Underneath, however, was one of the most high-handed scams in Wall Street history. Most Ponzi schemers invest at least some of the money in stocks, llama herds or whatever they're pushing. But at least for the last 13 years, a court-appointed trustee said last month, Madoff invested in nothing but lavish homes and furnishings for himself.
Ferber, 50, joined other Madoff investors in horrible disbelief when he picked up The Wall Street Journal on Dec. 12 to read that Madoff had been arrested and accused of huge theft.
"I was a little bit sick about it," he said. "The story basically said it was all a fraud and a Ponzi scheme. You don't have to read that far to realize that in all probability it's a lost cause."
The shock increased when he learned that a second fund he owned had also invested with Madoff. Then trustees started talking about "clawing back" money from Madoff investors who had withdrawn funds before the fraud was exposed. ("You got somebody else's money," trustee lawyer David Sheehan told these folks at a hearing last month, according to the Associated Press.)
Ferber had taken out funds - but only to pay taxes.
The IRS, in fact, is the big winner in the Madoff mess. It collected what are probably billions in taxes paid on nonexistent Madoff profits. Individual taxpayers can amend returns going back three years, but beyond that they're out of luck "unless Congress changes the law," says Harry D. Shapiro, head of the tax practice at Saul Ewing.
So it's a double outrage: Madoff investors might be dunned for withdrawals they used to pay taxes. But they can't get the money back from the government.
Ferber worries about the numerous Madoff-investing retirees who, unlike him, don't have time to make up for lost assets.
"Those people don't have a way to actually make money in the future," he said. "And if the trustee were to come after them for their withdrawals, they cannot be sleeping at night."
He's angry that regulators ignored warnings about Madoff. His non-Madoff investments are down. His company, CargoTel, is tied to auto sales and suffering from the slump.
The Ferber family is cutting "junk spending" and tabulating its nonfinancial fortune.
"At the end of the day, it is only money," he said. "We could have cancer. One of the kids could get hit by a car. There are many, many worse things that could happen, and some of them happen to people every day."
The Madoff blow, however, still stings.
"Each year, I was at least thinking I was making this Madoff income," he said. "But I'm not. So I have to understand that that income is not there any longer."
That's a motto for all Madoff victims these days. And, in a larger sense, for America, too.
