The trustee liquidating Bernard L. Madoff’s investment firm filed more than $50 billion in so-called clawback suits to compensate victims of the con man’s fraud since his arrest two years ago for masterminding the biggest Ponzi scheme in U.S. history.

Irving Picard, the trustee, filed hundreds of suits against banks, feeder funds, investors and others alleged to have profited from Madoff’s decades-long fraud. Among those sued was Madoff’s son Mark, who was found dead Saturday in Manhattan of an apparent suicide.
The deadline for Picard to file claims expired at midnight on Sunday. So far, he has recovered about $2.5 billion. Last week, he sued Bank Medici AG and its founder, Sonja Kohn, as well as Bank Austria, UniCredit SpA and dozens of other parties. He is seeking $19.6 billion from them, which could potentially triple to $58.8 billion under the Racketeer Influenced and Corrupt Organizations Act. It’s the biggest claim filed by Picard.
Kohn, 62, whom Picard called Madoff’s “criminal soul mate,” used a relationship with the financier that began in 1985 to help build the Vienna-based bank, feeding more than $9.1 billion of investor money into his company, Picard said in a complaint last week in U.S. Bankruptcy Court in New York.
“The illegal scheme enriched Kohn, her family, and scores of other individuals and entities, including the largest banks in Austria and Italy, at the expense of the BLMIS estate and on the backs of Madoff’s victims,” Picard said in court papers, referring to Bernard L. Madoff Investment Securities LLC.
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In the 153-page complaint against Kohn, Picard claimed she told investors she was very close to Madoff and could deliver higher returns on investments made through his firm. Instead, Madoff was secretly paying Kohn, who knew Madoff was running a fraud, to funnel money into the Ponzi scheme, Picard said.
According to the trustee, Kohn ran her own complex scheme centered on Bank Medici, parts of which overlapped with Madoff’s own fraudulent enterprise, delivering $9.1 billion into the Ponzi scheme. They funneled $4 billion of the total through feeder funds including Primeo Fund, Thema International, Herald Fund Alpha Prime Fund, Senator Fund and Herald (Lux), which placed all of their investors’ money with Madoff, according to Picard.
Shortly before Madoff confessed, in December 2008, Kohn withdrew $536 million from Madoff’s firm, Picard said, and took steps to hide her connection to the money manager.
(Source: Bloomberg