"This is a terrible and unnecessary tragedy," Madoff's lawyer, Martin Flumenbaum said in a written statement. "Mark was an innocent victim of his father's monstrous crime who succumbed to two years of unrelenting pressure from false accusations and innuendo."

A lawyer for Mark's mother, Ruth Madoff, said, "She's heartbroken."

Mark Madoff's body was discovered after his wife, Stephanie, became concerned when he sent an e-mail to her early Saturday morning that someone should check on their 2-year-old son, said the law enforcement officials, speaking on condition of anonymity because they weren't authorized to speak publicly about the death.

Madoff's wife, who is at Disney World in Florida with her 4-year-old daughter, sent her stepfather to the home. The toddler was found unharmed, along with a dog.

Bernard Madoff, 72, swindled a long list of investors out of billions of dollars. He admitted that he ran his scheme for at least two decades, cheating thousands of individuals, charities, celebrities and institutional investors. Losses are estimated at around $20 billion, making it the biggest investment fraud in U.S. history.

He was arrested on Dec. 11, 2008, after confessing his crimes to his sons.

The scandal put a harsh light on members of the family. The financier's brother, Peter, played a prominent role in the family's company. Mark and Andrew Madoff both worked on a trading desk at the firm, on a side of the business that wasn't directly involved in the Ponzi scheme.

In February, Mark Madoff's wife petitioned a court to change her last name and the last names of their two children, saying her family had gotten threats and was humiliated by the scandal.

Just days ago, a court-appointed trustee filed a lawsuit seeking to recover any money from the fraud scheme that had been paid to members of the Madoff family, including Mark Madoff's two young children.

At least a half-dozen Madoff employees have also faced criminal charges.

A year ago, the trustee, Irving Picard, sued several relatives, including Peter, Mark and Andrew, accusing them of failing to detect the fraud while living lavish lifestyles financed with the family's ill-gotten fortune.

The lawsuit accused Mark Madoff of using $66 million he received improperly to buy luxury homes in New York City, Nantucket and Connecticut.

"This is a tragic development and my sympathy goes out to Mark Madoff's family," Picard said in a statement Saturday.

Said Bernard Madoff's lawyer, Ira Sorkin: "This is a great tragedy on many different levels."

Calls to the FBI and U.S. Attorney's office were also not immediately returned. Previously, spokespeople for the brothers had repeatedly denied that they had any knowledge of their father's crimes.

Bernard Madoff is serving a 150-year prison sentence in North Carolina. Bureau of Prisons spokeswoman Traci Billingsley said Saturday she didn't have specific information on whether he had been informed of his son's death or would be allowed to attend a service. In general, she said, inmates are informed of a relative's death as soon as the institution is made aware of it and the bureau does allow furloughs for prisoners to attend memorial services.

A police officer stood guard Saturday morning in the lobby of Mark Madoff's building, a 12-story luxury condo tower with a penthouse owned by rocker Jon Bon Jovi.

The building sits on a busy block abutting Broadway in an area crowded with clothing boutiques, cafes and art galleries. The sidewalks and cobblestone streets near the apartment were packed with Christmas shoppers Saturday, as dozens of reporters stood vigil.

Bystanders gawked as officials from the medical examiner's office removed the body early Saturday afternoon. The medical examiner will determine the cause of death.

Nikolay Reva, a 28-year-old salesman in the Prada boutique on same block, said that Mark and his wife would come in with their children to shop, both before and after the scandal broke two years ago.

Mark "was very sweet, respectful, friendly," said Reva. "But after his father's arrest, you could see the person diminishing slowly, you could see something started to happen physically, and he wasn't as talkative."

Associated Press writers Verena Dobnik in New York and Page Ivey in Columbia, S.C. contributed to this report.

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