Citigroup (C) Also Gets Sued for $430 Million by Madoff Trustee

Irving Picard, the trustee in charge of recovering funds for investors in Bernie Madoff's Ponzi scheme sued Citigroup (NYSE:C) for $430 million for ignoring a possible fraud, according to court documents released Tuesday.

Picard sued Citi over fund transfers the bank performed in connection with a $300 million loan made to a large fund holding a BLMIS account, which was a "Madoff Feeder Fund." Citi's investment bank also made $130 million from swap transactions with another Madoff feeder fund, according to the document.

"Armed with public and considerable nonpublic information about Madoff, Citi knew or should have known of possible fraud at Madoff's investment advisory business," the trustee alleged.

Picard has also sued JPMorgan Chase (NYSE:JPM) for $6.4 billion for allegedly knowing that Madoff's business was fraudulent.

"Citi will vigorously defend against these claims by the Trustee as they are entirely without merit and completely false," said a Citigroup spokesman.