NEW YORK The court-appointed trustee seeking to recoup money for victims of Bernard Madoff on Wednesday said he filed complaints against seven global financial institutions in hopes of recovering more than $1 billion.
Irving Picard, the trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS), filed complaints against Citigroup's Citibank, Natixis SA, Fortis, ABN AMRO Bank N.V., Banco Bilbao Vizcaya Argentaria, Nomura and Merrill Lynch, now owned by Bank of America Corp.
None of the banks were available for immediate comment.
The complaints were filed under seal in the U.S. Bankruptcy Court for the Southern District of New York.
The financial institutions received transfers of money from BLMIS through numerous Madoff feeder funds when they either knew or should have known of Madoff's fraud, according to a statement by the trustee.
"The complaints allege that the banks enabled the Madoff Ponzi scheme by opening a spigot of new money into the Madoff feeder fund network, by creating and offering derivative investment products linked to various Madoff feeder funds, including the Fairfield Greenwich, Kingate and Tremont families of funds," the trustee said in a statement.
Separately, Picard also filed a $100 million claim against Sandra Manzke and her family and the Maxam Fund Group in connection with the scheme for what the suit described as Manzke's role in continuing to enable and profit from the Ponzi scheme.
Picard is also trying to recover money for investors with a claim against Swiss bank UBS for $2.5 billion filed in Zurich.
Madoff, 72, is serving a 150-year prison sentence after admitting to orchestrating a worldwide fraud of about $65 billion.
So far, Picard and his team of lawyers have recovered about $2.6 billion.
The money will be distributed to victims of the decades-long multibillion dollar fraud that shook confidence in securities regulators when it was revealed two years ago on December 11, 2008 and Bernard L. Madoff Investment Securities LLC collapsed.
The trustee is seeking $425 million of the more than $1 billion from Citi. About $300 million of that is connected to a credit facility Citibank availed to a Madoff feeder fund, Rye Select Broad Market Prime Fund L.P. The remaining $125 million is related to a swap transaction linked to another Madoff feeder fund, Fairfield Sentry Limited.
"Armed with considerable non-public information about Madoff, Citi either knew or should have known that Madoff's investment advisory business was a fake, and that the funds Citi received from these two Madoff feeder funds came from Madoff's fraudulent activities," Picard said in a statement.
In the action against Natixis, the trustee is seeking to recover at least $400 million the bank received in connection with structured products.
The trustee is also seeking to recover $230 million from Fortis Prime Fund Solutions Bank Ltd in connection with swap transactions, $270 million from ABN AMRO and $45 million from Bilbao Vizcaya Argentaria in connection with structured notes issued by BBVA using Madoff feeder funds.
(Additional reporting by Dan Levine in San Francisco; Editing by Bernard Orr and Muralikumar Anantharaman)