There were many managers of "feeder" hedge funds who shoveled billions to Madoff over the years, while at the same time earning hefty fees. They've all claimed that Madoff deceived them, and their accountants, but it's hard to believe thay were all that stupid. If they were complicit, and Madoff has proof, or testifies, or both..well..
That’s the only way we’ll be able to swallow a deal..if he brings down the corrupt system, then it will be worth it.
That would make sense... but the question would be if the prosecutors would have the guts to do it. As long as Madoff is just a single "bad egg", things may not be so bad, but if the general suspicion that the entire market (or at least a significant portion of it) is dirty winds up being proven true, the fallout in loss of confidence in the market will be huge.