LOS ANGELES (AFP) — Steven Spielberg's charitable foundation fell victim to the mammoth 50-billion-dollar fraud allegedly carried out by Wall Street heavyweight Bernard Madoff, reports said.
It is not known if the Oscar-winning film-maker had chunks of his personal fortune invested with Madoff but the director's Wunderkinder Foundation has suffered losses, according to the Wall Street Journal.
The foundation could not be immediately contacted for comment.
The newspaper reported that about 70 percent of the dividend income and interest for the foundation had been handled by Madoff's securities firm, which is now the subject of one of the biggest fraud investigations in history.
The Journal also cited people familiar with the case as saying that Spielberg's partner at DreamWorks Animation SKG, chief executive Jeffrey Katzenberg, had sustained "millions in Madoff-connected losses."
The report said both Katzenberg and Spielberg were the only two clients of legendary Hollywood financial adviser Jerry Breslauer, who had dealt with Madoff since 2004.
Madoff was arrested last week and allegedly confessed to defrauding investors of 50 billion dollars in a scam that collapsed after clients asked for their money back due to the global financial crisis.
US authorities allege that Madoff delivered consistently strong returns to clients by secretly using the principal investment from new investors for payments to other investors in what is known as a "pyramid fraud."
The scheme apparently worked as long as Madoff could attract new investors but seems to have unravelled when some of his clients asked to withdraw their investment -- only to discover that his seemingly brimming coffers were empty.
Copyright © 2009 AFP. All rights reserved. More »
