WASHINGTON (Bloomberg) ? Gary Winnick, Global Crossing Ltd.'s founder and ex-chairman, and 22 other former executives were sued for $1.7 billion by J.P. Morgan Chase & Co., which claims they fraudulently misrepresented the fibre-optic company's finances.

Winnick and the other executives disguised the company's decline to secure $2.25 billion in loans shortly before Global Crossing filed for Chapter 11 protection, according to a suit filed October 27 in New York state court.

Allegations of wrongdoing that dogged Winnick and other former officials haven't ended with the company's emergence from the second-largest US telecommunications bankruptcy and sale to Singapore Technologies Telemedia Pte. J.P. Morgan's lawsuit claims that two months before Global Crossing's January 2002 bankruptcy filing, company executives told banks the company was on sound financial footing, the suit said.

Those assertions "were the product of a massive scam devised, directed and controlled by Winnick and other Global Crossing executives and top managers to artificially inflate Global Crossing's financial figures," J.P. Morgan said in the suit, which was disclosed in a filing with the US Securities and Exchange Commission December 8 by Global Crossing, which isn't a defendant in the case.

Gary Naftalis, a lawyer representing Winnick, didn't immediately return a call seeking comment.