June 29 (Bloomberg) -- Bernard Madoff’s defense attorney challenged the government’s claim that his client’s fraud has so far led to $13.3 billion in losses.

Ira Sorkin said that amount should be offset by $1.3 billion held by the trustee for Bernard L. Madoff Investment Securities LLC; by $1.3 billion already recovered by the trustee; and by letters sent by the trustee, Irving Picard, seeking to “claw back” $735 million from Madoff investors.

Sorkin also cited the $10 billion demanded in various other “clawback” lawsuits as an offset, in a letter filed with the court yesterday. Madoff is to be sentenced this morning in Manhattan federal court.

“Thus, if the trustee is successful in his lawsuits, losses will be substantially reduced,” Sorkin wrote. “The media hysteria that the Ponzi scheme was approximately $65 billion and that Mr. Madoff lined his pockets with billions is simply not correct.”

The $65 billion figure represents the amount stated on client account reports when Madoff was arreste in December, including fake profits, government officials have said.

To contact the reporter on this story: David Glovin in New York at dglovin@bloomberg.net

Last Updated: June 29, 2009 09:40 EDT