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Citigroup’s Bermuda affiliate served with summons from Madoff liquidator

Madoff connection: The Kingate Management sign that used to be displayed on Front Street

NEW YORK (Bloomberg) A Citigroup Inc affiliate was served with a summons by the trustee liquidating Bernard Madoff’s firm as part of a lawsuit against so-called feeder fund Kingate Global Fund Ltd, according to a court filing.Citi Hedge Fund Services Ltd of Bermuda was administrator for the Kingate funds, which put all their money in Madoff’s Ponzi scheme, according to trustee Irving Picard’s lawsuit. Instead of verifying Madoff’s pricing information, Citi Hedge, which is named as a defendant in the lawsuit, calculated the Kingate funds’ value using the con man’s data and reviewed trade confirmations that were “facially impossible”, he said in a suit amended this month.Citi Hedge was bought by Citigroup in 2007, according to Picard. Kingate Global paid the firm or its predecessor $4.2 million from 2000 to 2007, and Kingate Euro Fund Ltd paid a smaller amount, he said.In the suit, Picard said the Kingate funds and other parties should have known of the fraud and should be ordered to return $975 million in funds they took out of the Ponzi scheme before Madoff’s 2008 bankruptcy. HSBC Bank Bermuda Ltd, custodian for the Kingate funds, also was named as a defendant.The funds are being liquidated in the British Virgin Islands.Danielle Romero-Apsilos, a Citigroup spokeswoman, didn’t immediately respond to an e-mail seeking comment. HSBC Holdings Plc, which has asked a judge to dismiss a $9 billion Picard lawsuit against it and feeder funds, has said it is fighting Madoff-related claims. William Tacon of Zolfo Cooper, the liquidator for the Kingate funds, has declined to comment on Picard’s suit.l Picard has defended his $7.2 billion settlement with the estate of Jeffry Picower, who according to the trustee may have suspected Madoff of running his Ponzi scheme. Madoff investors who sought to sue Picower’s estate challenged the accord in US District Court in New York. Picower drowned in 2009.