WASHINGTON - The fraud investigation of Wall Street money manager Bernard L. Madoff took unusual twists yesterday as the U.S. attorney general removed himself and the Securities and Exchange Commission looked into the relationship between Madoff's niece and a former SEC attorney who reviewed Madoff's business.

The developments reflect growing criticism that Wall Street and regulators in Washington have grown too close. Madoff himself has boasted of his ties to the SEC.

The question of Madoff's connection to regulators goes to the heart of the investigation of the alleged $50 billion fraud, SEC Chairman Christopher Cox told reporters.

In New York, Madoff showed up at the federal courthouse to sign some papers in his case, wearing a baseball cap. Free on $10 million bail, Madoff now has a curfew and an ankle-bracelet to monitor his movements. *