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Big Kickbacks to Austrian Banker in Madoff Case?

A former Austrian fund manager is being investigated by prosecutors who believe she was paid more than $40 million to channel billions of dollars of investments to Bernard Madoff, the Wall Street Journal reported.

Prosecutors in the US, UK and Austria believe Sonja Kohn received kickbacks from Madoff while she was a chairwoman of Austrian Bank Medici through separate companies she controlled, the paper said, citing affidavits detailing the investigations and hundreds of documents collected by Austrian prosecutors.

Kohn, a 60-year old former Wall Street broker, hasn't been charged with anything. She repeatedly denied any wrongdoing.

"I am actually the greatest Madoff victim. It is a tragedy for my family, my company and for me personally," Kohn told the Wall Street Journal.

A spokeswoman for Bank Medici said neither Kohn nor the bank had received kickbacks.

Prosecutors allege that in exchange for the kickbacks, Kohn turned three Bank Medici funds into "feeder funds" that supplied Madoff with an estimated $3.5 billion from European investors, the paper reported.

US and UK prosecutors filed affidavits to request documents, bank records and witness statements from Austrian prosecutors to further their own investigations, it said.

Earlier this week, Madoff was sentenced to 150 years in jail for Wall Street's biggest investment fraud, of $65 billion.

On Thursday, marshals seized the luxury $7 million New York City penthouse apartment he used to share with his wife Ruth.