Sex, Drugs and Another Madoff Lawsuit

" Bernie Madoff to one of the biggest banks on Wall Street and if you thought you'd heard it all about the depraved but he Bernie Madoff will think again. Our Adam -- with the details about a shocking new lawsuit that may blow this case wide open once again what you have at a."

" David it was filed roughly thirty minutes ago as we first reported on Fox Business it is a lawsuit in the supreme court of the State of New York. Essentially our civil service court and it named several new players among them KPMG the powerhouse. Accounting firm. And -- UK office says allegedly KPMG. Failed to do their due diligence and auditing. Made off to London office and that's where the money laundering was taking place it names JPMorgan Chase. Saying that the bag along with KPMG and the Bank of New York Mellon were utterly complicit but you know about the Ponzi scheme. Actually profited from a we want to get into some of the deet tails of this with a first quote from the suit which was filed in which they talk about this. Conspiracy. They say the defendants reached an agreement to perform the acts complained of -- all were direct. Necessary and substantial participants. In the conspiracy that this lawsuit is being brought about half a man by the name of jay Wexler. He lives here in New York he lost. Lot of money like many of Madoff victims as well as the out rye select board market prime fund. It's essentially a -- fund that bought one of Madoff feeder -- years ago but. Bottom line is what they're saying is they were duped into buying it as this lawsuit goes on it gets even see your first JPMorgan Chase. Here's what JPMorgan is alleged to have done -- mister Madoff according to this civil suit. JPMorgan made nearly 483. Million dollars. By managing mister Madoff thank god that's no we know that mister Madoff had several bank accounts that JPMorgan. But the suit says have they've been doing their proper due diligence -- thing. As of bank in charge of a large. Bundled large bank account. They would have reported as somebody that something was wrong his money was being moved between New York. In London it goes on to say that JPMorgan Chase when they bought Bear Stearns back in march of 2007. Knew that this was a Ponzi scheme. Hold out but allowed some of bear investors to fall victim to mister Madoff the quote JPMorgan also learned about the -- in march of 2008. After it acquired Bear Stearns. Bear Stearns had done several deals with Madoff and their personnel served on boards we've made off. That's some of the stuff that's charged against the banks and against the conspirators. Were named in this suit. Then there's the sex drugs and Bernie Madoff we have heard as we've covered this case now for almost eleven months from different employees inside mister Madoff firm. That there were parties that sometimes involve wild sex parties as well as drugs now we have it in a public document. Starting in 1975. Madoff began sending a long time employee at office messenger to obtain drugs for himself. And the company the lawsuit goes on to say. There were topless entertainers wearing only G string underwear. Serving as waitresses and a culture of sexual deviant existed in the office. The employees had late night affairs an exciting places such as their bosses so for mister Madoff so. With whomever they could fine and finally made also affinity for escorts. Masseuse is at attractive female employees was well known and certain theaters were allowed. To participate. Now of course we have gotten reaction from different organizations and people named in this suit JPMorgan Chase no comment. New York bank Mellon has issued a coming I'll have that for you just a second Ike Sorkin mister Madoff. A lawyer has also issued a statement to us but first Bank of New York Melvin says. Bank of New York Mellon was not a custodian of mister Madoff firm. All litigation versus the company is still in the early stages the company and its subsidiaries have filed motions seeking the dismissal of these suits. KPMG also not commenting to Fox Business after we asked them to comment on this case and then finally of course Ike Sorkin. Mister Madoff attorney says. I fail to see the relevance to any legal issues rather he seems to be attempting to get press. From People Magazine. They see that mr. Sorkin is referring to the two lawyers. Nancy fine men and Jo -- it who met one on one with Bernie Madoff for several hours back in July. And a lot of this lawsuit. Is based on their confidential discussion. -- Bernie Madoff. "

" Okay now Adam Levine most shocking information of all -- did you mention is that. JPMorgan. New according this lawsuit nine months before became public. That that that Madoff was a total fraud and they've pulled their money out. During that time in those eight or nine months. From the time they pulled out to that time that we all including the victims of Madoff found out about it. The fraud. All why hundreds of millions of dollars could have been saved if people who pulled money out. We talked to one guy one victim of Madoff would actually put in a hundred million dollars just a month before the fraud was announced in December. So that this could beat this could put JPMorgan. Liable for a lot of money."

" Well it certainly is setting the target of JPMorgan Chase I can tell you that the lawyers have selected. Different entities to go after because they want to go after organizations. We've deep pockets but they're saying not only that JPMorgan Chase know about the Ponzi scheme because of their purchase of Bear Stearns went Bear Stearns went belly up back in March 2008. They're saying that JPMorgan Chase going back almost twenty years. Knew about -- the problems at the Madoff firm because they are managing his large accounts from which he was moving money back and forth. And they go indeed -- 200 page filing. They wanted details saying that JPMorgan Chase should have known because huge amounts of money were moving back and forth. And they never once questioned -- about any kind of suspicious activity report. Well Adam isn't it true that some JPMorgan. Customers were also customers are Bernie Madoff so. They could have saved some of their own customers money had they been open about about the fraud if they'd known about. -- that that is a validation but there's also the issue as we've reported again on Fox Business. That JPMorgan Chase was actually selling derivatives based on the Madoff firm. And when they pulled out what they've pulled their own money out didn't help people who had bought those those securities and derivatives rather that they were pulling out. So that's part of what this is about in this this lawsuit. Then there's of course I mean we now have the we've had different we have to. Confirmations. I can't give you their names but employees from inside the Madoff firm who talked to us about drugs and sex parties involving certain people at the firm. You heard it from -- not are you bringing we interviewed him back in January. Of this year right when this was still fresh news story I don't get time to play -- do helped out quite well listen let's look at that sound -- you heard what he had to say."

" On normally. The trading floor with regard to him having cocaine habit putting Madoff yes but wouldn't people say. People say that he was purchasing. Large amount of cocaine from. Individuals who are looking at the firm. There was there was an individual who's working there who. Who. A lot of people felt that. The reason for his termination was. At the time Bernie was trying to clean up the image of the Madoff family."

" So and so you don't -- that a lot of rumors in this has more specifics about the data. And a presumably if gas goes to court we will."