Bernie Madoff may be just starting his 150 years inside jail, but the hunt for the missing millions is just hotting up.

And the trustees – led by Irving Picard – of the Madoff fraudulent investment scheme are working hard to try and find every million and every cent.

Madoff’s wife Ruth has handed over a cool $21 million of jewellery and two fur coasts worth nearly $50,000. Whereas Ezra Merkin, the philanthropist who did a lot of leg work for Madoff and made many of the introductions to some of the richest people in the world, has ‘contributed’ $120 million from an art sale after being put on the spot by the New York attorney-general.

But this is a drop in the ocean to what is owed to the hundreds of investors. What makes it worse of course, is that the figures are not altogether clear. According to statements being sent out by Madoff to his investors, the investment scheme had a cash pile of a staggering $65 billion. But these accounts were largely fictional, as the scheme was a classic pyramid operation. Money coming in was paid out to those who had joined the scheme early. This works for as long as the money keeps steaming in – once it slows, trouble starts and the pyramid eventually topples over. And when it emerged that the scheme was an elaborate hoax, the money available in the accounts was derisory.

But Picard has managed to swell the coffers to just over a billion dollars as he and his team work hard to recover the Madoff assets. Although he hasn’t won fans amongst all the swindled investors, calculated that the fund’s net losses are nearer $13 billion, rather than the often quoted $65 billion. He arrived at this figure by calculating the amount people put into the fund, rather than the amount people’s investments have apparently grown in the fictional accounts. And he will calculate individual losses on that calculation, also considering whether they had actually benefitted from their investment and withdrawn money.

This decision has proved very unpopular with large numbers of investors who feel they have been cheated from large sums which were stated in their personal accounts from the fund (mostly fictitious of course). A number of lawsuits are planned and some have actually been filed against Picard.

But there are bigger issues at play. The trustees are trying to claw back money that was withdrawn in up to the last six years of the fund’s existence – something provisioned for in law, but not easy. Top of the list are the institutional investors who had the role of feeder funds, putting their clients money into the Madoff scheme. And if this is successful, it may well be that a total of $10 billion can be retrieved, although it may well take some years of legal wrangling.

In terms of official compensation, those who paid directly into the Madoff scheme can claim £500,000; for those that paid in indirectly, via the feeder funds and often unknowingly, a figure has yet to be decided.

In terms of legal prosecutions, Madoff has made the headlines, but only his accountant is currently facing charges. But expect more to follow as those in charge of many of the feeder funds could face the wrath of the law and a stripping of their assets, which could go towards the original investors.

Madoff and his wife have agreed to give back everything they own, apart from $2.5 million in cash for Mrs Madoff. This included numerous houses, cars, yachts and $45 million in bonds and a further $17 million in cash. Good news, but still a small amount considering the total lost.

This is just the start of the hunt of course and one thing is for certain, it will make many lawyers rich for decades to come.

Guest Article by Neil Camp