Steve Harbeck of the Securities Investor Protection Corporation (SIPC) said records found at Mr Madoff's offices at Manhattan's Lipstick Building indicate that he was running a "hybrid fraud".
"We do not seem to be dealing with a traditional Ponzi scheme alone," he told the Observer.
Mr Harbeck added that the records date back 20 years and contain details of thousands of trades. The SIPC suspects that these documents were used to prepare fraudulent client statements.
The new findings make the scale of the alleged fraud "incredible", Mr Harbeck said, as most normal Ponzi or pyramid schemes collapse under their own weight within a year.
He remarked that it is "too early" to say what exactly has transpired - and what the eventual losses could be.
The site noted that institutional and individual investors have so far declared losses of around $27 billion (Â£18.2 billion) linked to the scandal.
Mr Madoff is currently under house arrest at his Manhattan apartment.