August 7, 2020

Madoff Trustee Seeking Billions More From JPMorgan

Mr. Picard had sought $5.4 billion in damages previously in addition to $1 billion in transfers and claims.

JPMorgan “was an active enabler of the Madoff Ponzi scheme,” David Sheehan, Mr. Picard’s lawyer, said in a statement. JPMorgan officials “not only should have known that a fraud was being perpetrated, they did know,” he said.

Mr. Picard, who has filed 1,000 lawsuits, claiming $90 billion for Madoff investors, first sued JPMorgan in bankruptcy court in December, contending it ignored signs of fraud as billions of dollars flowed from Mr. Madoff’s account at the bank to investors. JPMorgan was Mr. Madoff’s primary banker.

The lawsuit sought $1 billion in fees and transfers, and $5.4 billion in damages, contending that JPMorgan defrauded federal regulators and violated banking law.

The amended complaint makes additional allegations, including that two former employees of an unidentified financial institution observed “nearly daily circular transactions” between an account that Mr. Madoff controlled at their employer and his account at JPMorgan.

After raising questions about the transactions, the financial institution closed the account because it saw no legitimate business purpose for the transactions, according to the complaint.

The amended complaint also includes a request for a jury trial.

A JPMorgan spokesman, Joseph Evangelisti, has said the bank complied fully with all laws and regulations.

JPMorgan has sought dismissal of the case, arguing that Mr. Picard was hired to liquidate the Madoff firm and has no legal right to mount a class action and claim damages for the Ponzi scheme’s investors.

Article source: http://feeds.nytimes.com/click.phdo?i=55ea52b7becb16196915377afcbcdba9

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