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Accounting sleuths on the trail of Madoff money

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Many large accounting firms, too, have accountants who specialize in tracing missing money. Several smaller firms specialize in cases such as the Madoff swindle. Lawyers who represent the investors – charitable institutions, European banks, and individuals who lost their nest eggs, will be hiring some of them.

The work is not easy, say those who've worked to trace Ponzi-scheme money.

"I imagine there will be many, many layers of transactions," says Ken Yormark, managing director and forensic accountant at LECG, consultants in New York. "I would be surprised if we don't find [Madoff] has money someplace other than the US, since he took trips overseas on a regular basis."

Crumbley compares the work to eating a bowl of spaghetti. "You look at a strand and don't know where it starts and ends."

He says it's also like searching for rare coins in a garbage dump using a metal detector. "You will get a lot of false hits."

Forensic accountant Mike Kessler of Kessler International in New York says he usually starts at the end and works his way back to the beginning. "You track the money going backward," says Mr. Kessler.

Mr. Yormark likes to follow "the flow of the funds," which he says usually leads to where the funds have been used.

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