Rest assured, it was probably something illegal:

The epicenter of what may be the largest Ponzi scheme in history was the 17th floor of the Lipstick Building, an oval red-granite building rising 34 floors above Third Avenue in Midtown Manhattan.

A busy stock-trading operation occupied the 19th floor, and the computers and paperwork of Bernard L. Madoff Investment Securities filled the 18th floor.

But the 17th floor was Bernie Madoff’s sanctum, occupied by fewer than two dozen staff members and rarely visited by other employees. It was called the “hedge fund” floor, but federal prosecutors now say the work Mr. Madoff did there was actually a fraud scheme whose losses Mr. Madoff himself estimates at $50 billion.

And if you ever wondered how the boss afforded a Mercedes 500 and that snazzy Warhol of Jackie O, rest assured, he was probably doing something illegal:

The expense of running such an operation does not provide a ready explanation for thefts of such magnitude. Even the cost of sustaining Mr. Dreier’s appetite for luxury does not provide an easy answer for what instilled the desperation that seems to have prompted schemes involved here, schemes that prosecutors said involved Mr. Dreier pretending to be other people.

Mr. Dreier’s lifestyle includes a waterfront home in the Hamptons, a Manhattan triplex and a place on Ocean Avenue in Santa Monica, Calif. He kept a Mercedes 500 in New York, an Aston Martin in California, and a 121-foot blue and white Heesen motor yacht with a Jacuzzi and a crew of 10 docked in Manhattan or St. Maarten. Associates said the boat, the Seascape, was the site of late-night parties at which Mr. Dreier, who is divorced, was often joined by an attractive young crowd.

The law offices themselves at 499 Park Avenue were like modern art galleries. In court papers filed this week, the comptroller for the law firm reported that $30 million to $40 million of the firm’s assets had been spent on art. Among Mr. Dreier’s holdings were works by Picasso and a Warhol depiction of Jacqueline Kennedy Onassis.

In recent days, someone not affiliated with the firm removed several pieces of artwork from the walls and carted them away, a person at the firm said. It was not clear what became of the art.