The method adopted by Madoff is called a Ponzi scheme in which early investors are paid off with the money of new ones.

The development re-echoed a similar saga that assailed Nigeria's financial sector in the late 80s and in the last quarter of last year.

Presiding Judge Denny Chin ordered him remanded in jail until his sentencing on June 16. "He has incentive to flee, he has means to flee, and he is a risk of flight," Chin said.

Madoff was handcuffed and led out of court by U.S. marshals.

In a hearing that lasted more than an hour, Madoff described a long-running scheme he knew from the beginning was "criminal and wrong" but hoped would end shortly. As he became more deeply engaged in the fraud, "I realised that my arrest and this day would inevitably come," he said in court where victims of his Ponzi scheme later spoke.

"I am painfully aware that I have deeply hurt many, many people," including his family, friends and associates, Madoff said.

Speaking for 10 minutes, Madoff said he was "grateful" for the opportunity to address the court and "deeply sorry and ashamed" of his actions.

Madoff, who stood to the left of his lawyer, hands draped at his side, admitted to securities fraud, investment adviser fraud, mail fraud, wire fraud, three counts of money laundering, false statements, perjury, false filings with the U.S. Securities and Exchange Commission and theft from an employee benefit plan.

His investors included hedge funds, banks, Jewish charities, the wealthy, and small individual investors in North and South America and Europe. The magnitude of the fraud shocked the public and drew demands for stricter regulations.

A number of Madoff's victims had said they opposed his guilty plea, because they wanted the case to go to full jury trail so they could find out exactly what he had done with the money.

One of Madoff''s victims, Burt Ross, a former mayor of New Jersey town, Fort Lee, told the British Broadcasting Corporation (BBC) he did not expect to recover a single cent of the $5 million he invested.

"Bernard Madoff is a genius," said Mr. Ross. "You're dealing with the greatest con artist probably in the history of the world.

"He created a mystique and associated with extra-ordinarily well-respected and revered people, and so he was given the benefit of the doubt by financial regulators who blew it badly."

Investigators say they are continuing efforts to recover all the money Madoff has stolen, but most commentators - and most of his investors - say it is highly unlikely that any more than a very small amount will be found.

Mark Raymond, a lawyer representing some of Madoff's victims, said it would be wrong to think of them all being multi-millionaires.

Despite widespread press coverage of famous names and a wealthy elite, Mr. Raymond of a law firm, Broad and Cassel, said many were normal working people, including a retired couple from Atlanta.

"He's 82, she's 78, and they are both looking for work because they have lost everything," he said.

In Nigeria, in the late '80s, one Mr. Umanah Umanah initiated the country's first known financial scam popularly referred to as "wonder banks", when investors' confidence was fraudulently raised under a harvest scheme of "Jumbo interests" on investments.

The phenomenon was re-enacted last year, when about 30 of such "wonder banks" were detected to be operating within the system.

The Investments and Securities Tribunal on the request of the Securities and Exchange Commission closed down the "wonder banks."

The SEC had initiated the suit in November 2007, on the grounds that the wonder banks solicited, advertised and invited members of the public to deposit funds, with a promise of paying as much as 500 per cent returns within one operational week.

The capital market regulator also sought a declaration that the deposit of money with them by the public for a fixed period and bearing interest was illegal and an order of the tribunal stopping them from continuing to do business as fund managers, among other reliefs.

Following the submission of SEC's counsel, the tribunal in December 2007 issued an interim order freezing the accounts of the companies pending the determination of the case.

The SEC clampdown last year resulted in billions of naira being trapped in the fund managers' accounts with banks.

Hundreds of depositors lost money as the operators of the wonder banks closed shop and disappeared. Some depositors in Ibadan reportedly committed suicide.

Meanwhile, an investment manager has attacked U.S. regulators for failing to act on his tip-off about Madoff's alleged $50 billion (£33 billion) fraud.

Harry Markopolos told a Congressional hearing that the U.S. Securities and Exchange Commission (SEC) had not been willing or able to uncover the fraud.

U.S. lawmakers then accused SEC officials of blocking their investigation by failing to answer questions.

One official said she could not comment in detail due to an on-going probe.

SEC enforcement director, Linda Thomsen, said there were confidential areas related to the investigation that could not be publicly discussed.

Markopolos, who said he had tried to get regulators to probe Madoff from 2000, called SEC officials "too slow, too young and too under-educated" to catch the alleged fraud.

"They looked at the size of Madoff and said he's a big firm and we don't attack big firms," he said.

He also said he was planning to turn over the names of "feeder" funds that helped Madoff raise money, to prove that he had not acted alone.

The testimony sparked angry questions from lawmakers, and frustration when they were not answered.

"We thought the enemy was Mr. Madoff, I think it was you. You were the shield," said New York Democrat Gary Ackerman.

SEC officials did, however, say that there would be changes following the Madoff case, including how often investment advisers were examined.

Earlier, the liquidator of Madoff's investment firm said almost $950 million (£657 million) had so far been recovered.

This figure is less than two per cent of the total amount Madoff is accused of defrauding from his investors.