(Adds background to case, paragraphs 4-8)
By Andrew Chung
June 1 (Reuters) - The U.S. Supreme Court on Monday refused
to hear a bid by major banks and companies including Koch
Industries Inc to prevent a trustee chasing money for victims of
imprisoned Ponzi scheme swindler Bernard Madoff from recouping
funds that were transferred overseas.
The justices left in place a lower court's ruling that
revived dozens of lawsuits filed by Irving Picard, the trustee
liquidating Madoff's firm, aimed at recovering the foreign
transfers. The defendants in the litigation had said the ruling
improperly extended the reach of U.S. bankruptcy law beyond the
country's borders.
The Manhattan-based the 2nd U.S. Circuit Court of Appeals
had overturned a bankruptcy judge's decision to dismiss the
lawsuits. President Donald Trump's administration agreed with
the 2nd Circuit ruling.
The dispute is part of Picard's 11-year search for tainted
money stemming from the largest Ponzi scheme in history, which
Madoff orchestrated through his New York firm, Bernard L. Madoff
Investment Securities LLC. The trustee has estimated that
Madoff's customers lost $17.5 billion in the fraud.
Madoff, 82, was arrested in 2008 and pleaded guilty in 2009.
He is serving a 150-year sentence in North Carolina. Madoff,
whose lawyer has said is dying of kidney failure, has sought
"compassionate release," saying he had fewer than 18 months to
live.
The case centers on 88 lawsuits filed against Koch,
controlled by the billionaire Charles Koch, HSBC Holdings Plc
, UBS AG and other entities accused of
receiving Madoff-linked money indirectly through offshore feeder
funds that had directly invested with Madoff.
Picard contends about $3 billion was fraudulently
transferred outside the United States, taking into account his
settlement with the British Virgin Islands-based Kingate feeder
funds.
The trustee sued Koch, a privately held industrial
conglomerate based in Kansas, in 2012 to recoup $21.5 million
Madoff was accused of sending to another British Virgin
Islands-based feeder fund and then to a Koch entity in Britain.
Koch was not accused of wrongdoing.
(Reporting by Andrew Chung; Additional reporting by Jonathan
Stempel; Editing by Will Dunham)
HSBC Holdings (HSBA)