Six degrees of separation – from Bernard Madoff to Kevin Bacon

The actor Kevin Bacon and his wife, Kyra Sedgwick, have become the latest celebrities to admit they are victims of Bernard Madoff, the Wall Street swindler.

The list of rich and powerful figures affected by the finance industry's biggest ever fraud is still growing by the day, three weeks after Madoff confessed to the FBI that he had lost $50bn (£34bn) of his clients' money.

Bacon's publicist, Allen Eichhorn, admitted the couple had become ensnared in the fraud, responding to rumours whipping through Hollywood. But it is still unclear how much the pair may have lost. "I can confirm that they had investments with Mr Madoff," Mr Eichhorn said, "no further specifics or comment beyond that."

Hollywood has not been spared the fallout from the Madoff scandal, which has affected a broad swathe of people, from the super-rich families of the US east coast, Latin America and Europe, to modest Jewish charities and Connecticut firefighters whose pension funds were funnelled into Madoff's pyramid scheme. He told the FBI that, instead of investing the money, he had been paying existing clients with money taken in from new investors, and now there was practically nothing left.

His lawyers said yesterday he would comply with a court's New Year's Eve deadline to set out what remains of the money and his own assets, including luxury homes along the east coast.

The Wunderkinder Foundation, set up by director Steven Spielberg to distribute grants to environmental and children's health causes, among others, was the first to admit to losing money with Madoff. Mr Spielberg's long-time business partner, Jerry Katzenberg, founder of DreamWorks animation, was also hit, along with Eric Roth, who wrote the screenplay for Forrest Gump.

New victims keep emerging. Yesterday, Wall Street was surprised to learn that one of its most savvy economic pundits was also taken in by Madoff and his network of unsuspecting fundraisers. Henry Kaufman, who came to be known as Dr Doom for his gloomy economic projections, said he had put "a couple of per cent" of his net worth with the fraudster.

Major financial institutions have also been hit. The Austrian government took over Vienna's Medici bank, which was brought to the brink of collapse by $2.1bn in Madoff losses.

And the pain is still being felt in Palm Beach, the luxury Florida resort where Madoff solicited funds from members of his country club and golfing partners. Wowed by his claims of two decades of solid investment returns, many people put their entire fortune with him.

A $10,000 statue of two lifeguards, which was stolen earlier this week from the grounds of Madoff's Palm Beach mansion, was found yesterday in nearby bushes with a note attached. It read: "Bernie the Swindler, Lesson: Return stolen property to rightful owners. Signed by - The Educators."

The losses faced by Bacon and Sedgwick will be a blow to a couple who have largely shunned the Hollywood limelight, preferring to spend most of their time in New York, where they have raised two teenage children. They are not touted among best paid or most powerful lists of stars but have seen their earning power rise dramatically in the past few years.

Bacon's roles in numerous diverse films inspired the parlour game "Six Degrees of Kevin Bacon", where players try to connect any actor to him in as few links as possible. Last year, he helped set up SixDegrees.org, a website that encourages social networking between philanthropists and charities.

Passing the buck

Bernard Madoff took money from a charity funded by...

... Steven Spielberg who directed Minority Report starring...

... Tom Cruise who performed in A Few Good Men alongside...

... Kevin Bacon who lost money with... Bernard Madoff