When Eunice Lehrer unexpectedly found love after her first husband died, she considered herself doubly lucky.
Not only had she found a wonderful and successful man to share her life with, but he had unusual connections that could help assure she would remain financially secure.
As a former managing partner of a prestigious New York City law firm, her new husband, Stanley Lehrer, had been privileged to invest with Bernard Madoff. Their 2002 marriage allowed Eunice to enter that rarefied world as well.
Now, two years after the once-revered financial guru admitted that his operation was a giant Ponzi scheme, Lehrer and her husband find themselves in an unenviable group even among those who lost millions in the epic fraud.
Eunice invested the $1.9 million she got when her first husband died in an account Stanley's law partners had with Madoff. To her surprise, the 75-year-old learned that makes her an indirect investor. As such, she is not entitled to the $500,000 reimbursement from the Securities Investor Protection Corp. or any of the billions being recovered for victims.
Further, because her husband and his partners had invested with Madoff for 28 years, money was withdrawn as partners or their circumstances changed. Although the account showed a $65 million balance shortly before Madoff's arrest, the court-appointed trustee wants Lehrer, 85, and the roughly 15 former partners and their families, including Eunice, to return $22 million - the amount trustee Irving Picard claims was withdrawn in the six years before Madoff's December 2008 arrest.
The suburban Delray Beach couple know they are far from alone. Of the nearly 16,500 claims for reimbursement that were filed with Picard, more than 10,500 were rejected because they had invested with Madoff through feeder funds or others, making them indirect investors.
Another roughly 2,700 were rejected because people had taken out more than they invested. Picard has filed roughly 1,000 so-called clawback lawsuits against investors, demanding that they return millions in ill-gotten gains.
Two years after Stanley looked at Eunice and said, "There goes my life," they and others like them are still struggling with the enormity of their loss and their legal frustrations. Even their closest friends don't understand.
Friends will ask: "How could you put your money there?" Eunice said. Rather than remind them that Madoff was a former chairman of Nasdaq and revered on Wall Street, she laughs. "You're talking to someone who's drowning and asking them why they're in the water."
She knows some suspect she and her husband were greedy - that they didn't question extraordinary returns. But, both insist, the returns weren't fantastic. In most years, she said, they hovered between 9 percent and 10 percent.
In the past month, as Picard has announced multimillion-dollar settlements - including a whopping $7.2 billion settlement with Palm Beach philanthropist Barbara Picower that was recently approved by a judge - some have called to congratulate them, thinking they will get a cut of the proceeds and can resume their former life.
Instead, they are entitled to nothing and, in fact, are being asked to return money.
Even lawyers acknowledge it is complex. Some suggest that if Picard recovers so much money that he can repay all of the direct investors, some of the indirect investors, such as Eunice, may be entitled to recover some of their lost money. Others disagree.
Lawyers are seeking to overturn Picard's decision not to use the last statements investors received before Madoff's arrest as a basis for reimbursement. Instead, he is using a cash-in-cash-out approach, meaning those who took out more than they put in get nothing and some received clawback letters. An appeal has also been filed to allow indirect investors and those who withdrew more than they invested to receive some of the proceeds from the $7.2 billion Picower settlement.
There is also a $1 billion class-action lawsuit filed in Denver against FISERV, which was the custodian of Madoff's IRA accounts, including a $6.6 million one Stanley had. Eunice's investment ended up in its control as well. The lawsuit accuses the company of breaching its responsibility to an estimated 800 investors. Lehrer doesn't have high hopes for the complex suit.
A congressman has also filed a bill that would require SIPC to pay indirect investors in Ponzi schemes up to $100,000. However, the bill, filed by Rep. Gary Ackerman, D-N.Y., and backed by several South Florida lawmakers, has sat in committee unheard for nearly nine months. Even Ackerman describes it "as a long shot." With people out of work and the economy still quaking, some say now is not the time to seek what could be seen as a bailout for people many believe are still wealthy.
But the Lehrers said in their case, like countless others, that wealth is gone.
Once residents of the tony Mizner Country Club in suburban Boca Raton, they sold their house and most of their furniture at a loss.