A case study of a Madoff victim: Alexandra Penney

This is a well written interesting study of one of Bernard Madoff's victims. As the case shows not all his clients were rich. Many Jewish charities lost money as well.

<http://www.thedailybeast.com/blogs-and-stories/2008-12-17/the-bag-lady-papers/1>The Bag Lady Papers
by Alexandra PenneyDecember 17, 2008 7:42am

Alexandra Penney—a NY 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 twenties, and later, writing bestselling sex books.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 thirty 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-thirties 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 that 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 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 cellphone. 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 MarketI 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 Bloomingdales, 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, 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 Ave., 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 ConnectionI suddenly had a lot of money. I was in my late forties, 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%. It didn't seem greedy because I knew people other people who were making 15 or 20%. 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 bucks for self aggrandizement, when it was probably closer to the bandied about number of $17 billion.The StudioI 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 YolandaI 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 til 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 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 number 6 train.Alexandra Penney is an artist, best-selling 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.