Madoff Trustee Sues Citi Hedge Fund Services

Jun 29 2011 | 11:05am ET

The trustee in the Bernard Madoff Ponzi scheme has sued Citigroup's hedge fund administrator as part of his case against one of the fraudster's feeder funds.

Irving Picard said yesterday that he had served Citi Hedge Fund Services of Bermuda with a summons. The administrator, which Citi purchased in 2007, serviced the Kingate Global and Kingate Euro funds from 2000 through 2007, earning it more than $4.2 million.

But CHFS used Madoff's bogus numbers and trade confirmations that were "facially impossible" to value the feeder funds, Picard said. The trustee is seeking $975 million from the Kingate funds, and has also sued the funds' custodian, HSBC Bank Bermuda.

The Kingate funds are being liquidated in the British Virgin Islands.

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