An Austrian woman dubbed Bernard Madoff's "criminal soul mate" was named Friday in a $60-billion civil racketeering lawsuit that accused her of devising a scheme to pump billions of dollars from innocent investors through a labyrinth of overseas banks and feeder funds to Wall Street's largest Ponzi scheme.
In a complaint filed in Manhattan federal bankruptcy court, Irving Picard, the trustee unraveling the Madoff debacle, said that since 1987 banker Sonja Kohn and 22 other defendants used her former Bank Medici of Vienna to funnel cash into Madoff's operation when he began to run out of new investors.
While Picard has been filing an avalanche of "clawback" lawsuits in recent weeks to recoup money for investors, the case against Kohn, who reportedly had ties to Russian financiers, was the first time the trustee invoked the federal civil racketeering statute. In trying a law normally used against organized crime, Picard would be able to triple his damage claim of $19.2 billion to nearly $60 billion.
"In Sonja Kohn, Madoff found a criminal soul mate, whose greed and dishonest inventiveness equaled his own," Picard asserted in a statement. Kohn has never been charged with a crime in the Madoff case. Madoff is serving 150 years in prison.
The lawsuit is not Picard's first against Kohn, who for a time worked in New York City and lived in Rockland County. Earlier in the week Picard listed her as a defendant in a clawback lawsuit case against British banking giant HSBC Holding plc.
Clemens Trauttenberg, an Austrian attorney representing Kohn, wasn't aware of the latest filing. But he said Kohn believed Picard was barking up the wrong tree in targeting her.
"We will certainly fight [these] completely wrong allegations," said Trauttenberg, predicting that Picard wouldn't be able to produce evidence of wrongdoing by Kohn.
In the complaint, Picard painted a picture of Kohn directing her "Medici Enterprise," complete with a "Byzantine structure" of accounts and feeder funds, since 1985, when she met Madoff in New York. She received $62 million in secret kickbacks to bring in investors, Picard alleges in court papers.
Bank Medici was established with the help of Bank Austria, Picard said. He added that Unicredit, a large Italian bank, helped in the arrangement. Both were named as defendants.
"The Bank Austria connection provided Kohn and Bank Medici with the imprimatur of legitimacy they needed to feed staggering amounts of money" to Madoff, Picard said.
"It is our policy not to comment on pending legal matters," Unicredit group said in a statement Friday. "We intend to defend ourselves vigorously."
Picard has until midnight Saturday to file further clawback suits chasing other investors' and banks' assets and funds.