Feds Charge: The $50 BILLION Scam: One Man's Amazing Crime

But by the first week of December, when clients began clamoring for redemptions -- to the tune of $7 billion -- the complaint states that Madoff began a struggle to obtain the necessary liquidity. The stress began to show, the employees said.

In a meeting at their boss's Manhattan apartment -- held there following a confrontation in the office Wednesday because Madoff wasn't sure "he would be able to "hold it together" if the conversation took place in the office -- the employees came away believing that Madoff was "saying, in substance that he had for years been paying returns to certain investors out of the principal received from other, different investors."

The next day, Dec. 11, Madoff spoke with FBI agent Theodore Cacioppi and invited the agent and another agent to his apartment. Cacioppo stated in the complaint that he told Madoff he came by to see if "there's an innocent explanation."

"There is no innocent explanation," Madoff replied, according to the sworn complaint.

Dan Horowitz, Madoff's lawyer, did not return ABC News' call Thursday, after the complaint was unsealed. However, he told the Wall St. Journal earlier in the evening that "Bernard Madoff is a long-standing leader in the financial services industry with an unblemished record. He is a person of integrity. He intends to fight to get through this unfortunate event."

Madoff was released on $10 million bond following a court appearance in Manhattan.

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