The trustee liquidating Bernard Madoff’s firm is seeking to recover nearly $1 billion from BNP Paribas, alleging that the business unit BNP Arbitrage received transfers from a Madoff feeder fund, according to a complaint filed in the US Bankruptcy Court in the Southern District of New York.

The complaint forms part of efforts by Irving Picard, the court-appointed trustee under the Securities Investor Protection Act (SIPA), to recover property from the $65 billion Ponzi scheme run by Madoff's firm, Bernard L Madoff Investment Securities.

The latest ruling shows Picard is seeking to recover around $975 million in transfers made to BNP Arbitrage. These were transfers initially made by BMLIS to Harley International (Cayman), of which “some or all” were subsequently transferred to BNP Arbitrage, either directly or indirectly, according to the filing.

BNP Paribas did not reply to a request for comment at the time of publication, but reports elsewhere said it had rejected the claim as being without merit.

The trustee previously filed an adversary proceeding against Harley in the Bankruptcy Court, and on 10 November 2010 the court entered a default judgment against Harley to the tune of $1.07 billion, according to the filing, which goes on to say that none of these monies have as yet been recovered.

During the six-year period before that filing, BLMIS made large transfers to Harley, which “were and continue to be” property under SIPA, the trustee alleges.

The complaint alleges the trustee is entitled to a judgement against BNP Arbitrage, the defendant, recovering a value equivalent to transfers received from Harley, for the benefit of the BLMIS estate.

BNP Paribas is not the only household-name bank to be embroiled in the aftermath of the Madoff scandal. The trustee earlier this year changed the details of his lawsuit seeking at least $2 billion from UBS and related feeder fund defendants, and is also trying to recover at least $19 billion in damages from JP Morgan Chase & Co, up from the $5.4 billion in damages previously sought.

Meanwhile, HSBC announced in June it would pay $62.5 million to settle claims in a Madoff-related class action lawsuit, pending at the time against it in New York. The announcement came just days after the personal possessions of the convicted fraudster were auctioned to help repay victims of his scheme.