Rich Pawn Their Belongings

Pawnshops have seen their business go up. Thank the well-heeled victims of the recession and Bernie Madoff.

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Pawnshops—loan companies that take items as collateral—have always gotten a bad rap. This stereotypical image often comes to mind: A seedy store stuffed with broken belongings in an unsafe area of town often catering to derelicts and criminals. But with the credit crunch, pawnshops are seeing renewed life. More cash-strapped Americans are pawning their belongings—from diamond rings and necklaces to iPods, televisions, and even boats. As a result, pawnshops across the country are seeing their businesses grow and are attracting a broader range of clients, including the well heeled.

From Reuters: " 'Banks aren't lending, so people are coming here for short-term loans against collateral like diamonds, watches, and other jewelry,' said Jordan Tabach-Bank, CEO of Beverly Loan Co, self-described 'pawnbroker to the stars.' . . . 'I do see my share of actors, writers, producers and directors,' he said, but also cited more visits from white-collar professionals and especially business owners struggling to meet payroll obligations . . . We still do the five-, six-figure loans to Beverly Hills socialites who want to get plastic surgery but never have we seen so many people in desperate need of funds to finance business enterprises,' he added."

According to the AP, Pawnbroker Levi Touger has seen his Palm Beach business take off, thanks in part to Bernie Madoff's $50 billion Ponzi scheme. He has recently made loans to investors who've become victims of the scam:

"Beverly and Marvin Hoffman, recently transplanted to Boynton Beach from Marblehead, Mass., popped in [Levi Touger's pawnshop] to sell some old jewelry. As Touger looked over the pieces, a nearby TV played footage of Madoff fighting his way through a throng of reporters following a court hearing in New York. The Hoffmans are friends of Palm Beach resident Bob Lappin, whose foundation pays to send Jewish youth to Israel. The foundation had to lay off its employees in the wake of the Madoff scandal."