Thanks to Lincoln for passing this along.
It isn’t a Brooklyn boy but, rather, a son of Queens who now threatens to undo Fred Wilpon’s life’s work: Bernard Madoff. Wilpon and Madoff had much in common. Wilpon is just a year and a half older than Madoff, and both grew up as outer-borough strivers. Three decades ago, when they met, the two men were already rich and respected beyond their youthful dreams; both were poised to become leaders in their fields. Sterling Equities, Wilpon’s company, became a national power in real-estate development, and also acquired interests in biotech, cable television, and, of course, baseball. Bernard L. Madoff Investment Securities, L.L.C., developed a pioneering electronic stock-trading operation, and Madoff himself operated a separate money-management business, which he made available to a select group of investors. Fred and his wife, Judy, and Bernie and Ruth Madoff became friends, if not intimates, sharing occasional trips and dinners a few times a year. Both families had vacation houses in Palm Beach, and they enjoyed a landmark night at the movies there. “It was the first time I ever got in as a senior citizen,” Wilpon recalled. “We were going to meet them at the movie theatre in West Palm. And I remember going to the booth to buy the tickets. And Bernie was of senior-citizen age at that time, too, but I didn’t think Ruth was. So I bought three senior citizens and one regular, and we laughed about it.”
Mostly, though, the relationship was about business. Starting in the mid-eighties, Wilpon, along with his partners, his family, and his friends, began sending money to Madoff to manage. The returns were not spectacular, but they were steady; indeed, that was the core of Madoff’s appeal. In bull and bear markets, Madoff returned about ten per cent a year to Wilpon. He and his partners used Madoff as a bank, sending spare cash Madoff’s way until it was needed for investments or to make a payroll. Sterling employed an accountant whose responsibilities included managing the many accounts that the firm and its partners and associates had with Madoff. The investments took place automatically, without any specific orders from the Sterling partners.
The Wilpon stake with Madoff grew to be enormous. There were eventually some four hundred and eighty Sterling-related accounts with the firm: three hundred or so belonged to Wilpon, his partners in Sterling, and their family members, trusts, and charities; the other accounts were owned by close friends, employees, and business associates. In all, the Sterling cluster was one of the largest groups of Madoff investors. On December 11, 2008, the day that Madoff’s money-management business was revealed to be the largest Ponzi scheme in American history, Wilpon and his partners’ stake was listed at five hundred and fifty million dollars. On that one day, it all vanished.