Roman Catholic schools in the U.S. Virgin Islands will have to turn away parents seeking financial aid for their children because of losses in a multibillion-dollar Ponzi scheme, church officials said Wednesday.The Diocese of St. Thomas lost nearly $2 million on investments made with disgraced Wall Street financier Bernard Madoff, most of which represented endowment funds for youngsters at two Catholic elementary schools in St. Croix, the poorest of the U.S. Virgin Islands.
"The schools continue to function," Monsignor Jerome Feudjio said. "However, people who knocked on the door looking for financial aid, they may have to look elsewhere."
St. Mary's Elementary School lost roughly $800,000 and St. Patrick's lost about $400,000, Bishop Herbert Bevard said by telephone. He estimated another $800,000 in rainy day funds has evaporated in the massive fraud allegedly engineered by Madoff.
Bevard, who has been leading the diocese since September, said he learned of the losses from the church's financial officer last week.
Madoff, 70, a former Nasdaq stock market chairman, has become one of the most vilified people in America since news broke Dec. 11 that he allegedly had been running a giant pyramid scam, paying returns to some investors out of the principal received from others.
Victims included a global roster of investors, including retirees and charities worldwide. So far, investors have said that they have lost more than $30 billion, according to an Associated Press calculation.
Many parishioners learned of their financial hit at church services in the U.S. Caribbean territory this weekend, and Bevard is preparing a letter to non-Catholic parents of schoolchildren at parochial schools.
"We're all taking a very philosophical approach to this," Bevard said. "The reaction from parishioners has been very supportive, but, of course, everyone is very disappointed with Mr. Madoff and the fraud."
The fraud also wiped out part of the diocese's insurance and pension money, Feudjio said.
"Even though our priests are young, it means that in 20 years we will have to start finding ways to help them," Feudjio said.
Bevard said he believed church officials first invested money with Madoff around 20 years ago for endowment programs at St. Patrick's. St. Mary's followed sometime in the 1990s, he said.
"I understand that there is a class-action lawsuit, of which we would be among hundreds of others," Bevard said. "However, I doubt we could get any major returns."
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(Source: AP)