All day today, I heard news reports about Bernie Madoff admitting to the court that, yes, he did run a Ponzi scheme of epic proportions that sucked something like $50 billion out of the accounts of New York investors, the retirement accounts of Floridians and the endowments of dozens of schools up and down the Eastern seaboard.

Today, the Madoff scourge reached the distant quarters of the verdant Pacific Northwest.

Late yesterday, we filed a case in US District Court against Bernie, on behalf of John Dennis. Dennis did not do business directly with Madoff, instead he wrote checks to a local outfit here, FutureSelect Prime Advisors II, LLC. That is where the story gets interesting.

When Dennis agreed to put his money with FutureSelect, he agreed to a deal that is common with wealth-management firms -  he agreed to pay the fund's general partner, Ron Ward, a fee of about 1.5 percent to manage his cash.

Most reasonable folks would think that giving up 150 basis points a year would buy you something, and with most wealth-management companies it does - it buys you access to deals you normally wouldn't see, and it buys you the peace of mind that a seasoned financial pro is sifting the good deals from the bum deals. In legal terms, this is called due diligence.

According to our suit, though, Ward did little on the due diligence side. In fact, it appears to us that Ward simply bundled our client's money and shoveled it over to Madoff through an intermediary. Not a bad job: put the checks in an envelope, lick the stamp and keep a point and a half for the trouble of walking to the post office.

We all know what happened, though. Madoff took the money and never invested it.

According to our suit, Ward and his firm fed the funds up to another "feeder firm" called Tremont, which is owned by Oppenheimer, one of the big players in the investment world. In a separate action, we are suing Tremont on behalf of other clients, alleging the same thing - they took investor money, cut off a little piece for the trouble, and with little or no due diligence gave it to Bernie.

As the Mob used to say back in the 1930s, everybody got their beak wet - Ward, Tremont, Oppenheimer, and of course, Madoff.

Everyone in the chain was happy to take the money and move it along. But it appears to us that no one took the responsibility for due diligence seriously, and that is wrong.

We all know the consequences. Our client invests his money in Seattle with a small, obscure wealth management guy in the hinterlands of the Pacific Northwest, and before you know it, he's in a club with the likes of Steven Spielberg, Zsa Zsa Gabor and the trustees of Bard College