Lester Miller drops about $100,000 at auction of some of Madoff possessions
LES LIKELY: The closest our town might come to having a Bernard Madoff-like character is Lester Miller. Not the swindling part, but the big-spending, larger-than-life part.
So it’s only fitting that Miller, owner of Lester’s Sports Bar and Grill and the second-time-around-defunct Busch’s Grove, whose fortunes came from a plastics manufacturing company called Contico International, should turn
up Saturday at a government auction at the Sheraton New York Hotel and Towers in Midtown Manhattan of some of Madoff’s possessions.
According to the New York Times, Miller, 77, who was identified as a “businessman from St. Louis,” spent about $100,000 at the sale.
He bought about 20 bracelets that belonged to Madoff’s wife, Ruth Madoff. One that was described was a gold charm bracelet with a whale, a lighthouse and a shell that had a maximum listed value of $1,000. After about a minuted of spirited bidding, Miller reportedly bought it for $3,500.
Miller told the Times reporter that he would divide the bracelets among his daughters and granddaughters on a cruise to Mexico next weekend. Miller said he had never met Madoff but knew several people in Palm Beach who had lost money in his bogus investments.
Miller added that he was pleased to help those people. “I think it’s a nice thing,” he said. “The more you can bid, the better off you are.”
Asked what he would tell his granddaughters when he gave them the bracelets, Miller answered, “If it’s too good to be true, it’s not right.”
Proceeds from the sale were to go to a fund set up to pay restitution to people who were swindled by Madoff. The Times reported that a spokesman for the Marshals Service said the sale raised about $1 million.
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The Truth of the Matter
The auctions brought in more money than originally expected. The penthouse sold for a pretty penny. The yachts have floated in a few additional millions to be added to the Madoff pot.
So, the investors will soon reap the benefits of all this transference of money, right? WRONG.
Thanks to the secure financial situation of SIPC trustee Irving Picard, his PR firm has been successful in keeping its client’s actions in the news. However, like any well paid employee-the firm’s loyalty lies with the trustee and thus may be instructed to tell the public their version of reality.
Let me explain…The news feeds report that the money collected from the above sales will go directly to the investors. This is a very simplistic description that eliminates describing the fact as to how these funds will actually be distributed and to whom.
SIPC was created by Congress to instill investor confidence in the financial markets after the 60’s, when American’s were afraid to invest due to rampant fraud in the markets. Congress’ intent was to create SIPC so they would be able to pay investors an advance of money collected from fraudulent brokers while the bankruptcy proceedings were underway. This, to ensure that innocent investors would be able to survive financially while waiting for their funds to be recovered. So, if it’s decided that an investor is not entitled to that advance, than they would not be entitled to the money recovered through the bankruptcy.
Irving Picard, as trustee assigned by SIPC to the Madoff fraud, has decided that he will disallow more than half of the investors’ claims due to his unsupported interpretation of the SIPC rules. He has decided (contrary to past history of how SIPC pays investors) that the money they were told (by the SEC, FINRA, the IRS and SIPC) they had really didn’t exist. However, that is EXACTLY the purpose of SIPC-to ensure investors that if they invested with a fraudulent broker they would be able to recover the monies they were told they had in their accounts. This money, by the way, comes from the other (legitimate) brokers who are members of SIPC-not the US taxpayers, or any government agency.
So, when you read that the money collected at auctions, at liquidation sales and from co-conspirators in the Madoff case goes to the victims, please be aware that this not truly the case-only those victims that Mr. Picard decides are eligible for SIPC coverage will benefit. The thousands of others who believed in Congress’ effort to protect the investor will get nothing.
This, we fear, may hold true for all American investors who feel they are protected in their investments.