(Reuters) - Abby Frucht's parents lost their $1 million in life's savings with the collapse of Bernard L. Madoff Investment Securities LLC Her parents lived off the money in a retirement home in Sante Fe, New Mexico. Reuters spoke with Frucht. Below are excerpts from the interview.
My dad is 85 and my mom is 79. We don't know how long they can stay there. We're working that out now. We're waiting to see what happens with SIPC (the Securities Investor Protection Corporation, which maintains a reserve fund authorized by Congress to help investors at failed brokerage firms). It's remotely possible that we will get some money back and we will keep them in their assisted living facility for as long as we possibly can. My sisters and I have power of attorney over them so we have been putting our heads together to try and find a way to keep our parents comfortable.
They have a couple of months where they have some cash in a checking account. But that's not very much money. We're sort of doing two things at once. We're looking at what our options might be to try and keep them where they are. But we are also waiting with our fingers crossed for some word from the SIPC.
They are very elderly they can't possibly go back to work. They are very comfortable and happy where they are. They both have health issues. And they've made friends there. That's where they have live for about 15 years. It may have been longer than that. They retired there.
My dad was a doctor on Long Island before he retired. A friend of his introduced him to Madoff. Unfortunately, it went on from there. The reason it's so surreal is that my parents have been using this money to support themselves and not living high off the hog. They have had a serene and comfortable retirement. And they have also managed to take care of the family. I have two sisters and their four grandchildren. They would take everyone on little trips now and then. We went to California six years ago. We had nice dinners and a lot of fun. Looking back on that kind of thing, it's surreal to imagine that money that we were using to fund those trips was basically monopoly money.
In a way I feel fortunate that this happened now rather than 10 or 15 years ago when my parents were still useful, and they would have really suffered the loss of their money.
Right now, they live a very sedate life. Basically my mom reads the paper all day and my dad is in the early stages of Alzheimer's. It's difficult to know even how much he realizes what's happening and that's a blessing. I think he would be really hurt by it. He was very proud at the fact that he had managed to save up some money and look after himself and my mom so well and help out with our kids when we needed it, which wasn't that often. But there were times when he did -- for education expenses, medical expenses, things like that. So I think it's a good thing he's at the stage he's in now rather than having him be at the stage he was six years ago when he really would have been much more devastated by the news than he is now.
But what hurts too is that he was a really good man, my dad. He did everything that he felt he was supposed to do to provide for his family in a respectable way. And he trusted Bernard Madoff. To think that all those years back he was being lied to. Not only lied to, but robbed. And not only robbed, being inadvertently forced to participate in an illegal activity, which my dad never ever would have either imagined or condoned.
It's been a fairly harrowing experience for me and my sisters.
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Ian Thiermann, age 90, has abandoned retirement and now works the aisles of a grocery store to make ends meet after losing his life savings of $750,000 to Madoff. He now hands out fliers hawking avocados and pork ribs at a supermarket in Ben Lomond, California. Thiermann, owner of a pest-control company in Los Angeles before retiring 25 years ago, enjoyed returns of 10 to 12 percent each year on his savings for about 15 years regardless of whether markets rose or fell. He lived on those returns, devoting much time to nonprofit work.
We didn't even realize we were a part of it.
A very close friend said that he and his family had been involved in an investment for the previous 30 years - 30 years, you understand. And they received the same amount, it wasn't a great amount but on average about 10 percent, over the years, even in the crashes that had taken place. They were never been affected by the crashes.
He said there's an opportunity to get into this thing. And we could form a partnership and so forth and get into it. We knew him very, very well. A number of us we're trying to be thoughtful of our own investments. Here's a guy and his family who has been in it for the last 30 years.
We had been in it for about 15 years. And in the last recession in the 1990s, we just received the same amount, about 8 to 10 percent, and we were extremely pleased. It didn't affect us at all. And then suddenly, when the crash took place and so forth, I called our friend and said this sounds really serious, can we get out and put it in something else. He said ‘that's a good idea'. So he did. We got word back that everything had been put into Treasury bonds. That's what he thought. He was dealing with this guy Madoff for all those years. And he had confidence in him.
He called us around December 15 and said ‘I've lost everything and you have lost everything'.
We had borrowed on the houses and we paid 5 percent on the mortgage and we were getting 10 to 12 percent, it was an additional income. So we don't have any cash reserves. And we still owe on the houses of course. That in a nutshell is what happened.
We're in a very small town in California. We were in a family-run grocery store. A very, very good store. We happened to be in this store about the time we learned of this crash. I guess we didn't look quite as happy as we usually are. And the store manager who we know very well said, ‘What's wrong?' We said, Have you heard about this Madoff?'. And he said, ‘Oh my god', pardon me, and then he told me to call on January 1 and that he might have something for me. So he did. I now work there as a beginner and I deeply appreciate it. While we are getting our social security still, if that fails then this country is going to be facing problems.
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