CORRECTED-UPDATE 3-Madoff Trustee goes after banks

(Corrects to remove Reuters Instrument Code against “Fortis”
in paragraph 2 to make it clear the complaint is not against
Canada’s Fortis Inc but against the European bank of that

* Seven banks sued, including Citi, Merrill Lynch, Nomura

* Suit claims banks “enabled” Madoff Ponzi scheme

* Follows earlier suit against UBS in Zurich
(Adds suit against Manzke in paragraph 7)

By Ilaina Jonas and Yinka Adegoke

NEW YORK, Dec 8 (BestGrowthStock) – The court-appointed trustee
seeking to recoup money for victims of Bernard Madoff on
Wednesday said he filed complaints against seven global
financial institutions in hopes of recovering more than $1

Irving Picard, the trustee for the liquidation of Bernard
L. Madoff Investment Securities LLC (BLMIS), filed complaints
against Citigroup’s (C.N: ) Citibank, Natixis SA (CNAT.PA: ),
Fortis, ABN AMRO Bank N.V., Banco Bilbao Vizcaya Argentaria
(BBVA.MC: ), Nomura (8604.T: ) and Merrill Lynch, now owned by Bank
of America Corp (BAC.N: ).

None of the banks were available for immediate comment.

The complaints were filed under seal in the U.S. Bankruptcy
Court for the Southern District of New York.

The financial institutions received transfers of money from
BLMIS through numerous Madoff feeder funds when they either
knew or should have known of Madoff’s fraud, according to a
statement by the trustee.

“The complaints allege that the banks enabled the Madoff
Ponzi scheme by opening a spigot of new money into the Madoff
feeder fund network, by creating and offering derivative
investment products linked to various Madoff feeder funds,
including the Fairfield Greenwich, Kingate and Tremont families
of funds,” the trustee said in a statement.

Separately, Picard also filed a $100 million claim against
Sandra Manzke and her family and the Maxam Fund Group in
connection with the scheme for what the suit described as
Manzke’s role in continuing to enable and profit from the Ponzi

Picard is also trying to recover money for investors with
a claim against Swiss bank UBS (UBSN.VX: ) for $2.5 billion filed
in Zurich [nSGE6B7032].

Madoff, 72, is serving a 150-year prison sentence after
admitting to orchestrating a worldwide fraud of about $65

So far, Picard and his team of lawyers have recovered about
$2.6 billion. [IDnNO7292782]

The money will be distributed to victims of the
decades-long multibillion dollar fraud that shook confidence in
securities regulators when it was revealed two years ago on
Dec. 11, 2008 and Bernard L. Madoff Investment Securities LLC

The trustee is seeking $425 million of the more than $1
billion from Citi. About $300 million of that is connected to a
credit facility Citibank availed to a Madoff feeder fund, Rye
Select Broad Market Prime Fund L.P. The remaining $125 million
is related to a swap transaction linked to another Madoff
feeder fund, Fairfield Sentry Limited.

“Armed with considerable non-public information about
Madoff, Citi either knew or should have known that Madoff’s
investment advisory business was a fake, and that the funds
Citi received from these two Madoff feeder funds came from
Madoff’s fraudulent activities,” Picard said in a statement.

In the action against Natixis, the trustee is seeking to
recover at least $400 million the bank received in connection
with structured products.

The trustee is also seeking to recover $230 million from
Fortis Prime Fund Solutions Bank Ltd in connection with swap
transactions, $270 million from ABN AMRO and $45 million from
Bilbao Vizcaya Argentaria in connection with structured notes
issued by BBVA using Madoff feeder funds.
(Additional reporting by Dan Levine in San Francisco; Editing
by Bernard Orr and Muralikumar Anantharaman)

CORRECTED-UPDATE 3-Madoff Trustee goes after banks