The Supreme Court declined to take up Citigroup Inc.’s appeal of a $343 million lawsuit demanding the return of funds received from Bernard L. Madoff’s Ponzi scheme after the bank allegedly uncovered evidence that he was engaged in fraudulent activity, WSJ Pro Bankruptcy reported. Citi failed to win the high court’s review of litigation alleging the bank accepted money linked to Mr. Madoff’s phantom investment firm despite knowing facts that suggested a high probability of fraud. As is customary, the justices didn’t give any reason for their refusal on Monday to consider Citi’s appeal. Irving Picard, the trustee digging up money for Mr. Madoff’s victims, first sued Citi in 2010 as part of an international legal campaign targeting alleged beneficiaries of the Ponzi scheme. Mr. Picard has distributed nearly $14.3 billion to account holders of Mr. Madoff’s phantom investment firm, or nearly 70.5 cents on the dollar of allowed customer claims. The bank’s appeal concerned the proper legal standard for evaluating whether indirect recipients of Ponzi scheme proceeds acted in good faith, a possible defense against disgorgement. Monday’s order returns the lawsuit to the bankruptcy court, where Citi and Mr. Picard can resume litigating.
