Linda Alexander isn't a lawyer, doctor or hedge fund manager.
She's a 62-year-old telephone operator who lives in Bridgeport and makes less than $480 a week. Yet she — like a lot of lawyers, doctors and hedge fund managers — says she fell victim to New York investor Bernard L. Madoff, losing her entire, if meager, retirement savings.
Alexander works for the Orthopedic Specialty Group in Fairfield, whose entire pool of retirement savings was invested with Madoff. One of the doctors, Henry Backe, spoke at a forum Friday called by the legislature's banks committee to hear about the effects of Madoff's alleged $50 billion investment scheme.
Alexander couldn't make the hearing. She was working.
"These 140 participants [in the medical group's retirement fund] aren't wealthy investors," said Backe, who says he personally lost 17 years worth of retirement savings to Madoff. "They are regular, working-class Americans — most of modest means — who annually put aside a substantial percentage of their wages to try to ensure that they could enjoy a dignified retirement in the near or distant future."
Retirement will now come later for Alexander, who lives paycheck-to-paycheck in a Bridgeport apartment with her 66-year-old husband. He receives Social Security checks, but never thought to set aside money for retirement as he was laying out marble tile.Alexander, who was planning to retire in four years, had been banking on her $10,000 investment with Madoff. It may not be much of a nest egg to a doctor, but she described it Friday as a "pretty good amount."
State Sen. Bob Duff, D-Norwalk, co-chairman of the banks committee, said he called Friday's forum at the Legislative Office Building in Hartford an effort to "understand how this happened and what recourse we may have to help those affected and to ensure these situations don't happen again."
Duff said the committee is considering legislation for regulating hedge funds, and that the testimony provided Friday by people who say they have been victimized by Madoff could result in expanding the scope of the bills.
Fairfield First Selectman Ken Flatto told the forum about the town's "anguish" over losing an estimated $40 million in pension money. Flatto offered some suggestions to the committee: Ban investment advisers from having any financial or legal interest in the funds they manage and recommend to clients, enforce stronger standards for registering as an investment adviser in the state, and establish routine state review of large-scale funds and their managers.
Flatto said town officials are still "reeling" over the news that broke Dec. 11, when he and other local officials found out that 15 percent of the town's pension assets had disappeared. The town had been investing its pension funds with two companies and had been told that the investments were "very conservative," he said.
"Imagine the surprise and shock when we woke up to learn this man was arrested and then to learn from the manager in charge of our fund that everything she had was under the jurisdiction of this individual and had apparently disappeared," he told legislators. "It was incredible. It was a shock."
Fairfield police are investigating the matter, and the town may become the first in the nation to seek Madoff's arrest, town officials said. Fairfield also filed a lawsuit Thursday against its pension adviser and auditor over losses it attributes to Madoff.
The Orthopedic Specialty Group, which decided in 1992 to invest all of its 140 employees' retirement assets — including employee and company contributions — in Madoff's funds has so far not filed suit. The office is instead focusing its efforts on getting relief from the federal government.
"I've spent numerous hours, nights and days, dealing with this tragedy rather than taking care of patients or spending time with my family," Backe said, estimating that the group has spent about $90,000 in legal fees on Madoff-related matters.
Three senior employees at the office who were close to retirement have been forced to continue working, Backe said. One 70-year-old doctor was planning to retire within six months after 40 years with the practice but has decided to continue working a full schedule for an undetermined amount of time, Backe said.
Backe urged legislators to support stronger federal oversight and more federal relief for those whose pensions were affected by the Madoff scandal. He described Madoff as an "economic terrorist" who ruined people's trust in pension plans, which he said will eventually "kill our economy."
After Backe's testimony, state Rep. William Hamzy, R- Plymouth, asked him, "How do you not camp out at this guy's apartment, just waiting to strangle him?"
Backe replied: "I don't have time to get mad at Madoff. Frankly, I just want him to come out and tell us where the money is."
Mad At Madoff