For over a decade, Madoff ran his Ponzi scheme out of a bank account at JPMorgan. Instead of making trades with the money he received from investors, Madoff simply deposited the funds in an account at the bank, from which he paid dividends.
The bank account in which Madoff held investors funds nearly hit zero several times in 2008, a fact that JPMorgan could not have failed to notice, considering that the account had previously held billions.
In December of 2010, Irving H. Picard, the trustee for the investors who were defrauded by Madoff, filed a lawsuit against JPMorgan Chase, alleging that the bank knew that Madoffs transactions were fraudulent but continued doing business with him.
he trustees lawsuit alleges that JPMorgan made $1 billion in fees and profits from its role as Madoffs main banker. The trustee is seeking to recover $5.4 billion in damages.
When the trustees suit was filed, attorney David J. Sheehan noted that JPMorgan was BLMIS [Bernard L. Madoff Investment Securities] primary banker for more than 20 years and was responsible for knowing the business of its customersin this case, a very large customer.
He added, Madoff would not have been able to commit this massive Ponzi scheme without this bank. [JPMorgan] should pay the price for its central role in enabling Madoffs fraud.
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The suggestion that Madoff was so brilliant that he could swindle his clients is credible.
The suggestion that Madoff could have used his funds like a personal checking account, never buying stocks, simply putting money in and taking it out occassionally and that his BANKERS would NOT have noticed that?
THAT is NOT credible, folks.