The US trustee filed a complaint in the US Bankruptcy Court against Kingate Global Fund and Kingate Euro Fund, the feeder funds of Bernard Madoff. The two investment funds, registered in the British Virgin Islands, are sued for the return of 255 million dollars.
It was stated in the complaint by Irving Picard that Kingate subsidiaries received payments of 100 million dollars and 155 million dollars from Madoff in the weeks before Madoff’s Ponzi scheme collapsed last December. By words of the trustee, transfers should be distributed among those who suffered from Bernard Madoff’s scheme, because his remaining assets will not be enough to reimburse investors.
It was said in the complaint that the trustee must pursue recovery from customers who received preferences and/or payouts of fictitious profits to the detriment of other defrauded customers whose money was consumed by the Ponzi scheme.
It was reported in the Wall Street Journal that the two British Virgin Islands funds fed some 1.7 billion dollars of client’s assets into Madoff’s scheme.
Madoff has been pleaded guilty to fraud, and now is due to be sentenced to prison on June 16, 2009.