Bernard Madoff, the disgraced money manager, has until the end of today to reveal to regulators a list of all of his and his firm's assets. It's a key piece of the puzzle for investigators trying to untangle his alleged $50 billion investment scheme and for investors hoping to recover their money.
Regulators are still struggling to confirm the unprecedented size of the alleged scheme, track down the missing money and assess who may be responsible for the alleged fraud, whose tentacles have reached across the globe to touch everyone from celebrities to European banks to retirees looking to safeguard their life savings.
The Wall Street Journal reported today that Henry Kaufman, the former Salomon Bros. chief economist, had lost millions of dollars with Madoff and that actors Kevin Bacon and Kyra Sedgwick also had lost an undisclosed amount.
Lawyers warned that it could take months or years to fully unravel the complicated web of investments and legal liabilities, but the accounting from Madoff could provide a small clue to one of the enduring mysteries of the Madoff scandal -- what happened to all the money?
"There's never been anything of this scale. It's stretching our minds to imagine something even close to this," said Mitchell Zuckoff, a journalism professor at Boston University and author of "Ponzi's Scheme: The True Story of a Financial Legend." "I don't think anyone has pulled something off like this from the inside."
Though Madoff's remaining assets are not expected to come close to meeting the anticipated losses, investors could get a clue about how much money may be available to victims.
A Securities and Exchange Commission spokesman declined to say if the agency had received the disclosure or whether it would reveal its contents to the public. The spokesman said the court order requiring Madoff to reveal his assets did not require that the disclosure be made public.
Madoff, who remains under house arrest after allegedly confessing to bilking investors in what the prosecutors say was a giant Ponzi scheme, was ordered by a federal court in New York earlier this month to provide a full accounting of his wealth to the Securities and Exchange Commission by Dec. 31. His lawyer declined to comment.
Shortly before he was arrested, Madoff allegedly told employees that he had $200-$300 million left, according to an FBI complaint.
"I don't think there's going to be much money left," said Lawrence Klayman, an attorney who represents some Madoff investors. "It will pale in comparison to the overall totality of the losses."
On Wednesday, police recovered a $10,000 statue that was stolen from Madoff's Palm Beach, Fla., home, according to the Palm Beach police. Attached to the statue was a note that said, "Bernie the Swindler, Lesson: Return stolen property to rightful owners." It was signed, "The Educators," according to the Palm Beach Daily News.
On Tuesday, a U.S. Bankruptcy Court judge approved the transfer of $28.1 million of Madoff's assets to the trustee overseeing the liquidation of Madoff's investment firm.
In a separate proceeding, a federal judge is considering broadening the protections normally available to investors in fraud cases to include investments made by third parties.
Losses from some direct investors in Madoff funds may be covered by a federal fund that protects investors from fraud losses in brokerage accounts, known as the Securities Investor Protection Corp.