White-Collar Crime

Madoff Trustee Sues 'Criminal Soul Mate' Banker, Seeks $59B (Yes, Billion) in RICO Suit

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A “criminal soul mate” of convicted super-swindler Bernard Madoff masterminded a 23-year conspiracy, utilizing European and offshore banks, hedge funds and other financial entities, that made it possible for him to operate a record-breaking Ponzi scheme, contends a bankruptcy trustee who filed a lawsuit today that seeks nearly $59 billion in total damages.

“In Sonja Kohn,” the 62-year-old founder of Austrian-based Bank Medici AG, which is one of dozens of codefendants in the suit, “Madoff found a criminal soul mate, whose greed and dishonest inventiveness equaled his own,” says trustee Irving Picard in a statement, reports Agence France-Presse.

In the civil complaint he filed in U.S. Bankruptcy Court in Manhattan today, Picard asserts violation of the Racketeer Influenced and Corrupt Organizations Act, or RICO, among other claims, according to Bloomberg and the Deal Book blog of the New York Times.

The suit was among an avalanche of complaints filed recently by Picard, who is winding-up the business affairs of the jailed Madoff, as the statute of limitations is about to expire tomorrow, two years after his arrest.

Kohn worked for decades to feed $9.1 billion of investor money to Madoff through her bank, knowing his scheme was a fraud, while taking kickbacks for doing so, the suit alleges.

She and her lawyer could not immediately be reached for comment in the articles, but Kohn said last year that “I am actually the greatest Madoff victim. It is a tragedy for my family, my company and for me personally,” reports the Wall Street Journal. The Medici bank surrendered its license last year.

The suit seeks to hold the defendants accountable for the entire $19.6 billion it claims investors lost, in principal, to Madoff’s Ponzi scheme, explains the Wall Street Journal (sub. req.).

It appears that the $58.8 billion total damages figure cited in the Bloomberg article represents a trebling of these damages.

Related coverage:

ABAJournal.com: “Madoff Trustee Sues JPMorgan Chase, Seeks $6B for Alleged Blind Eye to Massive Swindle”

ABAJournal.com: “Madoff Trustee Sues Third Major Bank, Seeks $9B”

Reuters: “Madoff trustee files claims against accountants”

Wall Street Journal (sub. req.): “Life After Madoff’s ‘Big Lie’ “

Updated at 11 p.m. to link to additional coverage.

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