Thursday, 24 July 2014
Last updated 2 hours ago
Dec 13 2010 | 3:33am ET
Irving Picard, the court-appointed receiver seeking to recoup money for victims of the Bernard Madoff Ponzi scheme, saved his biggest bid for last.
Picard on Friday sued Austrian banker Sonja Kohn and dozens of firms linked to her for $19.6 billion—all of the principal he estimates was lost by Madoff’s investors and more than twice as much as he has sought in any of the thousands of other lawsuits he has filed since Madoff’s arrest two years ago.
The lawsuit levels 22 counts of civil racketeering, conspiracy and fraud against Kohn, her Bank Medici and others. Under U.S. racketeering laws, the defendants could be liable for triple damages, bringing the total possible judgment against them to nearly $60 billion.
“In Sonja Kohn, Madoff found a criminal soul mate, whose greed and dishonest inventiveness equaled his own,” Picard said in a statement. The lawsuit is unusual in its frank allegations of criminal behavior on Kohn’s part; it alleges that “the Ponzi scheme could not have continued for as long as it did” and calls Medici a “criminal” organization.”
According to Picard, Kohn and her companies fed more than $9.1 billion to Bernard L. Madoff Investment Securities. In exchange, Madoff allegedly paid Kohn at least $62 million in “secret kickbacks”—payments that were kept secret even from others within his firm. In addition to payments from Madoff, Kohn was also paid by investors counting on her to get access to Madoff.
What’s more, Kohn and her family are alleged to have withdrawn more than $536 million from their Madoff accounts in the weeks and months before the scam collapsed.
Andreas Theiss, a lawyer for Kohn and Bank Medici, dismissed the allegations as “ridiculous.”
“Ms. Kohn and Bank Medici are victims of Madoff,” he told The New York Times. “We said it two years ago, and there is no evidence in this lawsuit to the contrary.”
The lawsuit against Kohn was the last filed by Picard before his Saturday deadline, the two-year anniversary of Madoff’s arrest. He has filed more than 1,000 such lawsuits seeking the return of more than $50 billion; more than $35 billion in claims have been filed over the last several weeks.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…