Former clients of Bernie Madoff have filed a $19 billion lawsuit against JP Morgan Chase, alleging the bank knew about Madoff's schemes and covered up fraud.
A lawsuit filed by the trustee liquidating Madoff's former business, Irving Picard, was recently thrown out by a judge on the basis that only the victims can bring claims, leading to the lawsuit the new lawsuit being filed.
"JPMC chose to enable Madoff's fraud, not just through the various ways it participated in his activity, but by helping to cover Madoff's naked theft with the imprimatur of a globally recognized financial institution," Reuters quoted the lawsuit as saying.
The lawsuit also states that examination of Madoff's bank activity by JP Morgan would have revealed that the money, which was swindled from the plaintiffs, did not follow an investment pattern but was transacted back and forth between Madoff and his customers.
Picard has filed more than 1,000 lawsuits on behalf of the victims of Madoff's scheme and is expected to appeal the decision recently made by the judge, according to Reuters. The trustee has already had an $8.6 billion lawsuit tossed out by a judge, but is still seeking compensation for damages caused by Madoff's fraud.
Madoff was convicted and sentenced to prison for 150 years for his criminal activity.