Bernie Madoff Scandal: Uncle Sham

A year after the collapse of Bernie Madoff’s house of cards, two local victims are determined to get their money back from the U.S. government

IN APRIL 2009, after he and his mother lost a lifetime of savings to Bernie Madoff, Michael DeVita began calling the White House regularly. One day, he reached the switchboard and asked to speak to the President.

“Excuse me?” the operator said.

“I’d like to speak to President Obama, please, to discuss my losses in the Madoff scam. Maybe over breakfast. Does he have time for a meeting?”

Pause. “Are you kidding?”

“He’s my president. I’m owed my back taxes.”

The operator redirected him to a public comments line, a glorified voicemail box. He never heard back. He keeps calling.

DeVita, 59, has been radicalized by his experience. In the split-level ranch they share in Chalfont, Montgomery County, he and his 81-year-old mother, Emma, could not be more solidly, proudly middle-class. Michael DeVita worked as a naval electrician, fixing planes at the base in Willow Grove. His mother, who reportedly lost a $1 million nest egg built by her and her late husband, worked for Sears for 22 years.

They fly in the face of what the public sees as the typical Madoff victim — wealthy, Jewish and professional. The DeVitas were among tens of thousands of people who sank their lifetime savings into Madoff’s phony operation, thinking he ran a legitimate brokerage. Many now have nothing: One woman who testified at Madoff’s sentencing survives on food stamps and dumpster diving.

The DeVitas still have enough to eat. But their savings, their future, are gone. What they want now is to get their taxes back — the money they paid the federal and state governments over decades on phantom profits Madoff simply fabricated. In other words, money they never owed.

“I come from a military family,” Michael says. “My grandfather was a doughboy in the trenches. My father was in World War II. I had an uncle in the Battle of the Bulge; another went to Vietnam. I was a naval electrician. Every time my country asks, my family has been there.” He’s sipping coffee in his mother’s kitchen. “This is the first time I’ve called upon my government to do anything. The government is keeping tax money as a result of phantom profits for more than two decades. It is morally repugnant.”

Despite 300 phone calls and even more faxes to state and federal legislators, DeVita got no response, — until he buttonholed local congressman Patrick Murphy, an Iraq war veteran, at a veterans’ memorial service. In response to the DeVitas’ plight, Murphy co-sponsored House Bill 1389, which is in limbo as Congress debates health care.

“No one wants to talk about the SEC’s complicity,” Michael says. “But what happened to us can very easily happen to anyone.” He’s furious that he paid taxes on fake income: “Can you imagine if we hadn’t paid taxes? We’d be in jail right now!”