Madoff with the Money (37 page)

Spielberg's and Jeffrey Katzenberg's Wunderkind Foundation suffered some losses. Former baseball great Sandy Koufax, the Hall of Fame pitcher, was listed among the Madoff victims, as were the actor John Malkovich and the estate of John Denver. The Hollywood screenwriter and Madoff investor Eric Roth, who had won a Golden Globe for
The Curious Case of Benjamin Button
, told the
Los Angeles Times
, “I'm the biggest sucker who ever walked the face of the earth.”

In her 90s and confined to a wheelchair after having suffered strokes, the famous-for-being-famous Hungarian-born Gabor sister, Zsa Zsa, and her ninth husband, 65-year-old Prince Frederic von Anhalt, lost practically all they had salted away for their old age through a feeder fund that placed celebrity money with Madoff.

Von Anhalt says that he had been personally advised to meet with a representative of the fund by Zsa Zsa's close friend Merv Griffin, the billionaire creator of
Wheel of Fortune
and
Jeopardy
. Griffin, a one-time popular TV talk show host who made a fortune in everything from hotels to casinos to real estate development, died at 82 in August 2007.

“We lost about $10 million,” says von Anhalt, speaking from a cell phone in his Rolls-Royce outside the Beverly Hills mansion Zsa Zsa bought with the proceeds from her divorce years earlier from the hotel baron Conrad Hilton, the late great-grandfather of party girl Paris Hilton. “We invested in a California company and they in turn invested in Madoff. We didn't know anything about Madoff—never met him, never heard of him. Nothing.”

Von Anhalt says he was having lunch with Griffin at the trendy Café Roma in Beverly Hills and mentioned that he and Zsa Zsa wanted to invest some money and get a decent return.

There was no problem for about five years, the length of time the money was locked in. Von Anhalt continues,

He made the request for the money but it was not forthcoming. When he questioned why, he says he was told, “We're having a problem. It's going to take a little longer.” All of a sudden everything was blocked. “I called my lawyer, and then I heard about Madoff and I was told that's why I wasn't getting the money. So I said, ‘I don't give a shit about Madoff. I invested in you.'”

Six weeks later Bernie was arrested, and the money was lost.

Von Anhalt said he and Zsa Zsa might be forced to sell their house “if we don't get money flow. I don't know what's going to happen. We're in a big hole. We have big overhead. We may have to take things to a pawnbroker, but I don't want to think about that.”

He said the investment was a mix of Zsa Zsa's money and his.

He said that if he had an opportunity to meet with Madoff he wouldn't say anything to him.

“I would take a baseball bat and hit him over the head.”

John Robbins and Bernie Madoff were as different as chopped liver and tofu.

While Bernie was considered a Wall Street guru before his Ponzi scheme caught up with him, Robbins became a guru of the vegetarian movement. He had everything growing up that Bernie didn't have—enormous wealth and luxury, all of which he later turned his back on.

His father was Irvine Robbins, the son of Polish and Russian immigrants, who took a $6,000 bar mitzvah gift and parlayed it into what became the Baskin-Robbins ice cream chain, with more than 1,600 stores throughout the United States, Canada, Japan, and Belgium. Along with his brother-in-law, Burton Baskin, the two entrepreneurs conceived such offbeat flavors as Pink Bubblegum and Daiquiri Ice. Their logo, a cherry and chocolate sign along with the “31 Flavors” concept—one flavor for each day of the month—became a pop culture icon and a symbol for a great American dessert treat. The two men became extremely wealthy.

In John Robbins' home growing up in Encino, California, the swimming pool was shaped like an ice cream cone, and inside the spectacular Robbins manse was, naturally, a soda fountain that offered guests all 31 flavors. Everything was ice cream-related, even the family yacht that was christened
The 32nd Flavor
. Each and every day, John's father ate three or four scoops of ice cream. He lived to be 90, but had developed diabetes. He died in May 2008.

But John Robbins long before had turned his back on the family fortune and how it was made. In his early 20s, when his father hoped he'd take over the Baskin-Robbins empire, he expressed his negative feelings about the effects on health of eating dairy products, and about the materialistic world he saw growing up. He detested ice cream and felt it caused illnesses such as diabetes. In 1967, an uncle died of a heart attack. He believed the uncle's death and his father's diabetic condition were caused by consuming too much of the family's 31 flavors.

He believed in natural foods and the vegetarian lifestyle. “I didn't want to sell a product that hurts people's health. I made a choice for integrity.”

In 1987 he wrote a best seller called
Diet for a New America
, an expose that targeted the fast-food, junk-food industry. One of his later books,
The Food Revolution
, dealt with environmentalism and food consciousness.

To some, he lived a Spartan, almost hippie-like existence in Soquel, California, in the Santa Cruz Mountains, with his wife, Deo; son, Ocean; daughter-in-law, Michelle; and twin grandsons, River and Bodhi, who had disabilities. He sought a simple but honest lifestyle. Unlike his boyhood home, his own house, including three offices, operated on self-generated solar energy and encompassed eight rugged acres.

Still, Robbins was entrepreneurial like his father. He was the leader of a movement and his books sold almost as well as ice cream cones, and he didn't despise money. A guest appearance on
Oprah
gave him national recognition and enormous book sales.

Robbins started investing in Madoff through a friend and attorney he trusted in Marin County, California, Richard Glantz. Like so many others, he received steady and favorable returns. While capitalism wasn't part of his lifestyle, he didn't feel he was violating any of his principles, and eventually put all of his book royalty earnings and speaking fees, which were substantial, into Madoff through the lawyer's feeder fund. Robbins knew others who had similarly invested—many of them were enormously wealthy—so he felt his money was in good hands.

When the 61-year-old vegetarian author's name showed up on the list of Madoff victims—he lost his entire life savings of more than $1 million, 98 percent of his family's net worth—the vegetarian movement took action and began a fund-raising drive for Robbins and his family. They were so financially devastated by Bernie's Ponzi scheme that Robbins and his wife were forced to take in tenants, and she had to work part-time jobs.

“I don't see us as a charity case,” he told a local newspaper.“There are people who are in worse straits. I appreciate the love that is coming to us.”

As for Bernie, Robbins declared, “This wasn't a bad investment. This was a theft, a criminal action.”

Richard Glantz, the 64-year-old trusted lawyer to whom Robbins had given his money for investment, told the author he created a Madoff feeder fund because:

Glantz is one of the few Bernie feeder funders who has spoken out about his dealings through the years with Madoff.

Asked whether he ever questioned the steady and continual returns in good and bad economic times, and whether he saw such returns as a red flag of a possible scam, Glantz says that when he asked Madoff about what was going on he got all kinds of complex answers, gobbledygook about split strike conversions that Bernie claimed was his strategy, one that few understood.

Glantz had personally invested with Bernie, too, he says.

Glantz had learned about Bernie from his now-deceased accountant father, Edward Glantz, who had a long, complex history with Madoff. The senior Glantz along with his then accounting partner, Steve Mendelow, were feeders for another Madoff feeder fund, the one run by Frank Avellino and Michael Bienes. Glantz and Mendelow had offices on the same floor as Avellino & Bienes in a New York office building and, according to an SEC complaint, collected $89 million in investor money for Avellino & Bienes that was then funneled to Bernie Madoff. All of that ended when the SEC shut down the Avellino & Bienes firm in 1992.

“My father told me what he was doing,” says Glantz, “and I was skeptical. But after I watched him invest with Bernie with our family money, I decided I'd do it also—you know, the guy was head of Nasdaq, he had a high rating as a wholesale dealer, and a wholesale dealer is an insider.”

In 1988, John Robbins had started an international nonprofit organization called EarthSave to promote healthy, environmentally sound food choices and to raise awareness of “the ecological destruction and cruelty linked to the production of food animals.” The organization's headquarters were in New York, and each year it held a vegetarian food festival called “Taste of Health.”