The bankruptcy trustee charged with trying to recover money for the victims of Bernard L. Madoff’s huge Ponzi scheme has sued the Swiss bank UBS and affiliates, accusing them of enabling the scheme.
The lawsuit, filed in United States Bankruptcy Court in Manhattan, says that Luxalpha, Groupement Financier and other European feeder funds withdrew $796 million from Bernard L. Madoff Investment Securities in the 90 days before the firm filed for bankruptcy in December 2008. They withdrew $1.12 billion in the previous six years, the complaint contends.
UBS served as custodian for Luxalpha and sponsored its formation, the complaint says. The defendants made at least $80 million from fees on raising money from investors and pooling it to invest with Mr. Madoff
“The ‘fees’ they received in their various roles were nothing more than ‘fees’ for looking the other way, and lending their prestigious name to legitimize and attract money” to the Ponzi scheme, according to the complaint, filed by the trustee, Irving H. Picard.
The lawsuit charges that UBS and the other defendants are liable for at least $2 billion. The complaint alleges 23 counts of fraud and breaches of fiduciary duty against the defendants.
A spokesman for UBS declined to offer an immediate comment on Wednesday.
Mr. Madoff is serving a sentence of 150 years in a federal prison in North Carolina.
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