Bernard Madoff and $50 billion US.

His name and that number have become inseparable in describing the enormity of what has been called the largest white-collar fraud in history. It's a figure that has helped demonize Madoff and relegate big-time money managers charged in subsequent securities schemes to mere "mini-Madoff" status.

Investigators claim Madoff himself told them that he stole $50 billion, but it is becoming increasingly clear that the number may be as fictitious as the sprawling fraud he allegedly ran.Bernard Madoff walks to his New York City apartment on Dec. 17, 2008. (Don Emmert/AFP/Getty Images)

A growing number of people involved in the case and outside observers are saying that the actual loss to investors could be far less than the mind-boggling total often treated as fact. The actual number is not known at this point, but some believe it's less than $20 billion.

"I'd be pulling a number out of the air," Stephen Harbeck, president of the Securities Investor Protection Corp., told The Associated Press this week when asked how much money he thought was swindled.

Harbeck said he believes the $50 billion estimate is unreliable because it "includes entirely fictitious profits" that Madoff said he brought investors over the years. Even the $17.1 billion that the Securities and Exchange Commission recorded last year as being held by Madoff Investment Securities LLC — once thought to be the legitimate side of his operation — "does not appear to reflect reality," he added.

"I think it's somewhat misleading to say this was a $50 billion scheme because I believe that includes the fictitious profits," he said Thursday. "If that is the case, and I believe it to be the case, then the real dollars lost would be considerably lower."

Madoff, 70, was arrested late last year, a day after meeting with his sons and telling them that his secretive investment advisory business was "basically a giant Ponzi scheme," a criminal complaint said. He "estimated the losses from this fraud to be at least $50 billion," the complaint said.

The disgraced financier remains under house arrest in his Manhattan apartment while the FBI, the SEC and a court-appointed trustee labour to measure the true scope of the fraud. The Securities Investor Protection Corp., an industry-funded organization that steps in when a brokerage firm fails, has been helping process hundreds of claims by investors hoping to recoup losses.

'Unprecedented Ponzi scheme'

"It's an unprecedented Ponzi scheme, but the extent of it we'll know once the claims are filed," Harbeck said.

It remains unclear how much investors will ultimately say they're owed. They have until July 2 to file claims with the trustee.

A spokesman for a court-appointed trustee overseeing the liquidation of Madoff's operation said Thursday that so far only about $1 billion in assets have been recovered.

In the weeks after Madoff's arrest, various news organizations and other groups began compiling a list of Madoff losses that totalled around $30 billion. Those estimates were based on a list of institutional and individual investors and how much they lost — sometimes in the billions.

But it's likely those estimates were based on monthly statements that investigators say were fabricated, said Alan E. Weiner, a partner in Holtz Rubenstein Reminick LLP, a Long Island accounting firm.

'Just threw out'

The $50 billion "appears to be a number that [Madoff] just threw out," Weiner said. "It could be the total value on all the fallacious statements. I don't think it represents the cash that people put in."

Former SEC head Harvey Pitt agreed that Madoff "probably inflated the amount of money he had under management." He predicted the actual loss would fall below $17 billion.

"But there's no question the amounts are probably north of $10 billion and that's a lot of money by anyone's reckoning," he said at a recent forum on the case.

Even $10 billion would eclipse other alleged fraud cases of late. They include that of Florida hedge fund manager Arthur Nadel, accused of bilking investors out of up to $350 million, and Mark Dreier, a prominent lawyer charged with stealing $400 million in a hedge fund scam. Authorities believe Texas billionaire R. Allen Stanford perpetrated an $8 billion investment fraud.