Personal items on display include a brusque, hand-written jailhouse note of apology Madoff wrote to his son Andrew after his other son, Mark, committed suicide in 2010.
Other items in the exhibit include the master key that opened all the doors at the Bernard L. Madoff Investment Securities offices at 885 Third Ave.; a business card for Madoff's original office at 110 Wall St.; andhis wooden snake from his yacht "Bull."
The exhibition aims not to sensationalize Madoff's crime but to educate and dispel misconceptions about the case. While much of the public thinks all the Madoff victims were millionaires able to absorb the loss, the fact is that some of the victims were just small individual investors.
Among them was a retired teacher, who donated one of her Madoff account statements to the museum. "She wasn't wealthy. She now has nothing," Vaccarello said.
(Read More: 'Frustrated' Madoff Now Second-Guessing His Guilty Plea)
Although 4,500 people directly invested with Madoff, 13,000 were impacted globally through third-party feeder funds. Most of the firm's 180 employees were also unaware of the illegal portions of the business, yet they've been tainted by association, Vaccarello said. "Try having that on your resume. Many are still unemployed today," she said.
Normally the museum waits at least two years after a big crime to determine how to handle its addition to the museum, but they started early on this one due to demand. "He was someone that people wanted to see right away," Vaccarello said.
The public's fascination is not just with the crime itself, but the why, and whether he ever showed remorse. "It's hard for people to understand how people can be so bad," Vaccarelolo said. "People want to know not just about what they did, but how they could be so bad."
On Dec. 11, 2008, Madoff and his investment firm were charged with securities fraud in a multi-billion dollar Ponzi scheme, the biggest in U.S. history. In June 2009, he was sentenced to 150 years in prison and other members of his staff today are still fighting charges related to the crime.
(Read More: Madoff, in Christmas Eve Letter, Says Insider Trading Has Gone on 'Forever ')
The small Madoff exhibit has taken up permanent residence in the Frauds section of the Crime Museum, which also features ex-conman Frank Abagnale of "Catch Me If You Can" fame. The museum covers a broad range of American criminals from pirates to mobsters and features a CSI lab model, a simulated FBI shooting range, a high-speed police simulator and a stage set from "America's Most Wanted" used by museum partner John Walsh.
Should the Washington museum seem a little too out-of-sight, out-of-mind for the Wall Street crowd, New York has its own local installation. Madoff's crimes have already been featured in two exhibits at Wall Street's Museum of American Finance: "Tracking the Credit Crisis" and "Scandal!"
—By CNBC's Amy Langfield; Follow her on Twitter @AmyLangfield