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Judge Ronald Ellis must decide whether Mr Madoff's activities warrants the revocation of his $10 million bail.

Thousands of investors who lost their savings through Madoff's company have been told it will be at least a month before they get any of their money back.

Stephen Harbeck, president of the Washington-based Securities Investor Protection Corp (SIPC), said some investors could be repaid "in a month or two". But he also warned that others would have to wait considerably longer if the missing Madoff cash proves hard to trace.

"You're talking about unscrambling an egg," Mr Harbeck said in an interview yesterday.

SIPC, which is funded by its membership of broker-dealers, has a mandate to return up to $500,000 each to individual investors who held accounts with Mr Madoff's securities firm during the last 12 months.

Irving Picard, the trustee appointed to unwind Mr Madoff's company and locate the missing funds, sent out 8,000 claim forms in partnership with the SIPC last week. Mr Picard has uncovered about $830 million in cash in the company so far and about $850 million in liquid assets.

The SIPC has just $1.6 billion with which to compensate investors but can ask Congress for additional funds to meet payment demands.

Mr Shapiro first invested with the 70-year-old Mr Madoff in 1960, when he entrusted the then-fledgling fund manager with thousands of dollars to place on his behalf.

He was one of Mr Madoff's oldest friends and the two frequently lunched together. Mr Shapiro has personally lost an estimated $400 million in the alleged fraud, including the $250 million, and his charitable foundation a further $100 million.

Shortly before his confession, Mr Madoff told his sons that investors had made $7 billion in redemption requests on his funds and that he was having trouble putting together the cash.

It is thought that he made an attempt to gather enough money to meet the redemptions by fleeceing a final round of victims.

One investor, Martin Rosenman, gave Mr Madoff $10 million just six days before he was arrested.

A host of celebrities, including the American acting star Kevin Bacon and Henry Kaufmann, the former chief economist at Salomon Brothers, have lost money in the scandal.

It also emerged that Credit Suisse, a Swiss banking group, was advising its clients to withdraw funds from Mr Madoff’s firm more than eight years ago.

Credit Suisse, which operates a big private banking network, began telling its clients that there was uncertainty surrounding the way the firm made profits after meeting Mr Madofff in June 2000, according to Bloomberg.

Credit Suisse’s clients lost almost $1 billion in the scandal, but had withdrawn about $250 million in the wake of the bank’s advice, the news agency said.

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