Claim Madoff acted alone meets skepticism

By Grant McCool and Martha Graybow

NEW YORK (Reuters) - Could the Bernard Madoff scandal -- alleged to be the biggest-ever Wall Street scam -- really have been the act of just one person? Fraud experts say they think it's impossible.

White-collar crime experts who are following the Bernard Madoff case say they doubt that the money manager, who authorities say has confessed to the fraud as "all his fault," could have carried out such a massive scheme alone.

They say that based on their experience investigating complex financial cases, the suspected $50 billion fraud was too lengthy and involved too many phony documents to have been carried out by only one individual.

No charges have been brought against anyone except Madoff, who was charged with securities fraud on December 11. He has not formally responded to the accusations in court.

Authorities are continuing to investigate. A lawyer for an accountant at the small auditing firm that Madoff used, Friehling & Horowitz in a suburb of New York City, told Reuters that his client had received a subpoena from federal prosecutors requesting documents.

"He is going to comply with that subpoena," attorney Andrew Lankler said of his client, accountant David Friehling.

The U.S. Attorney's Office in New York, which is prosecuting the case, has declined to comment on the probe.

Legal experts not involved in the case, including fraud investigators and former federal prosecutors, say it is hard to believe no one else associated with Madoff knew of the suspected scheme.

"PREPOSTEROUS"

"His claim that he was the only one involved is preposterous," said James Ratley, president of the Association of Certified Fraud Examiners in Austin, Texas.

"The amount of transactions, the number of dollars that are involved in the Ponzi, I just don't see any way he could be the only one involved," Ratley said.

A Ponzi scheme is one in which early investors are paid with the money of new clients. Ponzi schemes collapse when a large number of redemptions are requested and investors have not put in enough funds to cover them.

Madoff's investors say they received detailed financial statements over many years showing consistently high returns. His purported investing success drew a worldwide clientele.

Carrying out such a detailed scheme "is not doable on his own," said Ellen Zimiles, a former federal prosecutor who is chief executive officer of Daylight Forensic & Advisory LLC, a New York firm that works with corporations on compliance.

"That process alone of managing the statements is not a one-person job, and certainly not a person who is going from Palm Beach to Nice to Abu Dhabi," she said.