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According to wort.lu, $5-7 billion have been funneled into Madoff's Ponzi scheme through Luxembourgish banks and fonds. The article is scarce on details, but mentions Luxembourg's Spuerkeess (BCEE) as being affected, albeit to a much smaller extent than the usual suspects UBS and HSBC.

Update: Let's do some math using figures from Bloomberg:

LuxAlpha American Selection: $1.4 billion (UBS/Access International Advisors)
Lux Invest US Equity Plus: $419 million (UBS)
Herald (Lux) US Absolute Return Fund: $226 million (HSBC/Bank Medici AG)

That's close enough to the $1.9 billion which had been previously reported. I'm curious how the parlamentary commission ("Spezialkommissioun Wirtschafts- a Finanzkris") arrived at $5-7 billion. Shouldn't this be getting a bit more media coverage?

Update 2: This article on RTL.lu has a reaction from the Spuerkess (BCEE) on the "speculation" that it may be involved in the Madoff scandal: The Spuerkess called this information "erroneous" and pointed out it was only providing "administrative functions" for a fund which made some investments in other funds which had made investments in some products offered by Madoff. I'm not sure if I understood this correctly because my Lëtzebuergesch totally sucks, but this would place several layers between Madoff and the BCEE.

In other news, an "expert in business ethics [!]" who goes by the name of "jturquey" seems to have copied parts of my post 1:1 without attribution (see comment) while making the rest sound more dramatic:

Finally, the Wirtschaftswoche has a lengthy article on Madoff, lax regulations in the fund industry in Luxembourg and Ireland and the damage this has caused to unsuspecting German investors. The article's in German, but this impressive "epic fail diagram" transcends all language barriers.

Update 3 (Jan 23): The CSSF has issued a press release with a list of affected funds. Total exposure of these funds is said to be "up to EUR 1.7 billion".