Madoff Trustee Sues BofA (NYSE:BAC), Citigroup (NYSE:C) for Over $1 Billion

Citigroup (NYSE:C) and Bank of America (NYSE:BAC) were among a group of banks sued for over $1 billion by Madoff trustee Irving Picard.

Other banks included in the litigation are Natixis SA, Fortis Prime Fund Solutions Bank (Ireland) Ltd., ABN Amro Bank NV, Nomura Bank International Plc. and Banco Bilbao Vizcaya Argentaria SA.

The banks being sued are alleged to have known, or should have known, that Madoff's investments were a fraud.

Citigroup is considered the most liable of the banks, and is being sued for $425 million, while Bank of America's alleged liability is a paltry $16 million in comparison.

Of those banks commenting, all of them said they had no idea of the shenanigans Madoff was involved in, and would vigorously defend against the lawsuit.

Picard, who is in charge of liquidating the remaining assets of Madoff's firm, said, "The complaints allege that the banks enabled the Madoff Ponzi scheme by opening a spigot of new money into the Madoff feeder fund network, by creating and offering derivative investment products linked to various Madoff feeder funds. Often, the derivative products were developed in conjunction with the Madoff feeder funds."