Fool Me Thrice: New York Businessman Fell Prey To Enron, Madoff, And FTX Scams
Patrick McMullan via Getty Images

Robert Belfer, an oil entrepreneur and the patriarch of the elite Belfer family, lost money during the bankruptcy of cryptocurrency platform FTX years after he suffered hits from the collapse of fraudulent energy company Enron and the Ponzi scheme led by Bernie Madoff.

Court documents show that investment funds linked to the Belfer family were included in a list of shareholders for FTX, the fraudulent digital asset company led by 30-year-old Sam Bankman-Fried, according to a report from Financial Times. Belfer Investment Partners and Lime Partners, both of which are linked to the family, held a combined $34.5 million in the company as of the beginning of last year.

Robert Belfer and his wife, Renée, are philanthropists who have donated heavily to the Metropolitan Museum of Art in New York City; the institution’s Greek and Roman galleries bear the Belfer name, as does the international affairs center at Harvard Kennedy School. Robert Belfer is the son of Arthur Belfer, who moved to the United States from Poland soon after Nazi Germany invaded the country. He imported feathers for pillows and sleeping bags before his company began dealing in foam rubber and petroleum products.

Belco Petroleum Corporation later became a Fortune 500 company and was acquired by a predecessor of Enron, making the Belfer family stakeholders in the company. Robert Belfer served on the board of Enron until 2002, five years before the company was rendered insolvent in a development that cost the Belfers some $2 billion.

The family, down to a net worth of approximately $110 million, had a stroke of luck by withdrawing $28 million from the investment advisory run by Bernie Madoff. The late financier’s Ponzi scheme was discovered shortly after the stock market crash of 2008. Irving Picard, the trustee appointed to claw back funds on behalf of the Madoff victims, filed suit against the family to obtain investments in an attempt to aid other victims, according to a report from the New York Post. The result of the legal proceedings is unknown.

Bankman-Fried, whose alleged misconduct has often been compared to the Madoff scheme, pleaded not guilty earlier this month to eight charges, including conspiracy to commit wire fraud and conspiracy to commit securities fraud. Celebrities such as Tampa Bay Buccaneers quarterback Tom Brady and supermodel ex-wife Gisele Bündchen received combinations of equity and cryptocurrencies as reimbursement for appearing in advertisements and publicly endorsing FTX; they now face a lawsuit accusing them of participating in a “fraudulent scheme” against unsophisticated investors.

FTX collapsed after users learned that their funds were commingled with sister trading firm Alameda Research, which was led by a former love interest of Bankman-Fried. A number of individual users and institutional clients had as much as $8 billion remaining with the company, which Bankman-Fried had attempted to solicit from investors with little success. John Ray III, a bankruptcy lawyer who was appointed to lead the FTX bankruptcy proceedings, told lawmakers that he had never seen “such a complete failure of corporate controls and such a complete absence of trustworthy financial information.”

Bankman-Fried and fellow executives had used the funds to purchase luxury tropical real estate and make sizable political contributions to Democratic candidates. Attorneys have recovered some $5 billion in assets to repay defrauded customers and investors.

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