The $50 billion Bernie Madoff Ponzi scheme had some breaking news yesterday... A list of investors was released for public consumption. And naturally, all eyes were on the celebrities listed.

Some names came as no surprise. Actor Kevin Bacon already publicly stated that most of his family's money had been invested with Madoff and he's now desperate to work. Zsa Za Gabor admitted a couple of weeks ago that she had at least $7 million invested with Madoff.

Yesterday's list highlighted some new celebrity names: Henry Kissinger's family and foundation, John Malkovich, and Larry Silverstein are among the many names on the 162-page list.

As a fraud investigator, I've been asked by many people about the Madoff scam. How could people invest so much money with him and not do their due diligence first? You have to remember that many of the people on the list were investing hundreds of thousands or millions with Madoff, but that money represented only a fraction of their wealth.
It's kind of like me investing $1,000 or $5,000 with someone. Sure, I hope they do a good job with my money and I'll do a bit of investigating before turning over the money. But that's not the bulk of my net worth, and I'm not going to spend hours or days researching the investment opportunity. It's all relative.

So yes, people lost a lot of money with Madoff. But there's a reasonable explanation why many of them may not have paid all that much attention to that investment. Besides.... Madoff came with and excellent track record, good credentials, and plenty of endorsers. Trusted people recommended Madoff, and they had every reason to. They thought he had done well managing money for decades.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Expert Fraud Investigation: A Step-by-Step Guide.