Ponzi schemes are generally associated with fly-by-night operators out to make some fast bucks duping unsuspecting lay persons with promises of high growth investments. (See: Nomura's exposure $306-million exposure in Masdoff's Ponzi)

But the latest scandal that has come to light seems to the mother of all Ponzi schemes, and what is more, the victims include savvy investment bankers, financial institutions and charities from across the world.

At the centre of the storm is veteran Wall Street money manager Bernard Madoff and his Bernard L. Madoff Investment Securities LLC. The 70-year-old Madoff, who was arrested Thursday, is a respected name in the investment community.

According to US prosecutors Madoff's Ponzi scheme that failed in the wake of the financial crisis has resulted in losses to the tune of $50 billion to investors, though analyts say the actual igure may be much lower (See: Madoff fraud losses may be below $50 billion)

Harvey Pitt, a former chairman of the Securities and Exchange Commission said that a lot of very sohisticated people have been duped.

Among the alleged victims of the gigantic fraud are  pensioners, powerful financial institutions and local charities. Some investors claim they have been completely wiped out, while many other are still calculating their losses.

Spain's largest bank Santander said it has an exposure of €2.33 billion($3.1 billion), by way of its invesment fund Optimal to the Madoff scheme.In addition it also has 17 million euros invested from its own funds in Madoff products.

According to Switzerland's Reichmuth & Co. a private bank, it has $327 million at risk. It said it sincerly regretted being affected, in a communication to investors.

French bank BNP Paribas' said its exposure to Madoff's fund could lead to €350 million euros ($467 million) in losses.Paribas declared that it has no investments of its own in Madoff's hedge funds but is exposed through its trading business and collaterized lending funds.

In Tokyo, Nomura Holdings said it has Madoff-related exposure running to ¥27.5 billion.

In Britain, the Royal Bank of Scotland decline to give details but said it has some exposure to Madoff products.

Meanwhile, investigations into the impact of the scandal have been launched in Italy and Spain.

Italy's stock market watchdog, the Consob, has started investigations of scandal's impact on the national financial system accoriding to Ansa news agency. The Bank of Spain has also reportedly opened investigations into the extent of involvement of Spanish companies.