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Madoff trustee probes UniCredit for legal claims

LONDON (Bloomberg) - A UniCredit SpA unit that invested $1.1 billion of client money in Bernard Madoff "feeder funds" is being probed for possible legal claims by the liquidator for the conman's business.

An ex-employee of Pioneer Alternative Investment Management in Dublin should be forced to give testimony about the unit's internal examinations of the funds, trustee Irving Picard said in filings yesterday in US Bankruptcy Court in New York.

The testimony would assist Picard's "investigation of the role that Pioneer and other third parties may have played in connection with the affairs of" Madoff's company, the trustee's lawyer, Marc Hirschfield, said in the filing.

Picard has sued feeder funds and Madoff family members for the return of about $15 billion in fake profit from the fraud. Madoff, 72, pleaded guilty last year and is serving a 150-year sentence for running the largest Ponzi scheme in US history.

Pioneer was formed in 1999 and as of June 30 managed more than 2.5 billion euros ($3.21 billion), according to its website.

Renato Vichi, a spokesman for Milan-based UniCredit, could not be reached by phone and did not immediately return an e-mail seeking comment.

Picard asked US Bankruptcy Judge Burton Lifland to request an order from the High Court in London forcing testimony from the former Pioneer employee who lives in the city, according to the filing.

Picard said the testimony would cover Pioneer's findings related to the Kingate Global and Kingate Euro funds that are now in liquidation in Bermuda. He is also seeking data about UniCredit's Primeo fund, and the Herald and Thema funds managed by Bank Medici AG, all of which placed client money with Madoff.

Picard sued the funds earlier in New York. FIM Advisers LLP, which managed the Kingate funds, was ordered in May by a London judge to hand over additional documents to Picard.

Kingate was one of the largest feeder funds to Madoff, funneling more than $1.7 billion to his business. FIM had sought to limit the documents the funds provided to Picard to those dating from August 2005 through December 2008, when Madoff's fraud was discovered.