Madoff trustee triples JPMorgan suit to $19 billion

Jonathan Stempel and Jochelle Mendonca Reuters 06/24/2011 18:07

The trustee seeking money for Bernard Madoff's victims is now demanding $19 billion in damages from JPMorgan Chase & Co, more than tripling what he hopes to recover from what had been the main bank for the now-imprisoned Ponzi schemer.

The amended complaint by the trustee Irving Picard adds new charges and was filed three days after the second-largest U.S. bank agreed to pay $153.6 million to settle U.S. Securities and Exchange Commission fraud charges.

Picard maintained that JPMorgan was "thoroughly complicit" in Madoff's fraud and ignored red flags. In his original complaint, made public in February, he had sought $6.4 billion, including $5.4 billion of damages and $1 billion for fraudulent transfers and claims.

"JPMorgan Chase chose to enable Madoff's fraud, not just through the various ways it participated in its activity, but by helping to cover Madoff's naked theft with the imprimatur of a globally recognized financial institution," the 155-page amended complaint said.

The higher damage request reflects "life-to-date damages," or what the trustee considers the minimum losses over the entirety of Madoff's Ponzi scheme.

Picard is also seeking at least $500 million that JPMorgan made "off the backs of Madoff's victims," and more than $400 million of alleged fraudulent transfers.

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