Evidence emerged that Madoff's alleged multi-billion-dollar fraud stretched from Tokyo to Europe to top US investors, all of them apparently unaware until the broker's arrest last Thursday that they were being conned.
Prosecutors allege that Madoff, a decades-long veteran of Wall Street and pillar of the US financial community, confessed to losing at least $75 billion in the so-called Ponzi scheme, or pyramid fraud.
US newspapers detailed how Madoff, 70, traded on his impeccable reputation and access to exclusive country clubs to cultivate A-list investment clients including big banks, hedge funds and individuals.
The Securities and Exchange Commission alleges he delivered consistently strong returns by secretly using the principal from new investors to pay out to other investors.
As long as he could attract new investors the alleged scheme worked.
The plot appears to have unraveled when clients asked to withdraw their principal — as they have been doing from hedge funds worldwide — only to discover that Madoff's seemingly brimming coffers were empty.
According to The Wall Street Journal, investors facing losses include French bank BNP Paribas, Tokyo-based Nomura Holdings and Zurich's Neue Privat Bank.
Spanish newspapers reported that a fund run by leading bank Santander was heavily exposed and that investors in Spain risk losing some $4.5 billion.
Swiss bankers face losses of up to $7.5 billion, Geneva's Le Temps newspaper said.
The report said that Union Bancaire Privee, a major asset management institution specializing in hedge funds, could be exposed to the tune of $1.5 billion.
UBP refused to comment on the report, which said that 90 percent of fund management companies operating in Geneva invested in Madoff products.
Top-drawer US investors who were taken in included the former owner of the Philadelphia Eagles American football team Norman Braman, according to news reports.
Hedge funds are likely to take an especially big hit because Madoff was handling money for several companies raising money for such funds, the Journal said.
"I'm wiped out," the Journal quoted Sandra Manzke, chairman of one such company, Maxam Capital Management, as saying after reporting $425 million in losses.
The New York Times reported that a hedge fund advisory firm, Fairfield Greenwich Group, had invested $11 billion with Madoff.
As federal investigators poured over the books at Bernard L. Madoff Investment Securities LLC, the Times highlighted the apparent lack of oversight through the years of what appears set to be Wall Street's record-sized fraud.
Despite Madoff's amazingly high and consistent returns and the fact that a relatively unknown accounting firm was doing his audits, the Securities and Exchange Commission "appears to have been completely surprised,"(RUBBISH!!!) the Times wrote.
"Despite these and other red flags, hedge fund companies kept promoting Mr Madoff's funds to other funds and individuals," the Times wrote.
Among those recruiting investors on Madoff's behalf, the Times reported, were Japan's Nomura.
The debacle has "swept up some of the most prominent and wealthy Americans, along with many people who thought they were embarking on a comfortable retirement and have now been left destitute," the Journal quoted a lawyer for another victim, Milberg LLP, as saying.