Stanley Chais (March 27, 1926 – September 26, 2010) was an American
investment advisor,
money manager
Investment management is the professional asset management of various securities, including shareholdings, bonds, and other assets, such as real estate, to meet specified investment goals for the benefit of investors. Investors may be institut ...
, and
philanthropist
Philanthropy is a form of altruism that consists of "private initiatives, for the public good, focusing on quality of life". Philanthropy contrasts with business initiatives, which are private initiatives for private good, focusing on material ...
. He operated "
feeder funds" which collected money for funds related to the
Madoff investment scandal. The widow, family, and estate of Chais settled with Madoff trustee
Irving Picard
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in 2016 for $277 million.
Early and personal life
Chais was born to a
Jewish
Jews ( he, יְהוּדִים, , ) or Jewish people are an ethnoreligious group and nation originating from the Israelites Israelite origins and kingdom: "The first act in the long drama of Jewish history is the age of the Israelites""The ...
family in
the Bronx, New York.
[Stuart Pfeifer, David Sarno]
Stanley Chais dies at 84; money manager invested with Bernard Madoff
''The Los Angeles Times'', September 27, 2010 He attended
Syracuse University
Syracuse University (informally 'Cuse or SU) is a Private university, private research university in Syracuse, New York. Established in 1870 with roots in the Methodist Episcopal Church, the university has been nonsectarian since 1920. Locate ...
, graduating in 1947.
[''Bernie Madoff, the Wizard of Lies'' - Diana B. Henriques - Google Books]
/ref>
He was married to Pamela Chais, a playwright and screenwriter. They resided with their three children first in Sands Point, New York
Sands Point is a village located at the tip of the Cow Neck Peninsula in the Town of North Hempstead, in Nassau County, on the North Shore of Long Island, in New York, United States. It is considered part of the Greater Port Washington area, ...
, and then in Beverly Hills
Beverly Hills is a city located in Los Angeles County, California. A notable and historic suburb of Greater Los Angeles, it is in a wealthy area immediately southwest of the Hollywood Hills, approximately northwest of downtown Los Angeles. ...
and West Hollywood
West Hollywood is a city in Los Angeles County, California, United States. Incorporated in 1984, it is home to the Sunset Strip. As of the 2020 U.S. Census, its population was 35,757. It is considered one of the most prominent gay villages ...
, California. After the scandal, they moved to Manhattan
Manhattan (), known regionally as the City, is the most densely populated and geographically smallest of the five boroughs of New York City. The borough is also coextensive with New York County, one of the original counties of the U.S. state ...
, New York.
Involvement in Madoff's Ponzi scheme
Chais was an investment advisor, money manager
Investment management is the professional asset management of various securities, including shareholdings, bonds, and other assets, such as real estate, to meet specified investment goals for the benefit of investors. Investors may be institut ...
, and philanthropist
Philanthropy is a form of altruism that consists of "private initiatives, for the public good, focusing on quality of life". Philanthropy contrasts with business initiatives, which are private initiatives for private good, focusing on material ...
. He operated " feeder funds" which collected money for funds related to the Madoff investment scandal.["Accused Madoff middleman Stanley Chais dies,"]
Reuters. He operated three funds that offered returns of up to 25%. He told clients that he achieved the returns using a complex combination of derivative
In mathematics, the derivative of a function of a real variable measures the sensitivity to change of the function value (output value) with respect to a change in its argument (input value). Derivatives are a fundamental tool of calculus. ...
s, stock, currency and futures trading
In finance, a futures contract (sometimes called a futures) is a standardized legal contract to buy or sell something at a predetermined price for delivery at a specified time in the future, between parties not yet known to each other. The asset ...
. Instead, the funds were merely funneled into Madoff's Ponzi scheme
A Ponzi scheme (, ) is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. Named after Italian businessman Charles Ponzi, the scheme leads victims to believe that profits are comin ...
.
On May 1, 2009, Irving Picard
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, ...
, bankruptcy trustee for Madoff Securities, filed a lawsuit against Stanley Chais. The complaint alleged he "knew or should have known" he was deep in a Ponzi scheme when his family investments with Madoff averaged 40% and sometimes soared as high as 300%. It also claimed Chais was a primary beneficiary of the scheme for at least 30 years, allowing his family to withdraw more than $1 billion from their accounts since 1995 - money that properly belonged to Madoff victims. The case number was ''Picard v. Chais'', 09-01172. When Chais claimed to be broke, Picard told a judge that Chais should sell his Fifth Avenue
Fifth Avenue is a major and prominent thoroughfare in the borough of Manhattan in New York City. It stretches north from Washington Square Park in Greenwich Village to West 143rd Street in Harlem. It is one of the most expensive shopping ...
New York apartment to pay his legal fees. On June 22, 2009, the Securities and Exchange Commission
The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...
filed civil fraud charges against Chais. On September 23, 2009, California Attorney General Jerry Brown
Edmund Gerald Brown Jr. (born April 7, 1938) is an American lawyer, author, and politician who served as the 34th and 39th governor of California from 1975 to 1983 and 2011 to 2019. A member of the Democratic Party, he was elected Secretary of S ...
filed a lawsuit against Chais seeking $25 million in penalties and restitution for victims. Federal prosecutors had opened a criminal probe into him, but he died in September 2010 before they filed charges against him. His lawyer denied that Chais committed any wrongdoing.
Settlement with Picard
The widow, children, family, and estate of Chais settled with Picard in 2016 for $277 million.["Madoff trustee reaches $277 million accord with money manager's family,"]
Reuters. On November 19, 2016, the approved a global settlement – made in cooperation with the California Attorney General - with the defendants in ''Picard v. the Estate of Stanley Chais, et al''. The agreement was made with the Stanley Chais estate, Chais’s widow, children, and a number of other Chais family members, investment funds, trusts, companies, and other entities associated with Chais. Under the terms of the agreement, the BLMIS Customer Fund received $277 million, including a cash payment of $258.47 million, as well as the assignment of other assets that would be liquidated over time. All proceeds of the settlement were to go to the BLMIS Customer Fund for the benefit of BLMIS customers with allowed claims. Picard’s lawyers said the settlement covered all of Chais’ estate and substantially all of his widow’s assets, and represented “a good faith, complete and total compromise.”
Philanthropy
Chais founded the Chais Family Foundation, which donated extensively to organizations that preserve and further Jewish history and culture, from reestablishing and maintaining Jewish culture in areas where it was diminished by the Holocaust
The Holocaust, also known as the Shoah, was the genocide of European Jews during World War II. Between 1941 and 1945, Nazi Germany and its collaborators systematically murdered some six million Jews across German-occupied Europ ...
and by Soviet policy, to Israeli organizations. In Israel, Chais sat on the boards of Technion, the Weizmann Institute
The Weizmann Institute of Science ( he, מכון ויצמן למדע ''Machon Vaitzman LeMada'') is a public research university in Rehovot, Israel, established in 1934, 14 years before the State of Israel. It differs from other Israeli u ...
, and Hebrew University of Jerusalem
The Hebrew University of Jerusalem (HUJI; he, הַאוּנִיבֶרְסִיטָה הַעִבְרִית בִּירוּשָׁלַיִם) is a public research university based in Jerusalem, Israel. Co-founded by Albert Einstein and Dr. Chaim Weiz ...
. The foundation, which had been funded through the Madoff scam, collapsed in December 2008.
Death
He suffered from profound anemia
Anemia or anaemia (British English) is a blood disorder in which the blood has a reduced ability to carry oxygen due to a lower than normal number of red blood cells, or a reduction in the amount of hemoglobin. When anemia comes on slowly, t ...
. Chais died on September 26, 2010, at age 84 in Manhattan, where he and his wife had moved to further the treatment of myelodysplastic syndrome, a blood disorder that eventually took his life.">"Stanley Chais; linked to Madoff" - ''Times Union''
/ref>
References
External links
''SEC v. Chais''
US District Court Southern District of New York, June 22, 2009
"Settlement Agreement"
between Irving Picard and Pamela Chais, et al, October 19, 2016
{{DEFAULTSORT:Chais, Stanley
1926 births
2010 deaths
People from Sands Point, New York
People from Manhattan
People from the Bronx
People from Beverly Hills, California
People from West Hollywood, California
Syracuse University alumni
2008 in economics
Jewish American philanthropists
American money managers
Pyramid and Ponzi schemes
Deaths from blood disease
People associated with the Madoff investment scandal
20th-century American philanthropists
21st-century American Jews