Madoff investors sue KPMG and major banks
NEW YORK (Reuters) - Some investors defrauded by epic swindler Bernard Madoff on Tuesday added accounting firm KPMG KPMG.UL, JPMorgan Chase (JPM.N) and Bank of New York Mellon (BK.N) to a civil lawsuit in a New York court, lawyer Joseph Cotchett said.
The lawyer, who also named Oppenheimer Acquisition Corp, Massachusetts Mutual Life Insurance MMLIC.UL, Tremont funds founder Sandra Manzke and former Tremont Chief Executive Robert Schulman in the amended lawsuit, said the complaint was based on his law firm's prison interview with Madoff in July, months of investigation and interviews with former employees.
Cotchett said in a statement that "KPMG never blew the whistle on fraudulent conduct" at Madoff's British firm, Madoff Securities International Ltd, which the accounting firm audited.
KPMG declined comment as did JPMorgan Chase. A representative for Massachusetts Mutual Life Insurance, parent company of Openheimer and Tremont funds, could not immediately be reached for comment.
The complaint, filed in New York State Supreme Court, also alleges "abuse of drugs and women as a pattern of conduct in the Madoff firm" - Bernard L. Madoff Investment Securities LLC in New York.
"JPMorgan Chase, the complaint alleges, helped Madoff launder money between the United States and London -- almost $6 billion of investors' money," said Cotchett, whose law firm Cotchett, Pitre and McCarthy is based in Burlingame, California.
Madoff, arrested in December for orchestrating the biggest investment fraud in Wall Street history of up to $65 billion, is serving a life sentence in a medium security prison in Butner, North Carolina, after pleading guilty in March to the decades-long fraud.
"The complaint alleges Bernard Madoff's fraud was not accomplished in isolation," the law firm's statement said.
"The complaint alleges JP Morgan and the Bank of New York as well as powerhouse accounting firm KPMG LLP and their international counterparts, KPMG UK and KPMG International were primary players necessary to accomplish the fraud."
The case is Jay Wexler on behalf of Rye Select Broad Market Prime Fund LP v KPMG LLP et al, New York State Supreme Court No. 101615/2009
(Reporting by Gina Keating and Grant McCool; Editing by Steve Orlofsky, Leslie Gevirtz)
