NY trustee sues offshore hedge fund in Madoff case

[July 15, 2009]  NEW YORK (AP) -- The trustee overseeing the liquidation of Bernard Madoff's assets has filed a $587 million lawsuit in New York against an offshore hedge fund that invested with the disgraced financier.

Trustee Irving Picard says the Herald Fund should have known its earnings were the product of Madoff's massive fraud. In papers filed in bankruptcy court in Manhattan, Picard says the fund should give back the money to burned investors.

A lawyer for the hedge fund, based in the Cayman Islands, could not be reached for comment.

HSBC bank, which withdrew the money for the hedge fund, also was named in the lawsuit. It has denied any wrongdoing.

The 71-year-old Madoff was sentenced to 150 years in prison late last month for orchestrating a multibillion dollar Ponzi scheme.

[Associated Press]

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