Shock and panic spread through the country clubs of Palm Beach and Long Island after Bernard L Madoff, a trading powerbroker for over four decades, allegedly confessed to a massive fraud that will cost his wealthy investors at least $50 billion, perhaps the largest swindle in Wall Street history. Mr Madoff, 70, a former Nasdaq stock chairman, was apparently turned in by his two sons and arrested on Thursday morning at his Manhattan apartment by the FBI. The FBI claims that three senior employees of Mr Madoff's investment firm - once a towering presence on Wall Street - turned up at his apartment on Wednesday to ask questions about the company's solvency. Two of them are believed to be his sons, Andrew and Mark, who have worked for their father for two decades. Mr Madoff told them that he was finished", that he had "absolutely nothing", and that "it's all just one big lie". He said the investment arm of his firm was "basically a giant Ponzi scheme," and that it had been insolvent for years. A Ponzi scheme, named after the swindler Charles Ponzi, is a fraudulent investment operation that pays abnormally high returns to investors paid from money put into the scheme by subsequent investors, rather from real profits generated by share trading. The FBI complaint states that Mr Madoff told his sons he believed the losses from his scheme could exceed $50 billion. If that is the case, his fraud would be far greater than past Ponzi schemes and easily the greatest swindle perpetrated by one man.