Daniel Goldenson, a publisher and conservationist who has preserved hundreds of acres of coastal land in Bremen from development, found out while surfing the Web earlier this month that he and his wife had lost more than half their assets to the Bernard Madoff Ponzi scheme.
Goldenson said he had no idea the money he had invested for his retirement in the Ascot Fund was in turn invested with Bernard L. Madoff Investment Securities, Madoff's failed firm.
"I didn't expect it," said Goldenson.
Now Goldenson is out $2.5 million and will have to cut back on the charitable work he has been doing in Maine, he said. He also is trying to win a voice for himself and other indirect victims caught up in the federal civil case against Madoff, who is accused of operating a $50 billion scheme that duped hundreds of individuals, institutions and philanthropic groups.
Last week, Goldenson wrote a letter to U.S. District Judge Louis L. Stanton urging him to extend the same protections available to direct investors in failed Wall Street firms to people who, while less directly involved, were equally harmed.
Stanton responded in a letter made public Monday, saying he might be willing to consider the matter.
The criminal case against Madoff for securities fraud grew out of his confession to his sons Dec. 10 that he had been operating a Ponzi scheme for years -- paying out returns to some investors out of the principals paid by new investors, rather than from an actual profit, authorities said.
So far, it appears that Goldenson is the only Mainer to have taken a personal financial loss in the scandal, but the case could have ripple effects in the state's charitable community.
Janet Henry, president of the Maine Philanthropy Center, said she has not been able to identify any Maine charitable foundations that were invested with Madoff. But there could be an impact from large out-of-state foundations, such as the $1 billion Picower Foundation, which announced that it was shutting down because of losses in the scandal. That foundation funded medical research and other projects across the country.
"It seems we are all two degrees of separation from the Picower Foundation," Henry said.
It appears Maine's colleges and universities were unscathed. Tufts University and New York Law School lost $20 million each as investors in the Ascot Fund.
In his letter to Stanton, Goldenson asked that the same protections available to direct investors in Madoff's brokerage firm be extended to investors in the feeder firms such as Ascot Partners, which operated the Ascot Fund.
Many of the direct investors in Madoff's firm might be covered by the Securities Investor Protection Corp., a federal fund that covers fraud losses from failed Wall Street firms.
"We are truly all in the same boat, and access to the $500,000 insurance would go a long way to help people like ourselves restore our lives, often on the doorstep of retirement," Goldenson wrote in his letter to Stanton.
Goldenson said he entered the Ascot Fund in 2001, on the advice of the former vice chairman of Merrill Lynch, John J. Steffens. All of Goldenson's investments in the fund came from Merrill Lynch or Smith Barney and were wired from Goldenson's regular account and IRA accounts to Morgan Stanley & Co. for the benefit of the Ascot Fund, headed by Ezra Merkin, a close friend of Madoff's.
"All his money, we learned this week, went out the back door to Mr. Madoff," he wrote in his letter to Stanton.
Just weeks ago, Goldenson launched a new online business, Starting Out Inc., in Damariscotta. It offers state-by-state career and life-management resources for young people.
Goldenson said he intends to put part of the proceeds into a fund to benefit young Mainers, but with his financial setback, that might take longer than he had hoped.
"The point of all this is that so many people who are...
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