The point is to postulate———if tax evasion was the name of the game, any MO that could be useful was probably employed. Maybe items like manufactured “loss statements” for “investors” to show the taxman?
But there’s no evidence that tax evasion was “the name of the game”. All the evidence suggests that Bernie and some inner circle of co-conspirators were in it to get rich, and that at least the overwhelming majority of his investors believed his operation was totally legitimate. Madoff and his inner circle did in fact take huge amounts of money out of the scam and there’s no evidence they didn’t pay all the applicable taxes on their take. Most of the investors were high net worth individuals with easily traceable business sources for their original investments, family foundations (tax exempt), and non-profit institutions such as universities and pension funds (also tax exempt). Why use illegal cash transfer maneuvers to avoid taxes when you’re already tax exempt? And I’m sure at least a few of the HNW investors were doing various kinds of cheating on their taxes, but there’s no indication that their investments in the Madoff fund had any role in any tax cheating they were doing.
Madoff raked in money first and foremost by creating the image that his organization was reliable, respectable, totally above-board, and closely tied to regulatory organizations. If you want to launder money for tax avoidance or any other reason, this is the last type of investment vehicle you’d choose. There is an ample supply of sketchy hedge funds that cater to the money laundering/tax avoidance market. Most of them either show phony losses to be used for tax purposes, while the “lost” funds are secretly transferred back to the client, or show outrageously high returns (not outrageously steady returns, like Madoff) that can be used to provide an apparent legitimate explanation for huge amounts of money that actually came from illegal activity.