Jul 20, 2009
Making a Kiddush Hashem
Here is an inspiring story about a man who gave of his own money to cover hsi employees losses from investing their retirement funds with Bernie Madoff. Robert Lappin gave $5 million of his own money to recover their losses.
This week, Lappin honored a promise. He and his family donated $5 million to restore the retirement savings of about 60 employees of various family enterprises, including the Robert I. Lappin Charitable Foundation. The charity was almost wiped out when the Ponzi scheme run by Bernard Madoff collapsed. Lappin and his family had invested all of their employees’ 401(k) retirement plans with Madoff more than a decade ago.
“I am absolutely thrilled,’’ said Amy Powell, a former publicist for the foundation and one of the employees whose savings were restored. “I really knew in my heart, all my heart, that Mr. Lappin would do all he could do for his em ployees.’’
Lappin had invested so heavily with Madoff that it cost him much of his personal fortune. The foundation lost $8 million when Madoff’s assets were frozen last December, and for a time was forced to shut its doors. Lappin said that now, after Madoff and the payment to employees, his personal net worth is less than $5 million, about a tenth of what it was before the scandal broke.
Yet giving his own money to the employees was simply the right thing to do, he said. “At least from the feedback, they feel very grateful and happy, which makes me feel very happy,’’ said Lappin. “So far no kisses, but I have had some hugs.’’
Although “I didn’t invest all of our money with Madoff,’’ said Lappin. “I did invest all of the 401(k) plan’s money and all of my charitable foundation’s money with Madoff.’’
Until the scandal broke, Lappin did not suspect anything was wrong with Madoff, who Lappin “used to see every now and then’’ and who was well-regarded in the community they shared. “The last thing I would’ve expected, particularly after eight SEC inspections of Madoff’s operation, is that he would be a fraud,’’ Lappin said. “I just trusted him as an outstanding person - we thought - as a Jewish person, as a businessman, and as a philanthropist.’’
Peter Lappin said the decision to replace the employees’ losses was immediate, and that he, his brother, and his sister all supported their father’s wishes. “You know what? The opportunity to build the wealth back will refund us,’’ he said. “We’ll recover to some extent over time.’’
Lappin said he couldn’t turn his back on his employees. Some had been with him for almost 51 years, as long as he’s owned Shetland Properties.