As Saturday's deadline looms to file claims in the recovery of assets from Bernard Madoff's massive fraud, the trustee seeking money for the swindler's victims has sued an Austrian banker, claiming she masterminded a 23-year conspiracy that facilitated Madoff's Ponzi scheme and funneled billions of dollars into her "deliberately Byzantine" network of European banks.
The trustee, Irving Picard, is seeking $19.6 billion in damages from Sonja Kohn, whom his lawsuit names as the "mastermind" of Medici Enterprise.
The New York Times reports that the 157-page complaint filed today in Federal Bankruptcy Court in Manhattan is the first by Picard to invoke the Racketeer Influenced and Corrupt Organizations (RICO) Act.
Picard describes a European "labyrinth" of banks, hedge funds, asset management firms, shell companies and offshore trusts, which absorbed billions of dollars from Madoff.
"Sham entities" established and controlled by Kohn, in New York and Europe, "had or have no legitimate business purpose and existed or exist only to receive stolen Customer Property from Madoff," the complaint states.
The complaint also says Kohn received tens of millions of dollars in "kickbacks" and referral fees from Madoff, and that about half of the funds Picard is suing to recover $9.1 billion out of $19.6 billion is directly linked to Kohn and her family members.
"Sonja Kohn went by many names and operated under many guises, creating an international network of spurious investment entities and masterminding an illegal scheme not only to support the Madoff fraud, but also to enrich herself, her family, and the largest banks in Austria and Italy," Timothy Pfeifer of Baker & Hostetler, an attorney representing Picard, told the Times
In addition to Kohn of Vienna's Bank Medici, the suit names more than 50 other defendants, including UniCredit and Bank Austria.
To date Picard has sought more than $50 billion for eligible victims, and has so far recovered about $2.6 billion, through settlements and asset sales, according to the Times.
To read the Trustee's complaint click here.
To read the New York Times article click here.
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