Irving Picard, the trustee in charge of
recovering the funds for victims of Bernard Madoff’s Ponzi scheme,
has filed separate multi-million dollar claims against four Swiss
private banks.
Lombard Odier& Cie, Bordier & Cie,
Banque Cantonale Vaudoise (BCV) and EFG Private Bank,
allegedly received a total of $550m in client’s cash and securities
from Madoff feeder funds, before the funds entered liquidation.
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The claim
According to Picard, Bernard L. Madoff
Investment Securities (BLMIS), Madoff’s investment firm,
transferred part of the cash and securities it collected through
the fraudulent Ponzi scheme, to three British Virgin Island (BVI)
funds – Fairfield Sentry Limited, Kingate Global Fund and Kingate
Euro Fund.
Subsequently the funds redirected the money to
the Swiss private banks.
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By GlobalDataAfter the exposure of Madoff’s fraud in 2008,
the BVI funds entered the liquidation process.
Picard is counting on US bankruptcy law to
retrieve the funds. US bankruptcy law states the trustee is allowed
to recover funds transferred by a company in the period before
liquidation.
Banks’ rebut claims
The largest claim has been lodged against EFG,
which is allegedly in possession of $354m belonging to Madoff’s
defrauded costumers.
Lombard Odier follows with $179m, while BCV
and Bordier have been hit with claims for $10m and $8m
respectively.
BCV and Lombard Odier strongly rejected the
grounds of the lawsuit.
“The claim involves investors who redeemed
their shares in Madoff funds via BCV. It therefore does not concern
the bank directly, as BCV has never held proprietary positions in
Madoff funds,” said a BCV spokesman.
“Lombard Odier & Cie did not recommend any
of the funds managed by Mr Madoff’s company, nor the feeder funds,
as part of its investment policy. Investments in funds exposed to
Madoff were made by individual clients or third-party managers. In
this context, the role of Lombard Odier & Cie is limited to
that of a depository bank, holding deposits on behalf of its
clients,” said a Lombard Odier spokesman.
PBI contacted Bordier for comment on the
allegations but nobody from the bank was available to respond.
EFG said its policy is not to comment on legal
matters.
$332m re-distributed to Madoff
clients
Since its appointment in 2008, Picard’s staff
claim to have recovered $9.1bn through more than 1000 court cases
and settlement agreements.
Of these, $332m has been redistributed to
Madoff’s customers while $6.4bn is still unavailable due to appeals
and reserves.
74-year-old Madoff pleaded guilty in March
2009 and is serving a 150-year sentence.
