Bernard Madoff's Ponzi scheme funded "a family piggy bank" that funneled at least $198, 743,299 of stolen customers' money to his brother, sons and niece, according to a lawsuit filed against the Madoff family today by the federal bankruptcy trustee overseeing the liquidation of the Madoff business.
The suit alleges Madoff's Ponzi scheme might have never succeeded or continued for so long if the family members had not been "completely derelict" in their duties as firm employees.
The suit seeks a return of the money from Madoff's brother Peter, his niece Shana and his sons Andrew and Mark.
There was no immediate reaction from lawyers or spokespersons for the family members.
The suit provides new details of the alleged role of the family members, including an allegation that the money was funneled to them through fabricated purchases of stock, which they supposedly then sold for the cash proceeds.
Peter Madoff serves as the firm's chief compliance officer. His daughter Shana "held herself out" as compliance counsel, according to the lawsuit.
Madoff's sons Mark and Andrew shared the title of co-director of trading at Madoff's firm, the suit says.