When I wrote that he invested with Madoff, I was referring to this article, which mentions both Blodget and Ezra Merkin in the same ‘graph, and got confused:

“I am shocked, as I know you are, by this fraud,” Merkin wrote. “As one of the largest investors in our fund, I have also suffered major losses from this catastrophe.” Analyst Henry Blodget wrote on his blog Friday that some savvy investors figured Madoff was up to something because his returns were so high.

I saw the name “Blodget”, and the phrase “major losses”, and tied the two together, when I should have read carefully, and realized that it applied to Mr. “Pubic Hair Wig” (look up Merkin).
Also, as much as it pains me to say, Blodget is correct in his analysis, that people were investing with him because they thought that he was cheating:

So why did these smart and skeptical investors keep investing? They, like many Madoff investors, assumed Madoff was somehow illegally trading on information from his market-making business for their benefit. They didn’t consider the possibility that he was clean on that score but running a good old-fashioned Ponzi scheme.

When one considers his numbers, this is true. While his victims are victims, they are also crooks, guilty of felony conspiracy, because they entered into this deal knowing that it was crooked.

Unfortunately, I don’t think that there is enough there to get a conviction from a jury, and even if you did, my guess would be that the judge would then dismiss any conviction, but a few show trials would be a good thing.