A San Francisco attorney who interviewed imprisoned swindler Bernard Madoff in a federal prison this week said on Wednesday he plans to amend a lawsuit to include possibly several fund managers who funneled investor money to Madoff's $65 billion Ponzi scheme.

Joseph Cotchett obtained the lengthy interview with Madoff, 71, after suing the former Nasdaq commissioner's wife, Ruth, his sons and brother, along with other parties, on behalf of duped investors in Wall Street's biggest investment fraud.

We had been negotiating with his lawyers and his wife's lawyers for the past two months, Cotchett told Reuters. We said if Bernie would sit down with us, we would give great consideration to letting Ruth out of the lawsuit.

In exchange, Cotchett said he got a detailed account of how Madoff carried out the decades-long scheme as well as names of fund managers and other alleged accessories who may have known or suspected the fraud.

What we have come up with is a whole bunch of names that we are going to have to make decisions on as to whether a reasonable person can conclude ... they knew what he was doing, Cotchett said.

Some of these people have not yet been sued or even connected to the Madoff fraud, he said.

Cotchett, who recovered $1.75 billion in 1992 for investors scammed in the Lincoln Savings & Loan debacle, said he plans to amend two cases pending in New York state court to include new names, and possibly remove others such as Ruth Madoff, within 30 days.

NEAR MISS

A trustee winding down Madoff's former firm sued Ruth Madoff on Wednesday, seeking at least $44 million for investors, saying she received the funds through fraudulent transactions from her husband's firm.

The trustee did not accuse Ruth Madoff of knowing about the fraud that landed her husband in prison for 150 years.

That doesn't mean she was involved in the underlying Ponzi scheme and to be honest I don't think she was but that doesn't mean that she won't be liable for that, Cotchett said.

Cotchett would not comment about whether he would dismiss Madoff's two sons or his brother, Peter Madoff, as defendants.

Madoff told Cotchett that he knew from about 2000 it was a matter of time before they would get him.

Investigators came close in early 2006, when they asked Madoff where he held securities he supposedly bought and sold for clients, Cotchett said.

Madoff gave Securities and Exchange Commission and Justice Department investigators the name of a third-party trust, Depository Trust, that may also have held instruments from his legitimate business, Cotchett said.

He leaves that night and figures by Monday he will be arrested, Cotchett said. They never audited the trust company. The scam continued for three more years.

At the time, Madoff estimated he still had about $20 billion in investor funds in his accounts, Cotchett said.

About $13.2 billion of the missing money has been traced and the trustee has recovered about $1.2 billion, court documents showed.

The cases are Wexler vs. Tremont Partners, Case No. 101615/09, and Ryan vs. Friehling and Horowitz, Case No. 101616/09, in the Supreme Court for the State of New York.

(Reporting by Gina Keating; Editing by Richard Chang)

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