Irving Picard is a man engaged in battle. After unleashing over 100 lawsuits to claw back funds from facilitators of Bernard Madoff’s Ponzi scheme, Picard has opened fire on seven more banks, including Citigroup and France’s Natixis.
All of the suits seek the return of transfers from Bernard L. Madoff Investment Securities to various Madoff feeder funds. Of the more than $1 billion the receiver is seeking, the two banks account for $825 million.
“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 funds Citi received from these two Madoff feeder funds came from Madoff’s fraudulent activities,” Picard said. “Evidence of awareness of the fraud is clear.”
Nonsense, Citi retorts. The bank will “vigorously defend against these claims by the trustee, as they are without merit and entirely untrue,” it said in a statement. “Citi did not know about nor in any way assist in the Madoff fraud.”
Picard is seeking $425 million from Citi, mostly as a result of a $300 million credit facility it offered a Rye Investment Management fund. The receiver sued Rye’s parent, Tremont Group, on Tuesday.
Picard’s team also didn’t mince words about Natixis, from which it is seeking at least $400 million.
“Armed with knowledge of many badges of fraud, Natixis and its related entities nevertheless provided substantial momentum furthering Madoff’s Ponzi scheme, especially in Europe,” Mark Kornfeld, a lawyer working for Picard, said. “Over time, this international collaboration became critical to sustaining the fraud.”
Piacard is also seeking more than $320 million from Fortis’ prime brokerage, more than $270 million from ABN Amro, about $45 million from Banco Bilbao Vizcaya, at least $35 million from Nomura Bank International and at least $16 million from Merrill Lynch International.
“Although many of these banks questioned Madoff’s trading strategy and returns, they continued to structure transactions seeking to exploit Madoff’s consistent returns,” another Picard lawyer, Ryan Farley, said.
The seven join a roster of many prominent banks sued by Picard. The reciever is seeking $9 billion from HSBC, $6.4 billion from JPMorgan Chase and $2.5 billion from UBS.
Picard is facing a Saturday deadline to file clawback suits in the case. To date, he has collected some $2.6 billion for victims of the $65 billion Ponzi scheme and has filed lawsuits seeking the return of about $35 billion.