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Untangling Madoff Case Baffles Feds

Investigators struggle with mounds of documents

By Wesley Oliver, Newser Staff

Posted Jan 9, 2009 3:37 PM CST

(Newser) – Federal investigators are struggling to piece together Bernie Madoff’s massive Ponzi scheme almost a month after his arrest for securities fraud, Bloomberg reports. The FBI, SEC, and Manhattan US attorney are amassing piles of data, including transaction records and investors’ monthly statements, to determine who else may have been involved in the $50 billion fraud.

Another productive source of info is an official website for Madoff’s victims. “This is like an explosion that’s ripped a hole which the investigators are pouring through, and it probably just doesn’t relate to Madoff alone,” said a former prosecutor, guessing the probe could take months. The feds must "catch whatever funds they can in a very fast-moving system and get seizure orders on those funds in place," he said.

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Prosecutors on Monday said Bernard Madoff violated bail conditions by mailing about $1 million worth of jewelry and other assets to relatives and should be jailed without bail. (AP Photo/Kathy Willens)

Disgraced financier Bernard Madoff leaves U.S. District Court in Manhattan after a bail hearing in New York. (AP Photo/Kathy Willens)

SEC Chairman Christopher Cox and other federal authorities are struggling to learn how Bernard Madoff directed an alleged $50 billion Ponzi scheme and how widespread it may have been. (AP Photo/Lawrence Jackson)

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These kinds of investigations are incredibly resource-intensive because of the paper trail involved and the level of sophistication needed to go through the paperwork. - Daniel Richman, a Columbia Law School professor and former federal prosecutor

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Untangling Madoff Case Baffles Feds