Charleston Area Medical Center and its foundation lost $1 million invested with Bernard Madoff, the former Wall Street money manager now accused of running a $50 billion Ponzi scheme, hospital officials said Monday.
CHARLESTON, W.Va. - Charleston Area Medical Center and its foundation lost $1 million invested with Bernard Madoff, the former Wall Street money manager now accused of running a $50 billion Ponzi scheme, hospital officials said Monday.
The CAMC Foundation had $800,000 invested with Madoff through the foundation's money manager, Morgan Keegan. The hospital lost $200,000.
"It's unfortunate," said Gail Pitchford, president of the CAMC Foundation. "We never want something like this to happen. We weren't the only ones who had Mr. Madoff's funds."
Madoff was arrested last month on securities fraud charges after reportedly admitting he had operated a Ponzi scheme, paying early investors with proceeds from those who invested with him later.
A growing number of prestigious charitable foundations, international banks and individuals have acknowledged falling victim to what is alleged to be the largest financial fraud in history. Madoff remains free on $10 million bail.
CAMC officials plan to discuss the $1 million loss when the hospital's Board of Trustees meets Jan. 28.
"It's an actual loss we're recording," said Larry Hudson, CAMC's chief financial officer. "It's an operational loss we'll have to work with."
Hudson wasn't sure exactly how many years CAMC had investments with Madoff. He said Morgan Keegan otherwise has performed "very well" as a hospital fund manager over the years.
Madoff's decades-long scheme entangled such high-profile investors as filmmaker Steven Spielberg and Hollywood actor Kevin Bacon. Numerous Wall Street firms also had investments with Madoff, former chairman of the NASDAQ stock market.
"There are a tremendous amount of notable people and financially smart people who had money with this guy," Hudson said. "Everybody bought into his ability and his track record. An incredible number of brilliant people got burned on this, and unfortunately we were in that group."
The CAMC Foundation, the hospital's philanthropic arm, gives the hospital $3 million to $4 million a year for equipment, and education and training programs.
CHARLESTON, W.Va. - Charleston Area Medical Center and its foundation lost $1 million invested with Bernard Madoff, the former Wall Street money manager now accused of running a $50 billion Ponzi scheme, hospital officials said Monday.
The CAMC Foundation had $800,000 invested with Madoff through the foundation's money manager, Morgan Keegan. The hospital lost $200,000.
"It's unfortunate," said Gail Pitchford, president of the CAMC Foundation. "We never want something like this to happen. We weren't the only ones who had Mr. Madoff's funds."
Madoff was arrested last month on securities fraud charges after reportedly admitting he had operated a Ponzi scheme, paying early investors with proceeds from those who invested with him later.
A growing number of prestigious charitable foundations, international banks and individuals have acknowledged falling victim to what is alleged to be the largest financial fraud in history. Madoff remains free on $10 million bail.
CAMC officials plan to discuss the $1 million loss when the hospital's Board of Trustees meets Jan. 28.
"It's an actual loss we're recording," said Larry Hudson, CAMC's chief financial officer. "It's an operational loss we'll have to work with."
Hudson wasn't sure exactly how many years CAMC had investments with Madoff. He said Morgan Keegan otherwise has performed "very well" as a hospital fund manager over the years.
Madoff's decades-long scheme entangled such high-profile investors as filmmaker Steven Spielberg and Hollywood actor Kevin Bacon. Numerous Wall Street firms also had investments with Madoff, former chairman of the NASDAQ stock market.
"There are a tremendous amount of notable people and financially smart people who had money with this guy," Hudson said. "Everybody bought into his ability and his track record. An incredible number of brilliant people got burned on this, and unfortunately we were in that group."
The CAMC Foundation, the hospital's philanthropic arm, gives the hospital $3 million to $4 million a year for equipment, and education and training programs.
Pitchford said the $800,000 loss wouldn't stop the Foundation from giving. The Foundation has $143.8 million in assets.
"At this point, we will continue to support CAMC at the same level," Pitchford said. "When times are tough, there's even more of a need for fundraising."
Last fall, CAMC administrators reported its investment portfolios lost about $26.3 million in value during the year because of the nation's ongoing financial crisis.
The Foundation's portfolio declined by $19 million, while hospital investments dropped by $7.3 million.
Hospital officials told CAMC trustees that the investment value losses could make it difficult for CAMC to borrow money for equipment and projects in the future - unless the portfolio rebounds.
"The market has not been kind to the hospital and the foundation in the past year," Hudson said Monday.
CAMC finished the year with an $8 million budget shortfall.
In recent weeks, Cabell Huntington Hospital and Weirton Hospital have announced plans to lay off workers. CAMC has no plans to reduce its work force at this time, Hudson said.
Reach Eric Eyre at erice...@wvgazette.com
or 304-348-4869.
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