Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Madoff trustee sues JPMorgan for $6.4 billion

By Aaron Smith, staff writer


NEW YORK (CNNMoney.com) -- The court-appointed trustee for the liquidation of Bernard Madoff's estate is suing JPMorgan Chase for $6.4 billion for allegedly aiding the most massive Ponzi scheme in history.

The trustee, Irving Picard, is suing the banking company for "nearly $1 billion in fees and profits and an additional $5.4 billion in damages for [JPMorgan's] decades-long role as [Madoff's] primary banker, aiding and abetting Madoff's fraud," according to a statement.

Picard said the complaint was filed under seal in U.S. Bankruptcy Court in Manhattan.

"J.P. Morgan was willfully blind to the fraud, even after learning about numerous red flags surrounding Madoff," said David Sheehan, counsel for the trustee, in a prepared statement.

He accused JPMorgan (JPM, Fortune 500) of being "at the very center of that fraud, and thoroughly complicit in it."

JPMorgan officials were not immediately available for comment.

Just days before, on Nov. 24, the trustee announced a similar lawsuit against UBS AG for $2 billion. The trustee accused the Swiss financial firm of participating in Madoff's Ponzi scheme.

More recently, on Nov. 28, the trustee announced a wave of 40 lawsuits against Madoff family members and former workers in a bid for $69 million.

Madoff, 72, pleaded guilty in March 2009 to 11 counts related to running the Ponzi scheme and was sentenced to 150 years in prison. He is incarcerated at a federal medium security facility in Butner, N.C.

Using his investment firm as a front, Madoff claimed to be investing his clients' money. He kept the fraud going by using deposits from new clients to provide so-called returns to more mature clients. But in reality, he was stealing the money and there were no returns

In the most recent tally, on Nov. 26, the trustee said it had recognized 2,309 claims worth more than $5.8 billion. To top of page

Index Last Change % Change
Dow 17,689.86 -56.12 -0.32%
Nasdaq 5,128.28 -0.50 -0.01%
S&P 500 2,103.84 -4.79 -0.23%
Treasuries 2.20 -0.06 -2.78%
Data as of 4:38pm ET
Company Price Change % Change
Bank of America Corp... 17.88 -0.25 -1.38%
Micron Technology In... 18.51 -1.39 -6.98%
Facebook Inc 94.01 -1.20 -1.26%
Apple Inc 121.30 -1.07 -0.87%
Frontier Communicati... 4.72 0.09 1.94%
Data as of Jul 31
Sponsors

Sections

Some families are outraged at the sums they've been offered by Lufthansa as compensation for the Germanwings plane crash in March which killed 150 people. More

The U.S. economy has had pretty ho-hum start to 2015. But the stage is set for a strong second half of the year. More

Fast-food chains that operate in more than 30 locations nationwide are the sole target of a new rule in New York to hike their minimum wage to $15. But consumers and small business owners, as well as some employees, may be the ones to pay the price. More

You can't blame it on the economy anymore. More Millennials now have jobs, but are still living at home. More