WASHINGTON (Reuters) - The frequency of Ponzi schemes is not increasing but the magnitude of the frauds is, a Securities and Exchange Commission official said on Friday.

Bernard Madoff is escorted from Federal Court in New York in this January 5, 2009 file photo. REUTERS/Lucas Jackson

The SEC has been under intense scrutiny for not uncovering the alleged $50 billion fraud carried out by former Nasdaq Chairman Bernard Madoff, who is accused of running a massive Ponzi scheme for years.

Donald Hoerl, director of the SEC’s Denver office, said the agency has filed about 70 Ponzi cases in the last two years and has filed four cases since Madoff was charged in early December.

“That’s not a dramatic upswing in terms of the number of cases,” said Hoerl, speaking at the Practising Law Institute’s annual SEC Speaks conference. “What is different is the magnitude of the Ponzi schemes.”

Ponzi schemes involve frauds in which early investors are paid with money from later investors.

Hoerl said the SEC’s recent Ponzi scheme cases involve staggering amounts of money. In late January, the agency charged then-missing fund manager Arthur Nadel with defrauding investors at six Florida-based hedge funds.

The SEC said Nadel provided false information to investors about the funds’ returns and overstated the value of the investments by $300 million.

“The magnitude of these schemes serves as a reminder to us we need to continue our focus in this area,” Hoerl said.

He said the schemes follow a typical pattern: They are led by a very charismatic person, they involve secretive and very successful trading programs, and the investment advisers are seldom registered with the SEC.

It’s “a scheme that’s been with us for a very long time,” Hoerl said. “It has been a constant part of the SEC’s (enforcement) program.”

Lawmakers grilled SEC officials earlier this week, chastising them for not paying heed to Harry Markopolos, a former investment manager who repeatedly tried to warn U.S. regulators about Madoff, and for not examining Madoff’s firm more aggressively.