanded that they be out of there by 7 p.m.

    A partner in the firm asked a security guard later in the evening to check and see if De La Villehuchet was still there, but the door was locked, Police Commissioner Raymond Kelly said.
    When a guard came into the 22nd-story office suite the next morning, less than 13 hours later, the Frenchman was dead, Browne said. There were several cuts "to his arm, to his wrist and also to his bicep area," Kelly said.

    His death came as swindled investors began looking for ways to recoup their losses. Funds that lost big to Madoff are also facing investor lawsuits and backlash for failing to properly vet Madoff and overlooking red flags that could have steered them away. It's not immediately known what kind of scrutiny de la Villehuchet was facing over his losses.

    De la Villehuchet (pronounced veel-ou-SHAY) comes from rich French lineage, with the Magon part of his name referring to one of France's most powerful families. The Magon name is even listed on the Arc de Triomphe in Paris, a monument commissioned by Napoleon in 1806.
    "He's irreproachable," said Bill Rapavy, who was Access International's chief operating officer before founding his own firm in 2007.

    De la Villehuchet's firm enlisted intermediaries with links to wealthy Europeans to garner investors. Among them was Philippe Junot, a French businessman and friend who is the former husband of Princess Caroline of Monaco, and Prince Michel of Yugoslavia.
    De la Villehuchet, the former chairman and chief executive of Credit Lyonnais Securities USA, was also known as a keen sailor who regularly participated in regattas and was a member of the New York Yacht Club.

    He lived in an affluent suburb in Westchester County with his wife, Claudine. They have no children. There was no answer Tuesday at the family's two-story house. Phone calls to the home and de la Villehuchet's office went unanswered.

    Guy Gurney, a British photographer living in Connecticut, was friends with de la Villehuchet. The two often sailed together and competed in a regatta in France in November.

    "He was a very honorable man," Gurney said. "He was extraordinarily generous. He was an aristocrat but not a snob. He was a real person. When he was sailing, he was one of the boys."
    The two were supposed to have dinner last Friday but Gurney called the day before to cancel because of the weather. But during the call, de la Villehuchet revealed he had been ensnared in Madoff scandal.
    "He sounded very subdued," Gurney said.

    Gurney said de la Villehuchet was happily married to his wife. "I can't imagine what it's like for her now," he said.

    NY investor who invested in Madoff is found dead - Yahoo! News

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