Search for Madoff's Billions Leads to Switzerland, Africa

February 20, 2009— -- Two suspect entries in excess of $5 billion in the books of confessed fraudster Bernard Madoff have given investigators hope they may be on the trail of some of the money he allegedly stole in what has been called the world's largest financial fraud.

One trail involves secret accounts set up in Switzerland and at an obscure bank in Africa, investigators and lawyers in the case told ABC News.

The investigators and lawyers also tell ABC News that Madoff may have used the name of a dead client, Norman Levy, as well as the prominent Picower Foundation to disguise transfers of more than $10 billion to secret accounts he set up overseas.

Watch the full report Friday on World News with Charles Gibson at 6:30 p.m. ET and 20/20 at 10 p.m. ET

A lawyer who represents both the Levy family and the Picower Foundation, William Zabel, said neither had ever received a $5 billion disbursement or anything close to that amount.

In fact, Zabel said, both families lost millions invested with Madoff. The Picower Foundation and a foundation now run by Levy's family were both forced to close because of their losses.

Investigators caution that the leads could prove to be difficult because Madoff has yet to fully cooperate in the search for the missing billions or in revealing who else may have been involved in the massive fraud.

"Everything he says is a lie, and we can't count on the veracity of any of his statements or his books," said one of the investigators who has seen the documents. "These five billion dollar entries could also be the way he balanced his books for his losses," said the investigator.

In his confession to the FBI in December, Madoff said he acted alone and that all of the money was gone, that "nothing was left."

EXCLUSIVE VIDEO: Madoff Under House Arrest at his Penthouse

Despite his lack of cooperation, Madoff remains under a luxurious house arrest in his multi-million dollar Manhattan apartment.

With his window shades up, ABC News cameras saw him spending hours on his computer, appearing to be on the internet, and at other times talking into the computer. There is no restriction on his use of the computer or on computer phone connections, such as Skype.

Watch EXCLUSIVE video of Madoff under house arrest in his luxurious penthouse.

The new developments in the search for the missing money come as victims attended a briefing Friday in New York by the court-appointed bankruptcy trustee for the Madoff business, Irving Picard.

Sharing the Pain: Investors Might Now Owe Money

Angry and distraught former investors of Madoff gathered today to receive even more bad news on the hunt for their lost money. Investors may be asked to return past profits they made with Madoff, even if they lost their remaining investment with Madoff. Lawyers for the investors say Madoff did not make any trades on behalf of his clients, that the entire business was a Ponzi scheme.

"We will be seeking to recover false profits from those who received them in substantial amounts," said attorney David Sheehan, who is working with the court-appointed trustee overseeing the liquidation of Madoff's assets.

"There was no stock bought and sold. It was all just made up," he said. "You have to realize you got somebody else's money."

Investors expressed a range of emotions from anger to fear to frustration.

"I'm on food stamps, and I may have to move into my car, said Miriam Siegman. "There are moments of total fear and despair."

Siegman said she is upset the SEC did not step in sooner to save investors. "I don't care about Bernie Madoff, but I am infuriated with our government. The SEC and all of the regulatory bodies who knew about this, and could have done something, but didn't."

Another investor, Ron Weinstein from Manhattan said he knew Madoff personally. "He was an unassuming, very nice guy. I feel like I was a very poor judge of character. I feel he's sick. He's a psychopath. Of course I'm mad," said Weinstein. "And he appears not to care. He appears just not to give a damn."

A fund will be set up for returned and recovered assets and an attempt will be made to distribute the money equitably among investors, or as Sheehan put it, investors will be "sharing the pain."

Picard, said $950 million in cash and securities has been recovered so far. Picard stressed that his fees would not be paid from any monies recovered. Those fees would come from the Securities Investor Protection Corporation, which will also cover the first $500,000 of each investor's loss.

Investigators say they are leaving no stone uncovered in their search for Madoff's potential accomplices.

"There isn't anybody who is not on the table in terms of who we are investigating," said Sheehan. We are looking at every family member in the Madoff family and every insider."

Picard said his office has received 2,350 claims from angry investors and he expects that number could soon double. Picard would not speculate on how much of the $50 billion can or will be recovered. So far the claims add up to around $1 billion. The deadline to submit a claim is July 2, 2009. Picard expects to sell Madoff's legitimate broker business in the next couple of weeks which should yield more substantial monies for the fund.

Hollywood A-Listers Among Victims

The list of victims continues to grow, including one of the nominees up for an Academy Award this weekend.

Screenwriter Eric Roth, nominated for "The Curious Case of Benjamin Button" reportedly lost most of his savings to Madoff. Roth declined to talk with ABC News.

Other Hollywood figures such as director Steven Spielberg, executive Jeffrey Katzenberg, and actor Kevin Bacon are also among Madoff's victims.

More tragic are the cases of elderly people who will have no chance to earn back their lost investments.

92-year old Zsa Zsa Gabor is one of them. Gabor, who is wheelchair bound, did not want to talk to ABC News cameras, but her husband Prince Frederick Von Anhalt said the couple lost their $10 million life savings to Madoff.

"Some people, like Spielberg and those people, naturally have hundreds of millions," said Anhalt, "so if they lose $50 million, so what? It's a write off for them. But for us, $10 million it's a lot."

Anhalt is furious that Madoff continues to reside in his penthouse and resists cooperating with the investigation.

"I want to see him go down," Anhalt told ABC News. "He should be in jail."

Madoff May Have Used European Clearing House to Move Money

Investigators, who declined to be named because they were not authorized to speak publicly, said Madoff may have moved money through a European clearing house, Clearstream, Inc.

A spokesman for Clearstream in Luxembourg said there was no record of an account held by Madoff but did not rule out he could have been one of the international "counterparties" authorized to receive funds through Clearstream.

Investigators say they will know more about the possible transfers once the books from Madoff's London office are turned over to authorities.

Asa Eslocker contributed to this report.

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