Bernie Madoff, the $60bn fraudster, ordered his London office to sell its $165m portfolio of UK gilts only a month before he confessed to the FBI that his business was a “big lie”.

The London directors followed his instructions, transferring the sale proceeds to Madoff’s New York office. However, it is still not clear where this money went to.

It has emerged that in the middle of November last year Madoff phoned Chris Dale, the finance director of Madoff Securities International (MSI), the London affiliate, and told him to sell the entire gilts portfolio. Madoff then instructed Mr Dale to transfer the money to his New York business, whereupon he would buy US treasuries on London’s behalf.

In the telephone call, Mr Dale was told by Madoff that he wanted to make the switch due to worries about the return on gilts because of sterling’s fall against the dollar. “He was worried about the British economy and said he preferred his investments in US treasuries,” a source said.