State treasury lost $19.5M to Madoff
By R.G. RATCLIFFE
Via: Chron.com
AUSTIN – The Texas treasury lost $19.5 million through an investment in the Ponzi scheme run by convicted financial swindler Bernard Madoff.
The money was part of a $224.5 million investment the Texas Treasury Safekeeping Trust Co. had with a Texas-based hedge fund called Austin Capital Safe Harbor. Austin Capital closed in May due to losses it suffered in one of Madoff’s scam investment funds.
Comptroller Susan Combs chairs the Treasury Safekeeping Trust, which manages $50 billion in tobacco lawsuit settlement funds, TexPool investments for 2,000 local governments and Treasury Pool for managing state funds.
Combs spokesman R.J. DeSilva said the $19.5 million was written off last December after Austin Capital notified the state the money had been lost when Madoff’s Ponzi scheme collapsed. The treasury had been investing with Austin Capital since 2006.
While many state investment funds lost millions of dollars in value with last year’s stock market decline, the value could return once the market rebounds. But money lost to Madoff’s Ponzi scheme is gone forever. Read more.
