Damage continued to ripple from the massive fraud allegedly engineered by storied Wall Street money manager Bernard Madoff, even as investigators continued on Monday trying to unravel the scheme's working and its reach.

While details remained sketchy, the sudden collapse of Madoff's firm last week began showing an impact far beyond the world of the ultra-wealthy. The firm's extensive dealings with charitable foundations and other groups suggested the fraud could take a toll in unexpected places.

The 70-year-old Madoff, well-respected in the investment community after serving as chairman of the NASDAQ Stock Market, was arrested on Thursday in what prosecutors say was a $50 billion scheme to defraud investors.

Wiped out

Some investors claim they've been wiped out, and it is thought more are yet to come forward.

Late on Monday, a federal judge in New York directed that proceedings to liquidate the assets of Bernard L. Madoff Investment Securities LLC be moved to bankruptcy court.

US District Judge Louis L. Stanton also ordered that clients of Madoff's private investment business seek relief under a federal statute that set up a special government reserve fund to rescue cheated investors.

Stanton signed the order after the Securities Investor Protection Corporation asked that steps be taken to protect investors in the scheme.

Congress created the SIPC in 1970 to protect investors when a brokerage firm fails and cash and securities are missing from accounts. Funds can be used to satisfy the remaining claims of each customer up to a maximum of $500,000. The figure includes a maximum of up to $100,000 on claims for cash.

The biggest victims include international banking institutions HSBC Holdings PLC of Britain, Royal Bank of Scotland Group PLC and Man Group PLC, Spain's Grupo Santander SA, France's BNP Paribas and Japan's Nomura Holdings.

All reported that they had fallen victim to Madoff's alleged Ponzi, or pyramid, scheme. A criminal complaint says that for years Madoff paid returns to investors out of money he got from newer clients.

The alleged victims who sunk cash into Madoff's investment pool include real estate magnate Mortimer Zuckerman, and a charity of movie director Steven Spielberg. Irwin Kellner, a well-known economist for MarketWatch.com, filed a lawsuit on Friday against Madoff in US District Court in Long Island, seeking repayment of more than $2.2 million he invested with the money manager.

But the list of people and organizations allegedly taken by Madoff reached into the ranks of the little guy, too.

When local officials in Fairfield, Connecticut, heard of Madoff's arrest "it set off every bell", said Paul Hiller, the town's chief fiscal officer.

The town's employees board and police and fire board - which cover 971 workers - had $41.9 million invested with Madoff, said Paul Hiller, Fairfield's chief fiscal officer.

Town officials immediately notified their investment fund to liquidate. "At that point, it was too late," Hiller said. Without the Madoff funds, the town's pension funds remain safe, officials said, but the loss meant they've lost their cushion.

Others, though, have no such comfort zone.

Officials at the New York-based JEHT Foundation, a nonprofit focused on juvenile justice, said it was freezing all its grants and would shut down at the end of January. The group gets all its fundings from a couple, Jeanne and Kenneth Levy-Church, whose personal investments were managed by Madoff.

New York-based Vera Institute of Justice has received millions of dollars from JEHT since the foundation was established in 2000. Vera Director Michael P. Jacobson described JEHT as a "hard-nosed" foundation focused on achieving results.

In 2007, the Kansas Department of Corrections received a $4.7 million grant from JEHT for a program to aid offenders once they're released to reduce recidivism.

With a $900,000 grant, Vera is working with prosecutors' offices in several states, researching the role of race in how defendants are charged.

"We've had better days," Jacobson said of JEHT's collapse. "It's not like someone will step in and fill that gap."

Another New York nonprofit, the Philoctetes Center for the Multidisciplinary Study of the Imagination, may be forced to close, spokesman Adam Ludwig said.

Reports from Florida to Minnesota included profiles of ordinary investors who gave Madoff their money. Some had been friends with him for decades, others were able to invest because they were a friend of a friend. They told stories of losing everything from $40,000 to an entire nest egg worth well over $1 million.

They join a list of more-powerful investors that have come forward. The roster of names includes Spielberg's charity, the Wunderkinder Foundation; New York's Yeshiva University; former Philadelphia Eagles owner Norman Braman; New York Mets owner Fred Wilpon; and J. Ezra Merkin, the chairman of GMAC Financial Services.

Agencies