Business

MADOFF VICTIMS TARGET BANK

Angry victims of Bernie Madoff opened up a new front last week in their battle to regain some of the $65 billion lost to the epic Ponzi schemer — they are demanding an elite investment bank fork over as much as $7.5 million in fees it pocketed after handing over their cash to one of the fraudster’s giant feeder funds.

The investors claim Standard Chartered Bank blindly handed over the funds to Walter Noel’s Fairfield Sentry fund and then collected the fees on “phantom valuations,” provided by Madoff. The demand for the return of fees, which came in a lawsuit filed in Miami this month, is the first time victims have lashed out at investment bank fees.

“It is our view that this case is indisputable,” said Scott Dimond, the lawyer representing the victims. “We are not seeking the return of the principle investment here, we simply believe that Standard Chartered should not have been collecting fees for investing in assets that did not exist.”

Dimond estimates that Standard Chartered, which bought the international banking arm of American Express for $823 million last year, placed about $300 million of its clients’ cash with Fairfield Sentry that was in turn invested in Madoff’s Ponzi scheme.

Standard Chartered declined to comment on the lawsuit.

If the Miami case succeeds it could be the start of a slew of lawsuits against Standard Chartered and other investment banks that charged their clients fees for investing with Madoff.

Jake Zamansky, a New York securities lawyer, claims to have amassed a group of additional former Standard customers who want to sue the bank for the money they lost and for the fees they paid.