Madoff associates hit with $60B RICO suit
In the days after Bernard Madoff was arrested in a Ponzi scheme of historic proportions, he presented himself as an austere financier. Here he leaves federal court in Manhattan. (Jan. 14, 2009) Credit: Getty Images
The trustee in the Bernard Madoff fraud case filed a massive $60 billion civil racketeering lawsuit Friday against scores of European bankers and financiers, including the woman dubbed Madoff's "criminal soul mate" in the Ponzi scheme.
In court papers filed in Manhattan federal bankruptcy court, trustee Irving Picard accused Austrian banker Sonja Kohn and 22 others with using her former Vienna bank as a major funnel of investors to Madoff for years.
Key to the alleged fraud conspiracy, Picard said in a prepared statement was Kohn's old organization, Bank Medici, which the trustee said Kohn formed with the help of Bank Austria.
"Kohn established Bank Medici in Austria as a mechanism to solicit investors for the Ponzi scheme," said Picard in a prepared statement, adding that UniCredit, another bank had a piece of the ownership.
Although no criminal charges have been filed against Kohn, in his statement Picard said that damage to investors was caused by her bank's "23-year criminal conspiracy with Bernard Madoff."
"In Sonja Kohn, Madoff found a criminal soul mate, whose greed and dishonest inventiveness equaled his own," said Picard.
Kohn's attorney Andreas Theiss of Vienna couldn't immediately be reached for comment. But in the past he has denied wrongdoing on her part.
While Bank Austria was supposed to have only a minority share of Bank Medici, Picard alleged that Kohn's institution acted as a de facto branch of Bank Austria, adding that Bank Austria personnel staffed Bank Medici.
"The Bank Austria connection provided Kohn and Bank Medici with the imprimatur of legitimacy they needed to feed staggering amounts of money into" Madoff, said Picard in his statement released as the lawsuit was filed.
Picard is seeking a total of $19.6 billion in the civil racketeering case, an amount that would be tripled under the federal RICO statute. Kohn, six of her relatives, Bank Austria, UniCredit and many other companies in New York, Europe and Gibraltar are named as defendants.
