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Ex-Bank Austria head investigated in Madoff case: prosecutors

November 25, 2013

By Michael Shields and David Holmes

VIENNA (Reuters) – The Vienna prosecutor’s office said on Monday it had widened its investigation into Bank Austria’s dealings with convicted fraudster Bernard Madoff to include the bank’s former Chief Executive Gerhard Randa.

The prosecutor’s spokeswoman Nina Bussek confirmed Randa, who was Bank Austria head from 1995 to 2003, was part of the investigation after Profil magazine reported the probe.

Randa, 69, did not immediately respond to an email seeking comment sent via his LinkedIn page. A phone call to someone of his name listed in the phone book went unanswered and a bank spokesman said he did not know how to contact him.

Profil quoted Randa as saying in an email that the bank had informed him on November 19 that he was a suspect in an investigation of the Primeo investment fund, but he had no more details beyond that.

Austrian authorities have been looking into the role Bank Austria, now a unit of UniCredit <CRDI.MI>, played in helping channel hundreds of millions of dollars in investor money to Madoff via investment funds.

Madoff, 75, is serving a 150-year prison sentence after pleading guilty in 2009. He has said he acted alone in perpetrating the fraud, which cost investors an estimated $17 billion.

Bank Austria says it won an Austrian appellate court ruling this year that fund prospectuses it was responsible for checking had been proper. It still faces suits from individual investors who say the bank failed to properly advise them.

“The bank will continue to defend itself vigorously in any lawsuits in Austria and elsewhere and will continue to cooperate with lawful and proper enquiries made through the justice system,” Bank Austria said.

“The allegations made in the United States about these matters were dismissed by the federal court in New York well over a year ago.”

A U.S. federal judge last year dismissed racketeering claims against UniCredit and Bank Austria, dealing the U.S. trustee representing victims of Madoff’s Ponzi scheme a setback in his quest for compensation for victims.

(Reporting by Michael Shields; Editing by David Holmes)