January 15, 2009 / 1:53 AM / in 12 years

Madoff ally under scrutiny as probe deepens

BOSTON (Reuters) - A scratch golfer with an actor’s good looks, combed back, salt-and-pepper hair and a towering frame, Robert Jaffe cut an impressive figure in the wealthy circles of Florida’s exclusive Palm Beach.

But the debonair 64-year-old philanthropist is now under mounting scrutiny over his friendship and business relationship with Bernard Madoff, the suspected mastermind behind an alleged $50 billion fraud.

Jaffe, chairman of the multimillion-dollar Palm HealthCare Foundation, was sought out in Palm Beach high society because he could deliver what seemed like the safest bet around — access to Madoff’s legendary fund and a relationship with Bernard L. Madoff Investment Securities LLC.

Massachusetts Secretary of State William Galvin wants to know exactly how much Jaffe knew about that business, filing a lawsuit on Wednesday in a bid to force the Massachusetts native to testify about Madoff’s alleged scheme.

Jaffe says he is as much a victim as anyone, telling the Palm Beach Post in December that while he earned a small 1-to-2 percentage of an investor’s first profits in Madoff’s fund he knew nothing about his “dark side”.

People who know Jaffe tend to agree, saying they doubt he was aware of how Madoff produced his impressive returns year after year even when most markets were falling.

They note that Jaffe had a vested interest in making sure the investments were safe: he is the son-in-law of one of Madoff’s earliest investors: Carl Shapiro, founder of the clothing brand Kay Windsor. Shapiro lost an estimated $545 million to Madoff, making him among the biggest victims.

“I can’t imagine that Jaffe would be part of perpetrating this fraud because it would hurt him,” said Richard Rampell, an accountant in Palm Beach, who knew Jaffe personally and has clients who lost millions of dollars in the scheme.

“Maybe he was ignorant of it, or should have known, but I’d be very surprised if he did,” he said.


Jaffe, vice president of Cohmad Securities Corp, was a polished regular presence in philanthropic circles.

He is a principal shareholder of M/A/S Capital Corp, a family-operated investment firm in Palm Beach, and sits on the boards of a trove of charities and elite clubs — from the American Cancer Society’s Palm Beach chapter to the Palm Beach Civic Association and the Palm Beach Country Club.

An overseer of Boston’s Beth Israel Deaconess Medical Center, Jaffe has deep roots in Massachusetts, where he married Ellen Shapiro in 1968. Together they own a $17.1 million Palm Beach mansion just 1,000 feet from Madoff’s $9.4 million home.

“He was a very fastidious dresser. Never had a hair out of place. He stands ram-rod straight and has sort of a dashing presence,” said Rampell, likening him to the kind of character found in novels by F. Scott Fitzgerald, author of the 1925 American classic “The Great Gatsby”.

Jaffe’s spokesman, Elliot Sloane, said his client “had absolutely no knowledge of the fraud and like so many others is a victim of these tragic events.”

According to federal records, Jaffe began his investment career in 1969 with a job at the now-defunct E.F. Hutton & Co, where he worked until 1980 when he joined Cowen & Co. After nine years there, he began work with New York-based Cohmad.

Galvin, the top Massachusetts regulator, issued a subpoena in December for Jaffe to testify on Tuesday. But Jaffe missed the 10 a.m. meeting, providing a doctor’s note saying he was ill, Sloane said. Galvin is among the first U.S. state regulators to probe the Madoff fraud.

Additional reporting by Svea Herbst-Bayliss, editing by Leslie Gevirtz

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