Bernie Madoff is the latest in a long list of criminals, large and small, who have stolen trusting investors' money. So how can you protect yourself from someone stealing your hard-earned nest egg? It's actually really, really easy.
Only put your money in an account that has your name and only your name on it. And don't give anyone besides you (or trusted family member) the right to withdraw the money. Make sure the account is at a major firm.
If you want to have someone else manage your investments, you can still do this. Simply open up an account - in your name - at a brokerage firm like Fidelity or Schwab and then give the investment adviser the power to invest for you but not take the money out. You give this by signing over a Limited Power of Attorney - never a full power of attorney. That's it.
Put another way - if someone asks you to deposit money in any account that does not have only your name (and maybe your spouse's name) on it, just run the other way. He's probably a criminal.
Disclaimer: The above should go a long way towards protecting your money. However it is not guaranteed and your money cannot be considered 100% safe from theft. Neither I, Robert Horowitz, nor my firm Robert V Horowitz, LLC can be held liable for any theft.