The Yiddish expression in the title — “A shame in front of the gentiles” — describes the general reaction of those in the Jewish community and/or Israel to the whole affair. The Jerusalem Post, for example, had an editorial noting that Madoff being a Jew will surely increase antisemitism; and, indeed, the usual gang of idiots on the Internet already sees Madoff as “proof” of the evil nature of the money-grubbing Jews, out to cheat the gentiles.
The truth is a bit different, to say the least, and more interesting. Madoff actually scammed many more Jews (proportionally, at least) than gentiles. The Israeli papers in the last two months or so since the scam was exposed are full of reports of one Jewish bank owner, fund manager, or investor after another, both in Israel and in Jewish communities abroad, being “burned” by Madoff.
Why did Madoff scam Jews? Trust. Like all scam artists, he built on the natural level of trust that exists between members of a community — religious, national, or other. You are less likely to believe a Zulu is out to scam you if you are another Zulu; especially if both of you live in the USA and therefore are a small minority among a large number of non-Zulus.
In the Israeli papers, this is seen in detail. Repeatedly, people said with a sigh: “Oy, that one Jew will do that to another Jew…” — and one who is known as a supporter of Israel, to boot. Surely someone like that won’t deliberately set out to scam other Jews?
Speaking of the naive belief that people of one’s own group will tend not to hurt you, Isaac Asimov tells the following story (in “Asimov Laughs Again”): once, he asked Ben Bova, the science writer, to give a lecture in his stead, since he was sick. Bova told him he could not do it — his Catholic upbringing does not allow him to profit from another person’s misfortune.
–”What are you talking about, Ben?” asked Asimov. “The Mafia–”
–”If you cause the misfortune, things are different.”