Madoff investors' security may have been breached

Financier Bernard Madoff arrives at court.

Financier Bernard Madoff arrives at court. (Credit: Getty Images)

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More than 2,200 Bernard Madoff investors are learning that some of their personal and financial information has potentially been breached after the July theft of a laptop in Dallas, Newsday has learned.

The names, addresses, Social Security numbers and some Madoff account information on 2,246 investors was contained in a computer stolen from the car of an employee of AlixPartners Llp, the consulting firm that has been processing victims' claims in the Ponzi scheme, a company spokesman, Tim Yost, said Tuesday.

Yost said the laptop was password-protected and not targeted, but was taken in what Dallas police said was a "smash and grab" series of thefts on one particular night at a parking lot.

"We have no reason to believe it [investor data] has been compromised," Yost said.

News of the theft circulated Tuesday among the universe of Madoff victims as federal prosecutors disclosed in a court filing that about half of the investors were net winners because they actually withdrew more money than they gave to Madoff. But prosecutors also noted that nearly half of Madoff's customers sustained net losses in that they contributed more funds to Madoff than they withdrew.

The issue of whether the net winners can each receive up to $500,000 in protection from the Securities Investor Protection Corp., is the subject of a legal battle in bankruptcy court.

SIPC trustee Irving Picard has received more than 15,000 claims and has identified 2,336 account holders who have sustained more than $13 billion in losses, prosecutors said. The loss number is expected to rise.

Prosecutors are trying to sell off Madoff's homes and assets and are considering retaining Picard to oversee government efforts to repay investors. Madoff is serving a 150-year prison sentence in the scam.

Madoff victims already devastated by financial losses were angered that they are just learning about the theft in letters mailed by AlixPartners.

"So, this happened two months ago and now they are first telling us," said investor Richard Friedman of Jericho. "What are we, fourth-class citizens?"

AlixPartners said it kept the news of the theft confidential until now at the request of Dallas law enforcement officials.

The company is offering to pay investors for two years of credit checking service from a unit of Experian so they can check for potential identity theft. Account information for some investors dating back before 1995 was on the computer, Yost said.

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