1) You can’t cheat an honest man, for certain meanings of the word “cheat”, but you can steal from him. Some Wall Street scammers are simple thieves.
2) The difference between $17.1 billion and $50 billion? Some of it was paid out as “dividends” to earlier investors (who will now have to give it back if they can be found), the rest is offshore or was paid to Madoff and his employees as salary and bonuses.
3) How many other Madoffs are out there? Time to look. I think the “hedge fund” industry has a lot of rottenness, though Madoff’s ability to cover his tracks by being the custodian of his own trades is particularly unusual.
4) The fundamental commandment many of these investors violated, probably the most fundamental finanicial commandment of all other than “obey the law”, is “don’t put all your money in one place”.