Bremen businessman and philanthropist Dan Goldenson said his Damariscotta business venture and local charitable efforts will continue despite losing $2.5 million of his own funds to investment fraud.
“We are taking this as a setback, but not a death sentence,” Goldenson said Dec. 31.
Goldenson, a Bremen resident and Founder and President of Starting Out, Inc. in Damariscotta, wrote a letter to Judge Louis L. Stanton of the U.S. District Court in Manhattan, as reported in the Dec. 30 issue of the New York Times.
In his letter, Goldenson asked the judge to consider broadening the scope of federal protection offered to direct investors to include those indirect investors who felt the repercussions of the massive securities fraud operated by investor Bernard L. Madoff.
As reported in multiple media sources, the fraud allegedly perpetrated by Madoff would be the largest Ponzi scheme in recorded history if reports that the swindle indeed amounted to $50 billion. Madoff has been arrested and charged in relation to the scandal.
The term “Ponzi” is taken from a notorious con artist living in Boston, Charles Ponzi, who swindled millions of dollars in a scheme he created in 1920. Madoff used the same principle that guided Ponzi by paying off early investors with incoming investor money, instead of using funds from profit.
The substantial loss affects not just the personal finances of the Goldenson family whose philanthropic activities include nature conservation and Maine’s working waterfront, but other charitable and educational institutions nationwide.
The money Goldenson invested in an Ascot Partners Fund was, to his alarm, diverted to the Bernard L. Madoff Investment Securities, LLC. Goldenson said he learned of this financial transaction while browsing the Internet.
“We didn’t know the fund was diverting money to Madoff and company,” Goldenson said, adding he never heard of Madoff before the scandal. “It was a shock.”
The local philanthropist joins charitable and educational institutions that lost billions of dollars in the financial quagmire.
“We don’t like to give it away this way,” he said of the investment loss.
Educational institutions such as Tufts University in Massachusetts and New York University have responded to their record losses by filing suit against the investment fund.
In the face of such a setback, Goldenson remains committed to many projects and causes; however his retirement will be significantly delayed, he said. The financial loss will postpone some planned activities, but it is not a permanent situation.
Goldenson’s local publishing company recently released the book, “Starting Out! in Maine: Navigating Life After Graduation.” Released in early December, the book and accompanying material is a project Goldenson hopes will help many young people prepare for new careers and life’s challenges. The book contains more than 80 chapters on life management topics such as establishing credit, locating career opportunities and health issues.
In a first of many projects in the area of conservation, the Goldensons donated 50 acres of land to Maine Audubon in 2005 for a bird sanctuary. They contributed an additional 165 acres on Bremen Long Island to the Medomak Valley Land Trust in Dec. 2007.
Goldenson also helped the Bremen Lobster Co-op obtain a grant for capital improvements in an effort to protect the sustainability of Maine working waterfront. The $300,000 grant was announced in Nov. 2008.
Goldenson is starting a new charitable fund called the Starting Out Foundation, which will be supported by profits from Starting Out, Inc. He said the purpose of the fund would be to support life skills and career readiness education for young people.
The local business owner is determined to not let this setback ruin his plans at a time when he said so many other people are suffering the effects of an economic downturn. He said his family wants to do what they can to create new jobs and help the Maine economy.
“You can either let a serious setback ruin your life or you can try to overcome it through hard work and perseverance,” he said.