Couple Sues JP Morgan Chase for $19 Billion Over Madoff Scheme
A couple who lost millions in Bernie Madoff's Ponzi scheme on Monday filed a lawsuit seeking $19 billion in damages from JP Morgan Chase, accusing the bank of aiding and abetting Madoff in his notorious multi-billion dollar scheme. Stephen and Lelya Hill filed the claim in a New York district court, essentially saying that JP Morgan, which was Madoff's bank of choice for twenty years, knew about the Ponzi scheme and took no action to stop it.
"JPMorgan was, in effect, the banking back-office for the Madoff Ponzi scheme, shuffling piles of money from one account to another at Madoff's request," explained Steve Bergman, the attorney representing the Hills in the case. "Had JPMorgan done even a perfunctory job of due diligence and fulfilled its duty to report Madoff's illegalities, it would have saved investors millions of dollars."
Interestingly, the Hills' suit was filed just a few days after JP Morgan dodged another $19 billion bullet in the form of a lawsuit filed by Irving Picard, the trustee assigned the task of recovering funds for victims of Madoff's fraud. That claim was thrown out in a US District court last week when the judge ruled that Picard did not have the authority to pursue the case.
Jennifer Zucarelli, a spokesperson for JP Morgan, said that the Hills' claim will likely end the same way Picard's suit did, being thrown out of court. "The purported class action is lifted almost verbatim from the trustee's lawsuit that Judge McMahon dismissed last week," she explained in a statement. "At the time the trustee's lawsuit was filed, we said that his claims were baseless and that we would vigorously defend the case. We believe this most recent lawsuit is equally meritless."
The Hills' attorney, meanwhile, says that JP Morgan handled Madoff's accounts since 1986, and the bank made considerable profits from his illegal activities. Madoff was arrested in December 2008, pleading guilty three months later to charges of running the largest pyramid scheme in history. He is currently serving a 150 year sentence for his crimes at a federal prison in Butner, North Carolina. To date, Picard has filed nearly 1,000 lawsuits seeking $100 billion against individuals and companies that allegedly profited from Madoff's activities.
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