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

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,156.85 24.88 0.15%
Nasdaq 4,562.19 9.43 0.21%
S&P 500 2,001.57 2.59 0.13%
Treasuries 2.60 0.01 0.42%
Data as of 10:32pm ET
Company Price Change % Change
Bank of America Corp... 16.77 0.06 0.36%
Apple Inc 101.58 0.72 0.71%
Yahoo! Inc 42.59 -0.12 -0.28%
Microsoft Corp 46.52 -0.24 -0.51%
Alcoa Inc 16.28 0.12 0.74%
Data as of 4:03pm ET

Sections

Alibaba founder Jack Ma could earn as much as $867 million from his company's market debut. More

The Federal Reserve is probably not going to raise interest rates until the summer of 2015 at the earliest. More

Frederick Hutson launched Pigeon.ly in 2012 to help inmates communicate with their friends and family. He's on target for $1 million in sales this year. More

Occupy Wall Street offshoot Strike Debt says it has abolished nearly $4 million in private student loan debt for students who attended Everest College, part of Corinthian Colleges. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.