Madoff's Man

Until recently, millionaire philanthropist Michael Bienes was the toast of South Florida, a man who threw lavish parties and fundraisers at his $7 million estate on the Intracoastal Waterway, where he seemed a mixture of Gatsby and Meyer Wolfsheim. Now sources say he is a ruined man, so anguished that family and friends are concerned he might take his own life.

The 72-year-old Bienes, they say, lost his massive fortune in the Bernie Madoff scandal. The New York Times quoted a Bienes attorney saying the man had lost tens of millions of dollars. On top of that, Bienes steered hundreds of people, many of them his own friends, to invest their savings in what turned out to be a $50 billion rip-off.

If you want to know the extent of the fallout from the Madoff scandal here in South Florida, you have to begin with the distraught man in his Fort Lauderdale mansion. The local arts community has lost perhaps its greatest benefactor. Bienes abruptly resigned his board post at the Broward Center for the Performing Arts after the scandal broke. And the Archdiocese of Miami is also reeling from the downfall of a man it had knighted.


Michael Bienes

But it's not just the arts crowd or the church feeling the pain; it's all of those friends and associates who Bienes fed to Madoff. Those same people, some of whom lost fortunes, are now left to wonder: Did their acquaintance know about the Ponzi scheme? Is he a perpetrator, a victim, or a bit of both?

"I heard [Bienes] lost everything," says Tony Stefanelli, a longtime friend who has surrendered about $14 million in the Madoff scandal. "I understand he was crying and everything else. I don't blame Michael, and don't believe he was involved in any way with the scamming."

That might be true, but the fact remains that Bienes has already been caught violating the law for Madoff. Bienes and longtime business partner Frank Avellino were among the very first "feeders" to Madoff's fund back in the 1960s, raising hundreds of millions of dollars from their accounting firm's clients, friends, and others.

By the early 1990s, they were managing 3,200 investors who'd put in nearly half a billion dollars, all of which they funneled into Madoff's hands.

Unfortunately, the operation was illegal. Both Bienes and Avellino were accountants, not licensed securities traders. The Securities and Exchange Commission caught them in 1992, fined them hundreds of thousands of dollars, shut them down, and forced them to return $440 million they'd raised.

But that appears to have been just a bump in the road in the lucrative relationship between Madoff and Bienes. Investors say Bienes and Avellino never stopped dealing with Madoff or raising money for the swindler's fund. They simply steered some of those same investors — who were accustomed to Madoff's famed 18 percent returns — to Fort Lauderdale accountant Michael D. Sullivan.

Two investors, who spoke on condition of anonymity, said they were encouraged by Avellino and Bienes to put their money in Sullivan's account after the SEC returned their money. Both did so — and lost hundreds of thousands of dollars when Madoff went down.

"The only irregularity was that they were not registered to sell securities," says the investor, who lost about $200,000 and spoke on condition of anonymity. "Everybody got every penny back, including interest. Nobody got hurt. So we were all sitting there with our money and put it back in with Sullivan."

Last month, Sullivan sent a letter informing investors that all of their money had been lost in the Madoff scandal, says the source. The Florida Office of Financial Regulation could find no broker's license or investment advisor's license in Sullivan's name. Sullivan couldn't be reached for comment. A man who answered the phone at his office said he wasn't available. "I am just helping out during this time," he said in a funereal tone.

After the SEC action, Bienes and Avellino partnered in a series of companies that also had investments in Madoff's fund, according to another anonymous investor who produced documents proving it. One of those documents shows that Christ Church United Methodist, which Sullivan attends, was among those investors. Asked about the church's Madoff investment, Pastor Alex Shanks said he would call back. He didn't.

This investor also provided documents from companies run by Bienes and Avellino that invested with Madoff.

It gets worse. Avellino, who sold his $2 million house in Fort Lauderdale in 2007 and owns a winter home in Palm Beach, was recently sued by the housekeeper of yet another residence, his $10 million summer home in Nantucket. The housekeeper claimed in Massachusetts civil court that Avellino caused her to sink her life savings of $124,000 into something called the Kenn Jordan Foundation. She claims Avellino informed her shortly before the Madoff scandal broke that all of her money had been lost.

Florida corporate records show that Avellino ran the Kenn Jordan Foundation from his former address in Fort Lauderdale. It was dissolved in 2001. Avellino and Bienes also ran other partnerships, including Mayfair Bookkeeping Services, from that same address before switching it over last year to Avellino's home address in Palm Beach.

The Mayfair firm also does business in London, where the Bieneses own a home and have donated millions to the London opera scene. Madoff, incidentally, also has headquarters in London, specifically — where else? — in the Mayfair financial district.

Interestingly, an early registered agent listed on companies run by Bienes and Avellino was Keith Wasserstrom, the disgraced former Hollywood commissioner who was convicted in 2007 of official misconduct. His involvement ended in the mid-1990s.

Friends of Bienes — all of them well-heeled — generally don't want to talk about the situation. When New Times called longtime chum and onetime business partner Fred Millsaps, his wife Audrey answered the phone. She said her husband didn't want to discuss Bienes or Madoff.

"He's very distressed about it," she said. "Many people are very distressed about it."

Asked if she and Fred had invested in Madoff's fund, she responded, "Bienes and my husband talked about it, but the decision was made not to invest, thankfully."

Gauging Madoff's damage to South Florida isn't easy, but there were definitely hundreds of victims. Foundations run by Miami's most wealthy citizens — including Stephen Muss, the Potamkins, and Norman Braman — lost tens of millions. And if Bienes is truly wiped out, that alone counts as a tragedy for many charities.

Bienes told a London publication in 2005 that he and his wife Dianne had donated some $30 million to causes in South Florida. Indeed, they gave enough money to have their names etched in plaques all over town.

The couple donated $4 million to Holy Cross Hospital for the Michael and Dianne Bienes Comprehensive Cancer Center. More recently, they poured $2.5 million into St. Thomas Aquinas High School, which recently opened the Bienes Center for the Arts.

The Archdiocese of Miami actually knighted both Bienes and his wife recently, not a small feat for a Jewish kid from New York.

Piecing together Bienes's life isn't easy. He became a certified public accountant and worked at a New York firm with Madoff's father-in-law, Saul Alpern. He and Avellino met Madoff at the firm and began funneling investments to him in the 1960s.

Bienes was originally married to a Jewish woman and had children before a divorce. Sources say he has little to no contact with his children.

He then met and married Dianne Dydo. The couple, who have no children, began visiting South Florida in 1974 and permanently settled in Fort Lauderdale in 1987, according to old newspaper accounts.

"They were thought of as these wacky people who would give away money," says one of the Madoff victims.

Before they left for London, Dianne took elocution lessons to learn to speak with a British accent. At one point, both of them had their teeth capped with veneers.

"They were these big white Chiclet things; they could barely talk with them," says the source.

The Bieneses were well known for the parties they threw at their Fort Lauderdale home, which is splayed across two lots, one with the 6,000-square-foot house, the other with a 10,000-square-foot "party pavilion" they built in 1991. The estate includes a large indoor pool, a climate-controlled wine closet, and a cold-storage compartment for Dianne's furs.

In a 1993 article about the Bienes estate, the Sun-Sentinel described the home as "an elegant configuration of stately columns, towering picture windows, and expansive terraces that seem to go on...and on...and on."

Local newspapers routinely wrote glowingly of the couple's home and the parties they held in the early 1990s, when the Bieneses were donating millions to the Florida Philharmonic Orchestra, Miami City Ballet, and Opera Guild of Fort Lauderdale.

One night in 1995, in what seems an incredibly symbolic stroke, the couple threw a "Gatsby Gala," celebrating those times of legendary parties — and legendary excess — that precipitated the Great Depression.

"The pool was covered with a dance floor, Jerry Wayne played the music of long ago," wrote the Sun-Sentinel. "The hooch flowed like water, and flappers swarmed about... The dinner was exquisite. Gold service plates and table wear, gold-tipped napkins, gold runners between the bowls of roses. You've got the picture — 24 karats all the way."

Interestingly, neither the Sentinel nor the Miami Herald reported the SEC action in 1992.

Stefanelli, who lost $14 million, attended some of those parties. He says Bienes, whom he once vacationed with in Brazil, confided that the Catholic Church was heavily invested, as was Monsignor Vincent Kelly of Fort Lauderdale, along with Kelly's relatives in Ireland. The Archdiocese of Miami denied it had any of its funds invested with Madoff.

"You want to know how it feels?" Stefanelli says. "How does it feel to be a rich, wealthy millionaire one day and the next day you have nothing, or next to nothing."

The 76-year-old Stefanelli also invested his children's money with Madoff. Their meeting was arranged by Bienes in 1992 after the SEC action. He invested directly with Madoff, whom he says deserves to be treated like a murderer. "My sons want to kill me right now, but my daughters are a little more understanding," he says. "My wife is ill, and I don't have much left. I have some property, but that's not easy to sell. I have enough for a few years, and I don't think I'll last much longer than that."

Through it all, he has faith that Bienes didn't knowingly lead him to desolation. But like everybody else, he can't be sure.


All-access pass to the top stories, events and offers around town.

  • Top Stories


All-access pass to top stories, events and offers around town.

Sign Up >

No Thanks!

Remind Me Later >