March 20 (Bloomberg) -- Richard Shapiro, a victim of Bernard Madoff’s $65 billion Ponzi scheme, told a judge he lost 30 pounds due to stress and couldn’t leave his home for three weeks after the financier’s Dec. 11 arrest.

Shapiro’s story, detailed in a March 10 letter, was made public by the government today, along with dozens of other messages citing financial ruin and personal anguish. Many of the victims blamed the U.S. Securities and Exchange Commission for failing to uncover the fraud.

“Today we live in fear, mistrust, and are captive to the hope that the federal government will provide some relief to us for their failure to properly regulate, and do their job,” Shapiro, of Hidden Hills, California, said in his letter. “We are emotionally forever damaged.”

Madoff, 70, pleaded guilty before U.S. District Judge Denny Chin in Manhattan on March 12 to 11 counts including money laundering and fraud. He faces a prison sentence of as many as 150 years. Earlier today, a federal appeals court in New York rejected his bid to be freed before he’s sentenced in June.

“My husband served in the Vietnam War and now I feel our country, through the SEC, has let us down,” Lynn Sustak, of Atlanta, who invested with Madoff beginning in 2003, said in her letter. “Over time, most all of our savings were placed in the hands of Bernard Madoff. Our retirement looks bleak.”

Madoff admitted he used money from new investors to pay off old ones and said the global fraud began in the early 1990s. Prosecutors said they’ll seek to seize more than $100 million in assets from Madoff and his wife, Ruth.

Alzheimer’s Patient

Some of the messages released today by prosecutors had senders’ names blacked out. Others were written by relatives on behalf of elderly or ailing victims, including an 87-year-old Alzheimer’s patient who lost her $500,000 life savings.

“That money was for her to live out the rest of her life in comfort,” a child of the Alzheimer’s patient wrote in a March 9 e-mail that had the name redacted. “She is very depressed and can’t understand why this happened to her.”

Until now, most attention has been given to celebrities, hedge funds and banks around the world that lost money in Madoff’s scam. Many of the victims revealed today cite relatively smaller losses that accounted for larger shares of wealth.

‘Not Rich’

“I am not rich,” a 52-year-old self-employed woman in California wrote in a letter. “The entire amount I lost was nowhere near a million dollars, but I was proud I had saved it. I do not own a home to sell. I do not have anyone to support me in my old age.”

Shapiro, the California investor, wasn’t the only one driven to despair by the shock of the fraud.

“I went into a deep depression and for the first six weeks was unable to eat,” an investor of 15 years said in a letter with the name redacted. “I still wake most mornings with a feeling of dread and disbelief -- I’m still waiting to wake up from this nightmare.”

Many of the letters called on the government to make an extra effort to help victims.

Given the SEC’s failure, “it is certainly justice that everyone in the federal government do what he or she can to ameliorate this situation,” said Eugene Wolsk, 80, of Montauk, New York, who invested with Madoff for 21 years.

‘Serious Trouble’

“We are in serious trouble,” Wolsk’s wife, Laura, who has been forced to go back to work, said in a separate letter. “This is no time to sell a house and we don’t have money to keep it up.”

Wolsk and his wife aren’t the only victims whose only remaining asset is their home.

“Other than the value of our home, which we are presently attempting to sell, we have no other assets,” a 74-year-old anonymous victim in Florida wrote in a letter. “Finding employment at this point is almost impossible.”

The letters detail the lives of people who saved in the neighborhood of several hundreds of thousands of dollars and who were preparing to retire, or had already retired.

“All of my well-thought-out plans are now in shambles,” wrote a retired former U.S. sailor living in Pennsylvania. “Not only will I not be able to retire at what Americans consider the normal retirement age of 65, but retirement at any age is out of the question.”

A Florida couple that invested $853,000 since 1992 said in a letter that their “Golden Years” had been taken from them, and they expressed doubt that employers would be interested in “a guy with a gimpy leg and woman who has fought cancer.”

SEC Faulted

“What was the supposed role of the SEC during the years of our investment,” the couple wrote in their letter. “We didn’t not profess to be investment experts or economists; we could have used some government expertise and oversight.”

Most of the letters shared that theme: blaming the SEC.

“Since one of the reasons the SEC exists is to provide the investor with a sense of confidence, we had once again a legitimate expectation that nothing was wrong,” said a victim whose name was redacted. There’s a “level of disgust with the government and its non-existent efforts to protect us all,” the letter stated.

At least one letter suggested the government itself pay victims.

“I relied on the regulatory system for securities and banking when I invested my earnings,” an anonymous investor wrote. “What more could I do than that? When an individual screws up, he pays; so why can’t the government pay when they screw up?”

Widow’s Plight

Another victim in New Jersey cited family losses that struck parents and children alike, just 18 months after the death of a father-in-law, who “left his wife believing that she would be able to live in a safe and secure lifestyle.

“She may not be able to maintain her home and living expenses, forcing her to move in with her children, all of whom were Bernard Madoff investors and are now struggling financially,” the investor said in a letter with the name blacked out.

A New York real-estate broker who invested her inheritance and a divorce-settlement with Madoff, said she hoped to build a nest egg to leave for her three children and their grandchildren.

“Bernard Madoff took my hopes, dreams and self-esteem,” the broker said in a letter. “I feel violated and insecure, as I do not know what the future holds for me.”

The case is U.S. v. Madoff, 09-cr-00213, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Erik Larson in New York federal court elarson4@bloomberg.net.

Last Updated: March 20, 2009 21:24 EDT