JPMorgan Chase sued for $6.4B in Madoff scam

The trustee trying to recover money for investors cheated by Bernard Madoff is suing JPMorgan Chase for $6.4 billion, saying the bank had a central role in abetting the disgraced financier as he carried out his fraud.

Trustee Irving Picard announced Thursday the filing of the lawsuit in U.S. Bankruptcy Court in Manhattan. It is one of a series of suits filed in the past few weeks against not only banks but also Madoff family members and former employees and their relatives.

Picard alleges the JPMorgan Chase ignored the fraud and collected fees and profits, even though it had well-documented suspicions about the scam.

The lawsuit seeks to recover at least $1 billion in fees and profits and $5.4 billion in damages to be distributed to Madoff victims. The victims lost billions after Madoff revealed in December 2008 that his investment company was a gigantic fraud.

Madoff is serving 150 years in federal prison for the fraud.

Last week, the trustee sued one of Switzerland's biggest financial firms for $2 billion, accusing it of turning a blind eye to Madoff's fraud and helping the Wall Street con artist rip off his customers in the big Ponzi scheme.

UBS AG, the global Swiss company based in Zurich and Basel, "enabled Madoff's Ponzi scheme' through various international feeder funds and enabled the fraud despite knowing that it was likely that Madoff's operation was a giant scam, Picard charged in the suit filed in federal bankruptcy court in Manhattan.

Friday Picard filed 40 lawsuits to reclaim funds, 22 against relatives of the Madoffs and 18 against former employees of the company at the heart of the scam or their relatives.

With earlier reports from Newsday Staff Writer Anthony Destefano.