US justice chief quits Madoff criminal probe

The fraud investigation of fallen US financier Bernard Madoff took an unusual twist as the US attorney general removed himself from the criminal probe.

The move comes hours after Madoff was forced into the humiliation of wearing an electronic tag as part of his bail conditions.

A judge also imposed a curfew on the man who only a few days ago was enjoying life at the pinnacle of US society.

However, the court agreed to allow Madoff to remain free on $10m (€6.9m) bail, with his wife and brother as guarantors.

Madoff, accused of masterminding a $50bn (€35bn) pyramid scam that has left people in ruin around the globe, is under electronic tagging surveillance, has surrendered his passport, and is required to be at his Manhattan apartment from 7pm to 9am

US Attorney General Michael Mukasey removed himself from the Madoff probe because his son, Marc Mukasey, is representing Frank DiPascali, a top financial officer at Madoff’s investment firm.

The US financial watchdog the Securities and Exchange Commission also announced it was looking into the relationship between Madoff’s niece and a former SEC lawyer who reviewed

Madoff’s business.

The developments reflect growing criticism that Wall Street and regulators in Washington have grown too close. Madoff himself has boasted of his ties to the SEC.

The question of Madoff’s connection to regulators goes to the heart of the investigation of the alleged fraud, SEC chairman Christopher Cox told reporters.

Today, US President-elect Barack Obama is expected to name his choice to replace Mr Cox as head of the embattled commission.

Former SEC member Mary Schapiro, a former head of the Commodity Futures Trading Commission, has been tipped for the role.