Madoff money chase offers long road, little reward

By Gina Keating and Grant McCool

LOS ANGELES/NEW YORK (Reuters) - Everyone caught up in the scandal of accused Wall Street swindler Bernard Madoff wants to know where the money is.

Madoff, who authorities say confessed to losing $50 billion in "a giant Ponzi scheme," has given a list of his assets, liabilities and property to U.S. regulators.

But the thousands duped, from the beach cities of Florida to yacht clubs of the Mediterranean to Hollywood and Manhattan, may never see it. And judging by the scandals involving Bayou Group hedge fund, WorldCom and Adelphia Communications, any money they may see down the road will likely be a fraction of what they invested.

"We have received many calls from people and everyone is saying 'where did the money go?' because he obviously didn't use it all," said Craig Stein, an attorney in Boca Raton, Florida.

"If you add up all of the firms and entities and brokers that were making commissions and compensation off of the promotion or facilitation of the money to Madoff, I bet you will find a very large number there, an economy of its own," Stein said.

Stein said he is investigating on behalf of two clients whose money in Westport National Bank of Connecticut ended up with Madoff. The bank said it provided only custodial services and did not invest any of its own money with Madoff or introduce anybody to Madoff.

The U.S. Securities and Exchange Commission, which received the assets list from Madoff's lawyers on Wednesday under a court order, will not publicly disclose the information. It will become part of its investigation following Madoff's December 11 arrest in New York.

U.S. prosecutors are conducting a parallel criminal investigation after charging Madoff with securities fraud.