The man Chalek sarcastically refers to as "good old Bernie" revealed to the FBI that his firm was a Ponzi scheme of epic proportions. Account statements for thousands of clients showing $60 billion in assets Chalek's account stood at $2.3 million were fiction.
Of the roughly $17.5 billion in principal that was real, most of it was gone. Authorities say it was paid out as fake profits or raided by Madoff's family and cronies.
A court-appointed trustee has so far recovered more than $9.5 billion to redistribute to burned clients through an ongoing claims process. Victims who invested through third-party "feeder funds" recently became eligible to make claims for an additional $2.35 billion collected through forfeitures, including funds from Madoff's wife, Ruth.
The victims have watched Madoff get a 150-year prison term at a federal penitentiary in Butner, North Carolina, his brother and business partner, Peter, sent away for 10 years and five former employees on trial now on charges they were in on the scheme. The trial, which began in October, resumes on Monday.
Despite the recovery effort and criminal prosecutions, some 5-year-old wounds haven't healed. A judge received several anguished letters from former investors before the sentencing of Peter Madoff in December 2012, including an unusual appeal by a Madoff in-law.
Robert Roman, the husband of Ruth Madoff's sister, wrote that they, too, were victims of the fraud. But he also sought mercy for the younger sibling of the now-vilified con man.
Peter Madoff's "fear of his brother's domination and back-yard bullying, personally witnessed in real time by me, should not have prevailed," he wrote. But he added, "My family will not cast one stone for that failure."
Chalek also wrote the court to "vent his spleen over the Madoff fiasco." In his letter, he described standing in line to enlist in the military after Pearl Harbor and flying 23 combat missions as a US airman in Europe.
Once home from the war, Chalek pursued the American dream: He started a grocery on Long Island and got hired by an advertising agency in Manhattan that he ended up buying. He sold the business late in life at a price that he thought would take care of him in retirement and keep his family financially secure when he was gone.
In the early 2000s, Chalek met Madoff, who was a golfing buddy of a friend of his father's. Given Madoff's on-paper returns, the chance to invest was too good to pass up.
"It was always beautiful," he said. "He was always the easiest guy to do business with. ... It went on like this for years."
Since the fraud was exposed, Chalek says he hasn't been repaid one penny. The trustee has deemed him a "net winner" meaning he and his family took out more from their Madoff account than was put in a determination he's disputing in bankruptcy court.
Chalek now gets by on Social Security, veterans' benefits and the companionship of retired educator Fran Reiss, a close friend who moved in with him after his wife died about a decade ago.
Reiss, 79, also lost her savings in the Madoff scheme but has tried to keep a sense of humor about it. She recounted how in the aftermath of Madoff's arrest, she and a friend spotted Madoff's wife, Ruth by then, recognizable from a wave of news stories walking on a Manhattan street in an expensive-looking leather jacket.
"That's some coat," the friend said.
"I know," Reiss responded. "I'm the one who bought it for her.'
