Posted by
Ed Lilly on Saturday, December 20, 2008 6:37:41 PM
With all the craziness of work, 2 small kids, getting ready for Christmas, and all those things entail, I had not done much more than read the headlines on the Madoff ponzi scheme scandal. Today, in between a couple of continuing education classes in beautiful Plymouth Meeting, PA (actually, the Double Tree was very nice), I had a chance to read through some of the Weekend Wall Street Journal's stories. Specifically, I read the article featuring the situation of Burt Ross, former mayor of Fort Lee, NJ. [I went to create a link to the story, but apparently it's behind the subscriber wall, so I won't link to it - sorry.]
I have sympathy for Mr. Ross, his family, and all those who were apparently bilked by Madoff and potentially others. But I found myself having questions about what Ross has been doing with his finances when I read through it.
From the story, we learn that the Ross's have lived in their Victorian home in NJ for 33 years. Ross went to work in 1965 as a stockbroker, was elected mayor of Fort Lee in 1971, and in 1975 he quit the brokerage business to run a commercial real-estate company. The story describes Ross's assets as being "tied up in 13 commercial buildings he owned and managed." Then in 2003 "he decided to sell 11 of the buildings to invest the proceeds of more than $5 million."
Later, we get a reference to Ross having planned on using the funds invested with Madoff as a source of funds to draw on to pay down the mortgage on his home, and that he hopes that they won't have to move out of their Englewood, NJ, home.
Ok, we do get information on the fact that Ross apparently has a $50,000 per year cost for property taxes and expenses for the home, so maybe that's what's driving the concern. But it's a little cryptic on whether there's apparently mortgage payments as part of this number.
I'm just surprised that, after 33 years, and the apparent financial success the guy was having, that there would still be any significant mortgage on his home.
I realize property taxes in NJ are ridiculous, and I probably don't even want to know how high they are in Englewood as opposed to our own pricey little village of Lawrenceville, but I would have expected that the danger of having to move, given the overall picture painted, would be pretty remote.
Very strange, and very sad.
One other part of the story that caught my interest, and I'll be curious to see how it plays out with other Madoff investors, was a reference to Ross looking into the issue of refunds on taxes paid on the Madoff investments. Should be very interesting to see how that all plays out if everybody was paying taxes on income that didn't exist.
What a mess.