Convicted Ponzi scheme fraudster Bernard 'Bernie' Madoff's finance firm was like a cult where his employee underlings obeyed every command, according to his former staff's defence lawyers.

Several ex-Madoff employees are on trial over their alleged roles in his $65bn (£40.1bn, €47.5bn) fraud that blew up in 2008, with half the investors in his Ponzi scheme losing as much as $19bn in all.

"They thought he was almost a god," said Eric Breslin, a lawyer for former Madoff portfolio manager Joann Crupi, reported the Reuters news agency.

"They did not want to question anything he did."

Andrew Frisch, lawyer for Madoff's ex-operations director Daniel Bonventre, claimed employees considered their now-incarcerated boss "the all-knowing, grand master of Wall Street".

Madoff, who listed the likes of Zsa Zsa Gabor and Larry King among his ill-fated clients, is four years into his 150 year sentence. Many of his clients lost their entire life's savings.

"I have left a legacy of shame, as some of my victims have pointed out," Madoff told the court at his sentencing, adding that "I cannot make an excuse for my behaviour".

The Ponzi scheme worked by Madoff using new deposits to pay returns to existing investors, giving the appearance of a successful investment programme. The deposits were held at banks rather than invested in securities. The scheme eventually collapsed when Madoff could not afford to sustain the returns with enough new deposits.

It was also claimed in the court that different floors in the Madoff building were not able to communicate with each other.

"Everyone was in a box ... and could only see what was in front of them, not the whole," Crupi's lawyer Breslin said.

Peter Madoff

In July, Madoff's younger brother refused to answer questions over the details of the largest Ponzi scheme in history after pleading the Fifth Amendment over 50 times in the High Court in London.

Testifying via a video link from a US prison, Peter Madoff invoked his Fifth Amendment right against self-incrimination under US law as liquidators try to retrieve billions of dollars in investors' money.

He refused to discuss payments totalling $300m from a Madoff-owned UK unit to his brother's family and his duties at the London-based subsidiary. He even pleaded the Fifth Amendment when asked about his own plea bargain to US criminal charges.

Other defendants, Bernard Madoff's son Andrew, former Bank Medici chairwoman Sonja Kohn and former SG Warburg executive Stephen Raven have all denied any knowledge of any wrongdoing and have stated that they are also victims of the scandal.

Madoff Securities International is based in London and served as the fraudster's proprietary trading unit.

Liquidators in Britain say that more than $910m was transferred between the London unit and Bernard L. Madoff Investment Securities in New York, from 1983 until firm's collapse in December 2008.

UK liquidators are seeking to recover about $50m, including payments for a luxury yacht.