Skip to comments.Madoff victims' advocate: Citigroup saw red flags. Lawsuit seeks about $425 million from bank
Posted on 02/22/2011 1:18:16 PM PST by SeekAndFind
Citigroup saw several red flags in the dealings of Bernard Madoff's firm years before his multibillion-dollar fraud was exposed in late 2008, the firm's liquidator said in a newly unsealed lawsuit.
Irving Picard, a court-appointed trustee seeking to recover money for former Madoff clients, made the accusations in one of several complaints he has filed against big banks he says "enabled" the massive, decades-long Ponzi scheme by turning a blind eye to it.
"Citi had access to and received information placing it on inquiry notice that Madoff's advisory business was potentially a fraud, and/or that Madoff was making hundreds of millions, if not billions, of dollars in avoidable transfers," said the complaint, filed December 8 in U.S. Bankruptcy Court in New York and made public on Monday.
Portions of the court document were edited to conceal the names of bank personnel and others.
Citi said in a statement that the allegations in the lawsuit were false. "Citi will vigorously defend against these claims by the Trustee as they are entirely without merit and completely false," the statement said.
The lawsuit seeks about $425 million from the bank. Picard has also sued JPMorgan Chase & Co, Madoff's primary banker, for $6.4 billion.
(Excerpt) Read more at msnbc.msn.com ...
Citi is probably the worst bank I’ve ever dealt with.
JP Morgan Chase and Citi are just the tip of the Madoff iceberg... more to come...
They're too big to fail. Still.
I suspect there were probably a lot of people who saw the red flags on Madoff but just didn’t do anything. Think about how big his operation was. You don’t do something like that and not have people take notice. Plus, it doesn’t sound like it was all that sophisticated either, just a Ponzi with a regular 10% return each year...