Mass of questions follow Madoff jailing

Jailing Bernard Madoff after he confessed to running a gigantic fraud was the easy part.

Now investigators need to find out who helped him and where the money he stole disappeared.

US prosecutor Lev Dassin promised action Thursday after Madoff pleaded guilty, apologized and was taken into pre-sentencing custody.

"We are continuing to investigate the fraud and will bring additional charges against anyone, including Mr Madoff, as warranted," Dassin said in a statement.

But Madoff's guilty plea meant there was no trial and this worries some of his thousands of victims.

"If there will not be a trial ... a lot of this information that people want to hear about, whether there are other members of his family involved, employees, where the money is offshore -- much of that may not come to light," victim Richard Friedman said on CNN television.

Dassin rejected "speculation" that the government had agreed to some form of leniency in exchange for Madoff admitting his crimes. "There is no agreement whatsoever," Dassin said.

However, victims are not all convinced the government will get to the bottom of the scam.

For decades, the Securities and Exchange Commission failed to uncover Madoff's enormous fraud, even ignoring compelling evidence from whistle blowers.

There is also growing frustration that Madoff remains the only person charged in what prosecutors call a scheme of "unprecedented" proportions.

While Madoff pleaded guilty to 11 counts, not one involved conspiracy, something that would immediately have flagged that investigators were closing in on other suspects.

Victim Lenore Schupak, 55, told AFP that Madoff had to have accomplices.

She said Madoff mounted a huge -- and clearly labor-intensive -- charade to make clients believe he was investing, not stealing, their money.

"I never suspected a thing," said Schupak, an environmental engineer who as one of the smaller Madoff clients invested several hundred thousand dollars, all now gone.

"We got detailed transaction slips. Not just statements. It was very, very official. We had statements that itemized everything. These were all very good stocks, 35 blue chip stocks."

The media spotlight is falling increasingly on Madoff's family and close colleagues -- wife Ruth, brother Peter, and sons Mark and Andrew.

On Thursday, Madoff sought to build a firewall around them, telling the court they worked for parts of his empire that were separate to his illegal activities and were "legitimate, profitable and successful."

But tracking down culprits is only half the battle for investigators, who must also find out how much money Madoff took, where it vanished and how to get it back.

Prosecutors say that shortly before his arrest Madoff reported he was managing about 65 billion dollars, whereas in reality he held only a "fraction" of that amount.

In total, prosecutors are seeking to recover 177 billion dollars from Madoff. No one has said where this money might be. Madoff's lawyers call the figure wildly inflated.

Further muddying the waters is the fact that Madoff paid fake profits to clients by stealing money from fellow clients. These investors then paid taxes.

Madoff victims say they should be reimbursed taxes that would never have been paid had the authorities done their duty in uncovering Madoff's scheme.

Current laws allow three years of taxes to be amended, but Madoff's fraud stretches back to the 1980s.

"Madoff investors paid in hundreds of millions, if not billions of dollars in income taxes on phantom income that never existed," Friedman said.

Initial indications are that the government -- already struggling to refloat a tanking US economy -- is not in a mood to listen.

"Because of the nature and length of the scheme, victims may recover only a small fraction of their losses," Dassin warned.

Many say they don't have time to wait for the wrangling to end.

Schupak said she'd had to sell her home in Florida and was now living with her sister in New Jersey.

"We were paying taxes on money that didn't exist. We paid a fortune," she said. "This is money we need to live on."