The trustee charged with trying to recover money for investors who were swindled by disgraced financier Bernard Madoff is now suing UBS AG and related entities and individuals on allegations they enabled Madoff’s Ponzi scheme.
As reported Nov. 25, 2010, by Investment News, the lawsuit – which alleges 23 counts of financial fraud and misconduct – seeks to recover at least $2 billion for Madoff’s victims. According to the complaint, UBS allegedly was an active participant in Madoff’s scam by serving as the sponsor, custodian and administrator of various affiliated feeder funds.
Madoff’s scheme could not succeed “unless UBS had agreed not only to look the other way, but also to pretend that they were truly ensuring the existence of assets and trades when in fact they were not and never did,” said David Sheehan, counsel for the trustee, in the Investment News story.
Madoff’s fraud, which is said to be the largest Ponzi scheme in U.S. history, was uncovered in December 2008. According to federal investigators, the scam may have begun as early as the 1980s. In total, investors lost some $65 billion.
On June 29, 2009, Madoff was sentenced to 150 years in federal prison.