Astonishing. From Mother Jones:
Among those that did learn of Madoff's money management business was Boston-based Rampart Investment Management Company, Inc. In late 1999, Frank Casey, then a senior vice president at the firm, had surreptitiously obtained the Madoff fund's financials. He directed Markopolos and Chelo, who worked under him at Rampart, to reverse engineer Madoff's results with an eye toward creating a similar fund for Rampart's investors. What they discovered instead were discrepancies so obvious that Markopolos noticed them within minutes and "in less than four hours…proved mathematically that [Madoff] was a fraud," he told Congress. Markopolos took the team's findings to the SEC in 2000, but federal regulators refused to pursue the case—that is, until the financial meltdown laid bare the fraud on its own and forced them to act.