This is not how J. Ezra Merkin, the president of the wealthy Fifth Avenue Synagogue on the Upper East Side of Manhattan, would have wanted to end its jubilee year.

On Wednesday, 50 years after his parents helped to set up one of the most powerful synagogues in the country, Mr Merkin was ordered by a New York judge not to conceal or destroy any documents relating to his investments with Bernard Madoff, whose alleged $50 billion (£34 billion) fraud scandal is rocking Wall Street and beyond.

The injunction formed part of legal action by New York University, which is suing Mr Merkin for turning over its investments to Mr Madoff in a move that lost the university $24 million.

Mr Merkin, who is chairman of the car loan giant GMAC, has been forced to liquidate his own hedge fund, called Ariel, because of losses incurred through Mr Madoff’s Ponzi scheme. It is thought that he also had about $1.8 billion of his other fund, Ascot Partners, invested with Mr Madoff.

In the two weeks since Mr Madoff confessed to his sons that his investment empire was “just one big lie”, it has emerged that he used Mr Merkin to exploit his impeccable, high-powered connections at the synagogue to find new clients and to tap into the vast network of Jewish charities who knew and trusted him.

Yesterday, the mood at the synagogue was sombre. While Christmas Day joggers shuffled past the modern building, near Central Park, Cantor Joseph Malovany and a handful of congregants talked inside over doughnuts and coffee after 7.30am prayers.

Myron Poloner, a member of the synagogue, told The Times: “We are all very concerned. This is an embarrassment. This is shocking. Many of us here have lost a lot, but then many of us can afford to – you know, it’s not like we gave him our last dollar. But it is terrible that he [Madoff] tried to harm the charities.”

Mr Poloner, who visited the synagogue yesterday for Chanukkah prayers, said that Mr Madoff was not mentioned by name inside the building. “We just say it’s ‘difficult times’,” he said.Another congregant, who declined to be named, said: “We are very private here. This is a very low-key synagogue. Merkin has not been here much since this broke. Everyone is concerned. I just feel terribly sorry for the not-for-profits. Things are very sombre inside.”

It is not known whether Mr Merkin will be forced to step down as president of the synagogue, but last Sunday he was greeted warmly when he attended a service there.

Such warmth must have taken genuine humanity: Ira Rennert, chairman of the synagogue’s board, had $200 million invested in Mr Madoff’s fund and is believed to be one of at least ten members who have lost money in the scandal. Elie Wiesel, the Holocaust survivor and Nobel Peace Prize winner and another prominent member of the synagogue, had $37 million of his own charity wiped out. Mort Zuckerman, the owner of the Daily News newspaper, lost $30 million from a charitable foundation that he had invested with Mr Merkin. Tufts University near Boston and New York Law School also signed large checks to Mr Merkin, who in turn placed the money in Mr Madoff’s care.

As the synagogue counted the cost of the alleged fraud, a group of French investors demanded that their own Government release a list of the country’s funds that had been exposed to Mr Madoff. SOS Petits Porteurs said that it had asked the Finance Ministry to provide a list of French funds “contaminated by the Madoff virus”.

The group said that many depositors were complaining that fund managers were refusing to discuss their potential losses or exposure to Madoff-related investments.

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