(Updates with new defendants in third paragraph.)
June 7 (Bloomberg) -- Kingate Global Fund Ltd., Kingate Euro Fund Ltd. and other defendants will be sued for $975 million by the trustee liquidating Bernard Madoff’s investment firm, according to a court filing.
Trustee Irving Picard today got permission from Judge Burton Lifland to file a new complaint against the two so-called feeder funds who invested with the con man, according to a law clerk for Lifland. Picard originally sued the funds in 2009, claiming $255 million that he said they withdrew before Madoff’s arrest in December 2008. The funds are being liquidated in the British Virgin Islands.
Picard’s proposed complaint names Federico Ceretti and Carlo Grosso, “Italian nationals operating from England” who funneled about $1.7 billion of investors’ money to Madoff’s Ponzi scheme from 1994 through the Kingate funds, which they set up and ran, he said. Ceretti, Grosso and the funds should have known of Madoff’s fraud and must return $975 million they redeemed, Picard said in the proposed, 129-page suit.
“These avoidable transfers to the Kingate funds are customer property that must be returned to the estate,” he said.
William Tacon of Zolfo Cooper, a liquidator for the funds, declined to comment on Picard’s pending suit. The document, attached to a request to Lifland for permission to file it, also names investment firm FIM Advisers LLP, run by Ceretti and Grosso, along with trusts and HSBC Bank Bermuda Ltd.
Antony Zacaroli, a lawyer for FIM, didn’t immediately return a call seeking comment.
The case is Picard v. Ceretti, 09-cv-1161, U.S. bankruptcy Court, Southern District of New York (Manhattan).
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