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Madoff fraud forces Lappin foundation to close

December 12, 2008

The securities fraud of Bernard Madoff forced a Jewish foundation in Massachusetts to close.

Madoff, the founder of Bernard L. Madoff Investment Securities LLC, was arrested Dec. 11 after admitting to his board that a hedge fund he ran was essentially a $50 billion fraudulent scheme.

The Robert I. Lappin Foundation in Salem laid off all its employees and locked its doors the next day after its benefactor’s assets were frozen because they were invested with Madoff.

“Mr. Lappin investments were frozen,” the foundation’s executive director, Deborah Coltin, told JTA. “The assets are frozen. We have no money. The foundation cannot access its money.”

Lappin told JTA on Dec. 12 that he lost $8 million -- all of his foundation’s money -- because it was invested with Madoff. Lappin, who had been involved financially with Madoff since 1991, also said he took a “significant” hit personally. He said he knew nothing of Madoff’s fraudulent activities.

The foundation, which gave about $1.5 million per year to Jewish causes, let go all its workers, one full-time employee and six part-timers.

 

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