Slapped hardest perhaps by the vast Ponzi scheme allegedly orchestrated by Bernard Madoff were investors who gave their life’s savings to trusted financial advisors only to discover that those advisors had trusted Madoff.

Most of these victims now say they never heard of Madoff, let alone trusted him with their hard earned money.

But among the thousands of plaintiffs sure to be named in the myriad lawsuits that will spring from the Madoff scandal, those who invested with third-party investors – or so-called feeder funds -- may stand the best chance of recovering some of their lost nest eggs.

That’s because some of those feeder funds are affiliated with large financial services companies -- and those parent companies have deep pockets.

Consider investors who gave their money to New York-based Rye Investment Management, a New York-based firm that, according to various media reports, lost more than $3.1 billion, or nearly all of its clients’ investments, to Madoff.

Rye is a division of Tremont Group Holdings, a unit of Oppenheimer Acquisition Corp., which is owned by Massachusetts Mutual Life Insurance Co. MassMutual had an estimated $500 billion in assets at the end of 2007.

Reed Kathrein, an Oakland, Calif., attorney who is representing Madoff victims in a class action civil suit against Tremont Group, said the operators of these feeder funds had, in some cases, decades to pick off red flags.

“These people knew Madoff and they knew the game. They were part of the game,” said Kathrein. “They were in the best position to see what was going on, but unfortunately I think they were well compensated to look the other way.”

For instance, operators of these funds should have questioned Madoff’s steady gains even in down markets; the fact that Madoff did not use known or established accountants; and that there was no third party custodian or administrator of his investment assets.

“We’re accusing them of ignoring facts that should have put them on notice that something was wrong or funny with this investment,” said Kathrein. “They should have dug deeper and found out what was going on but they didn’t. We’re looking at something that went on for 30 or 40 years.”

In addition to Tremont Group Holdings, the civil suit filed by Kathrein’s clients also names as defendants Oppenheimer Acquisition Corp., and MassMutual, as well as MassMutual’s auditing firm Ernst & Young.

MassMutual issued a statement claiming its exposure to Madoff was “very limited,” and a spokesman for Tremont has said the fund was as much a victim of the alleged scam as anyone else.

Kathrein’s firm, Hagens Berman Sobol Shapiro, is also representing clients in a suit against another feeder fund, Brighton Co., of Los Angeles.

More than a half dozen federal class action suits have been filed in the three weeks since Madoff was arrested for securities fraud on Dec. 12.

Madoff’s firm is named in one, while two other feeder funds targeted so far are Ascot Partners and Gabriel Capital, both overseen by financier Ezra Merkin, who was named as a defendant in both suits.

Merkin and his Gabriel Capital is also named in a New York State civil suit filed by New York University, and The Fairfield Greenwich Group, another large feeder fund, was sued in state court in Connecticut.

The Securities and Exchange Commission is the subject of a separate civil suit claiming negligence, essentially the same claim made in each of these cases filed so far.

Kathrein said the plaintiffs he is representing are hoping that some of the alleged $50 billion collected during Madoff’s decades as an investment advisor can be recovered.

If that proves impossible, the attorney said he will go after the entities that had a fiduciary responsibility to protect investors who were unaware that their money was being funneled to Madoff.

Meanwhile, another avenue for recovery may be opening to investors burned in the scam through their involvement in feeder funds.

The judge presiding over civil claims against Madoff said he may be willing to consider extending relief to those who invested in Madoff's business through third parties.

The Securities Investor Protection Corp., which was created by Congress and is funded by the securities industry, can give investors up to $500,000 if it is determined their money was stolen. But SIPC funds are earmarked for direct customers, not those who invested through third party funds.

U.S. District Judge Louis L. Stanton said in a letter to two investors that he will consider allowing investors who invested through third parties to file claims with the SIPC, but first he needs a formal application and briefing from SIPC, the Securities and Exchange Commission, a trustee for Madoff's business and representatives of investors.

Arthur A. Greenberg, a California lawyer familiar with the Madoff suits but not involved, said he’d probably wait until the investigations – both civil and criminal – were farther along before filing suit against feeder funds.

“There seems to be some badge of honor to be the first on the block with these suits,” he said. “I need to know the nature of the transactions between the feeder and Madoff or other intermediaries, also the nature between the feeder and other victims. This is entirely unknown right now. We need to get this information.”

But his cautious approach came with a stipulation -- that those feeder funds cooperate with investors seeking information on their relationship with Madoff.

If the feeder funds have nothing to hide, than cooperation shouldn’t be a problem, he noted.

If the funds aren’t cooperative, that’s another story.