In a criminal complaint filed against the 70-year-old Madoff, prosecutors said Madoff stated "in substance, that he had personally traded and lost money for institutional clients and that it was all his fault."

But many members of the financial community are skeptical that Madoff could have single-handedly maintained accounts for the fictitious investment scheme involving tens of billions of dollars and a multitude of clients.

"It doesn't seem to me that a 70-year-old man can do this by himself, nor can he do it simply in conjunction with his accountants," said Doug Kass, founder and president of Seabreeze Partners, a fund that uses "short" sales in an effort to benefit from falling share prices,

"It's a rather extensive scheme, an extensive fraud. It's impossible for it to be a one- to five-person event."

Madoff was arrested December 11 and charged with massive fraud. He has been under house arrest with electronic monitoring.

The list of victims is already staggering, ranging from a charity run by Hollywood mogul Steven Spielberg to Japanese bank Nomura and European banks, where exposure ran into the billions of dollars.

The Justice Department complaint indicated senior employees of Madoff's firm said the accused ran his adviser business from a separate floor in his New York offices.

One employee told investigators that Madoff "kept the financial statements for the firm under lock and key," and stated that Madoff was "cryptic" about the firm's investment advisory business, the complaint said.

Mace Blicksilver at Marblehead Asset Management said however that it was "unthinkable that he could orchestrate such a scheme by himself."

"Theoretically he wasn't trading the money, he was just running this giant scheme," Blicksilver told AFP.

"He was secluded in his own office. I guess it's easy enough to gin up the documentation if you have nothing to do in your office all day. All these documents, they're just a piece of paper."

If Madoff did not act alone, who helped?

Speculation is mounting about potential accomplices in what may be the biggest investment fraud of all time.

One possibility is Madoff's family. His sons, Andrew and Mark, worked with their father but were believed to have alerted authorities. Other family members who worked with Madoff included his brother Peter Madoff.

Some reports say the probe may also look at the tiny audit firm Friehling & Horowitz, and a longtime Madoff aide Frank DiPascali.

The Securities and Exchange Commission is investigating internally how the watchdog failed to react to almost a decade of warnings about Madoff.

The probe will "include all staff contact and relationships with the Madoff family and firm, and their impact, if any, on decisions by staff regarding the firm," said SEC chairman Christopher Cox earlier last month.

One issue likely to be examined will be Madoff's niece, Shana Madoff, who married former SEC attorney Eric Swanson in 2007.

Ralph Silva, a London-based analyst at the consultancy Tower Group, said that whether or not Madoff acted alone, he was able to benefit from the "presumed trust" of clients.

"Banks in Europe have always put a lot of trust in their competitors and if a product has been purchased by a trusted competitor, the bank presumes the product has been checked and passed the criteria of the first bank to buy it," he said. "Therefore, they don't check the all details themselves."

David Kotok at Cumberland Advisors said Madoff's investment scheme broke many ethical rules because it had no internal controls.

"Madoff required that investment management, brokerage, and custody all be with him under the same roof," Kotok said.

"Placing investment management, custody, and brokerage in one institution and agreeing to opacity about the activity is viewed as the riskiest structure by skilled professionals. How their lawyers and accountants and advisers allegedly sanctioned that decision also triggers many questions."

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