Judge To Rule On Racketeering Claims Against Unicredit

by San Antonio Attorney

The civil racketeering claims against Unicredit that seek to get money in order to pay back the victims of Madoff’s fraud will be considered by a federal judge.

The case against the bank, which allegedly profited from Madoff’s scam, is the largest lawsuit filed by the trustee for the liquidation of Bernard L. Madoff Investment Securities LLC.

Trustee Irving Picard seeks for damages of $19.6 billion which may triple if the racketeering laws are used. Italian bank Unicredit denied the lawsuit allegations.

On June 6, U.S. District Judge Jed Rakoff said he is going to evaluate if the claims is applicable for the case of the trustee.

The lawsuit was originally filed in a U.S. bankruptcy court in Manhattan and it was transferred to a U.S. district court.

Picard filed a lawsuit against Unicredit in December for funneling huge funds to the Madoff Ponzi scheme.

The fraud was exposed in December 2008 and Madoff pleaded guilty for orchestrating the Ponzi scheme in March 2009. The former investment firm did not invest the money from their clients to generate returns; instead it used the money it got from new clients in order to pay the existing clients. Madoff, the mastermind of the fraud, was sentenced to 150 years in prison maximum penalty.

There are over 1,000 lawsuits filed by Picard to recover approximately $100 billion from various defendants, which includes some of the largest banks in the U.S. like HSBC Holdings Plc and JPMorgan Chase & Co.

In February, Unicredit requested to move the case out of bankruptcy court saying that it does not involve bankruptcy claims.

At a hearing in May 31, the judge agreed to move out part of the lawsuit against the bank but he did not say which of the issues would be considered.

Aside from the racketeering claims against Unicredit, the judge is also going to consider if Picard can bring in common-law claims just like unjust enrichment and if he has the legal rights to sue on behalf of victims, considering that his duty is to liquidate the Madoff firm.

Picard used Racketeer Influenced and Corrupt Organizations Act (RICO) to request that the $19.6 billion damages be tripled.

Bankruptcy proceedings are quite complicated. Seek the advice of a San Antonio Attorney.

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