In the weeks after Madoff's arrest, various news organizations and other groups began compiling a list of Madoff losses that totaled around $30 billion. Those estimates were based on a list of institutional and individual investors and how much they lost—sometimes in the billions.
But it's likely those estimates were based on monthly statements that investigators say were fabricated, said Alan E. Weiner, a partner in Holtz Rubenstein Reminick, a Long Island accounting firm.
The $50 billion "appears to be a number that (Madoff) just threw out," Weiner said. "It could be the total value on all the fallacious statements. I don't think it represents the cash that people put in."
Former SEC head Harvey Pitt agreed that Madoff "probably inflated the amount of money he had under management." He predicted the actual loss would fall below $17 billion.
"But there's no question the amounts are probably north of $10 billion and that's a lot of money by anyone's reckoning," he said at a recent forum on the case.
Even $10 billion would eclipse other recent fraud cases. They include that of Florida hedge fund manager Arthur Nadel, accused of bilking investors out of up to $350 million, and Mark Dreier, a prominent lawyer charged with stealing $400 million in a hedge fund scam. Authorities believe Texas billionaire R. Allen Stanford perpetrated an $8 billion investment fraud.
The Nadel case demonstrated the ripple effect of the avalanche of publicity around the purported $50 billion scam: Investigators say Nadel's crimes were exposed when his partners, spooked by the Madoff case, asked for an independent audit of the defendant's business.
Similarly, a New Jersey fund manager, James Nicholson, was arrested last week in yet another alleged scheme that fell apart after several leery investors tried to redeem their money. Prosecutors say his fraud could reach $900 million—a size that might have dominated headlines, pre-Madoff.
In Madoff's case, the portrayal of him as a monster-size fraudster has led to enough fears about his safety that it was his lawyers who first sought 24-hour protection for him while he remains under house arrest.
Some of the heat has even fallen on his lawyer, Ira Sorkin, who said he has referred two death threats against himself to the FBI and has been subjected to more than a dozen vicious e-mails and phone calls.
Ron Kuby, a lawyer who in the 1990s once represented a blind Egyptian sheik charged with trying to overthrow the U.S. government, said the threats come with the territory.
"I'm sorry. I'm playing the world's smallest violin," he said. "I used to get hundreds of those. I got actual letters, hundreds of them, and phone calls saying lovely things like, 'I'm sorry Hitler missed you.'"