If you thought Bernard Madoff's $50 billion investment scheme was audacious, get ready for his alibi. Lawyers for the accused scammer are exploring an insanity defense, we hear.

"Bernie's family and his attorneys may argue that, somewhere along the line, he had a mental break," says a Madoff acquaintance. "They may even say he has a multiple personality disorder."

Madoff's grip on reality does show signs of slipping. The 70-year-old financier, now a prisoner of his East Side penthouse, wore a weird smile when he was photographed shortly after his Dec. 12 arrest. He's also said to be taking a heavy dose of anti-anxiety medication.

"He seems really out of it," says a source, who believes Madoff's family fears he'll follow the example of Rene-Thierry Magon de la Villehuchet, the Madoff client who slit his wrists last week. "He has a very low affect. Bernie barely speaks. His wife, Ruth, and his sons, Andrew and Mark, do most of the talking for him."

Madoff's lead attorney, Ira Lee Sorkin, told us: "I have no comment on Mr. Madoff's defense or mental health."

Dr. Keith Ablow believes Sorkin could make a case for diminished capacity.

"He might try to argue that Madoff suffered from dementia or a bipolar disorder," says the psychiatrist, who has served as an expert witness in high-profile criminal cases. "

He could argue that Madoff committed the fraud during manic, euphoric periods and that he never found the equilibrium to correct his crime. Or that he was so delusional that he convinced himself the investment returns were real. You might also plead that he was incapacitated by some character disorder, like a malignant narcissism stemming from an early-life trauma.

"Insanity defenses rarely work," Ablow notes. "But if you can influence just one juror, he may stand a chance."

No doubt people will call him crazy like a fox and recall mobster Vincent (Chin) Gigante, who tried to escape jail by mumbling and stumbling around the streets in his bathrobe.

Top criminal attorney Edward Hayes doesn't think it will fly: "Madoff admitted to his sons that he knew it was a Ponzi scheme. His best defense is making himself essential to discovering where the money is and getting it to the victims."

Still, just to be safe, the grinning Madoff might want to find himself a really tatty bathrobe.

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