Saturday, 2:15 PM
Wall Street fraud forces Lappin Foundation to close in Salem
By Kathy McCabe, Globe Staff
A prominent North Shore foundation that has sent hundreds of local Jewish children to Israel discontinued its operations Friday when its assets were frozen in connection with the recent indictment of a New York investment manager.
The Robert L. Lappin Charitable Foundation announced Friday that it was discontinuing its programs, including its Youth to Israel and Teachers to Israel programs. The foundation also terminated its staff.
"We have no money," said Deborah Coltin, executive director of the Lappin Foundation. "We just can't continue."
According to a release from the foundation, "The money used to fund the programs of both foundations was invested with Bernard L. Madoff Investment Securities, and all the assets have been frozen by the federal courts.''
Madoff, a quiet force on Wall Street for decades, was arrested and charged Thursday with allegedly running a $50 billion "Ponzi scheme" in what may rank among the biggest fraud cases ever, according to the Associated Press.
"We are all devastated," Coltin said by telephone from her Salem office Friday. "You put your faith in someone. It turns out to be a huge scheme."
Coltin did not know the total amount of asset invested. Funds were frozen immediately, making it impossible for the foundation to pay seven employees or make payments to vendors, she said.
She said the foundation distributed $1.5 million in grants to Jewish educational and cultural services in 23 cities and towns north of Boston. "We are the heart of the Jewish community," she said.
Robert I. Lappin, foundation trustee, said in a statement: “It is with a heavy heart that I make this announcement ... The foundations’ programs have touched thousands of lives over many years in our efforts to help keep our children Jewish.”