NEW YORK (CNN/Money) - Citigroup and J.P. Morgan Chase set up sham transactions for the now bankrupt energy trader Enron Corp that totaled more than $8 billion, Senate investigators said Monday.

The complex financing arrangements made Enron appear rich in cash rather than heavily indebted, according to the Senate's Permanent Subcommittee on Investigations, which is looking into Wall Street's role in helping Enron hide its debt as it headed toward bankruptcy.

The panel will question officials from J.P. Morgan Chase and Citigroup in a hearing scheduled for Tuesday. Shares of J.P. Morgan (JPM: Research, Estimates) tumbled $1.27 to $24.83 while Citigroup (C: Research, Estimates) lost $3.63 to $32.37 Monday.

Responding, Citigroup called the arrangements appropriate while J.P. Morgan could not immediately be reached for comment.

The investigation focused on financial vehicles know as a "prepay" where one party pays in advance for a service to be rendered later. In Enron's case, according to investigators, they "sold" energy to a phony corporation set up, controlled, and financed by the banks. Enron would then "buy" the energy back from the shell at a preset price which amounted to paying back principal plus interest. Enron booked these transactions as loans. In their financial reporting, however, it was booked as cash flow.

The banks were not unwilling partners in these sham trades, say investigators, but rather orchestrators who taught Enron how to fool their investors.

J.P. Morgan Chase and Citigroup not only knew they were using questionable accounting, but "actively aided Enron in return for fees and favorable consideration in other business dealings," said Robert Roach, the chief investigator for the committee, in prepared remarks for Tuesday's hearing.

"The evidence indicates," Roach said, "that Enron would not have been able to engage in the extent of the accounting deceptions it did, involving billions of dollars, were it not for the active participation of major financial institutions willing to go along with and even expand upon Enron's activities."

The Wall Street Journal, citing an Enron memo, said the arrangement created by Citigroup helped Enron create a gap as large as $1 billion between Enron's cash flow and financial position on paper.

"The transactions we entered into with Enron were entirely appropriate at the time based on what we knew and what we were told by Enron," Citigroup said in a statement. "We were assured that Enron's auditors had approved them, and we believed they were consistent with accounting rules in place at the time."

News of the "round-trip trades" were disclosed as several other energy firms, such as CMS Energy and Duke Energy, are under scrutiny for conducting similar moves.

In an interview last week, Citigroup Chairman Sanford Weill said "I wish I'd never heard of Enron," the Journal reported.

Carl Levin (D-MI), who chairs the Senate panel looking into the matter said "the maze of financial transactions that Enron constructed to make its financial statements look good makes Rube Goldberg look like a slacker. Our hearings will look at what role some of our biggest and most respected banks had in creating those accounting gimmicks and the resulting impact on Enron's financial statements."

Enron filed for bankruptcy last December after disclosing that it overstated profits.