Editor's pick: Originally published June 15.
Holly Marchak and her husband lost $2.3 million when they were defrauded in the Ponzi scheme of the so-called "Brooklyn Madoff." Nine years later, she's still paying for it.
She spends thousands of dollars a year on prescription drugs alone. Marchak, who lives in Orlando, Fla., began weeping as she told me the story of Philip Barry, now in federal prison, who defrauded her and her husband Alex Marchak. The money had been proceeds from the sale of a building that housed a funeral home the couple owned.
Marchak, 62, says she takes medication for anxiety, high blood pressure, asthma and heart problems. "There are times we don't want to wake up in the morning," she said. "My doctor has a mile-long, thick file on me and says it's all stress-related."
Lawyers who represent investors say the stress of a serious financial loss can trigger a whole new wave of costs for clients. Medical research has linked stress to viral infections, asthma, atherosclerosis, ulcers and increased risk for diabetes mellitus, among other diseases. More focused studies highlight the hazards of financial stress.
Marguerite DeLiema, a postdoctoral researcher at the Stanford Center for Longevity who studies the prevalence and cost of financial fraud, said that 17% of fraud victims in a recent online pilot study said they sought professional or medical help after the incident. In a separate study by the Finra Foundation last year, 35% of fraud victims said they became depressed after they lost their money. Some 24% reported physical health problems. A 2008 poll by the AP and AOL linked heavy debt with increased health problems.
Ask David J. Allio about the $1.1 million he says he lost in his account at Santander Securities Corp. and he'll take a few minutes to talk about the upending of his retirement budget and the depletion of an education fund for his 10-year-old twins.
But it doesn't take long for the conversation to shift to a separate drain on his energy and finances.
"I've spent more time with doctors in the last eight months than in my entire life," he said in a telephone interview from his home in Puerto Rico. "I was a pretty happy person before this happened. Now I go to bed at night and it's all I think about."
Allio's new health problems have added to his expenses as he pays for drugs to treat an increased heart rate, multiple visits to specialists to treat debilitating back pain and an assortment of x-rays and MRIs. Allio said he is convinced that his health issues are linked to his financial stress.