Wednesday marks a five-year anniversary in the biggest financial fraud in American history - the day Bernie Madoff, a Wall Street icon who cowed regulators and investors alike, was arrested for stealing $65 billion.

Madoff, now serving a 150-year prison term, maintains he perpetrated the decades-long fraud by himself. However, he's a pathological liar and what I like to call a "financial serial killer," who was still defrauding investors just days before his arrest.

For the last month, Madoff's former right-hand man Frank DiPascali has been testifying in a federal trial against colleagues who worked for Madoff, unraveling how they enriched themselves by creating false financial statements dating back to the 1970s.

When the Securities and Exchange Commission did come calling in 2005, Madoff panicked, and even searched through one of the government investigator's briefcases when he wasn't around. And, according to the New York Post's coverage of DiPascali's testimony, Madoff "freaked out after discovering a copy of a 2001 article from Barron's magazine" questioning how the billion-dollar fund made money. I wrote that 2001 Barron's article, which quoted skeptics about Madoff's secretive investment advisory business, which on Dec. 11, 2008, was revealed as an epic $65 billion fraud. Madoff turned himself in then only because the financial crisis had hit, and his investors were rushing to redeem at the same time. The truth was, Madoff never invested a single dollar in the market - the assets were all languishing in a checking account at JPMorgan Chase.

I didn't expose Madoff fully - I wish I had - but his hedge fund was allegedly returning 10 percent or 11 percent a year consistently even when the stock market was crashing in the 2001 bust. Red flag!

What are the lessons for investors? Ask yourself:

Does an investment sound too good to be true? Are the returns too high or too consistent? If so, don't invest.

When you ask questions do you get answers? When clients queried Madoff about his returns, holdings, and investment style, he refused to answer. Red flag! Don't invest.

Do you have all your money at one firm? Many victims maintained most of their liquid net worth with Madoff. Diversify; don't invest all assets in one place.

Does the money manager custody assets with a third party? If not, don't invest. Madoff "self-custodied," meaning he had his hands on client money.

Does your financial adviser use a major accounting firm to audit results, or a family member or close friend? If the latter, they could be persuaded to doctor the statements. Don't invest.