LOS ANGELES--(BUSINESS WIRE)--Aguirre Morris & Severson filed a complaint Friday on behalf of San Diego businesswoman Maria Akriby Valladolid in the Los Angeles Superior Court against a former subsidiary of American Express Bank International (AEBI) and a so-called feeder fund to Bernard Madoff's investment group. The suit alleges that the bank, the fund and others caused $1 million in losses by ignoring the warning signs of a Ponzi scheme.

“This case is about American Express Bank International’s negligent participation in the massive fraudulent scheme perpetrated by Bernard Madoff. It is not a case about market risk,” said attorney Mike Aguirre of Aguirre Morris & Severson in San Diego.

Aguirre Morris & Severson represents the plaintiff Maria Akriby Valladolid, who owned shares in Madoff-related funds worth approximately $1 million, according to the complaint.

“The magnitude of Madoff’s theft is matched only by the degree of AEBI’s stunning negligence, which allowed the fraud to continue unchecked for years,” continued Aguirre. “Our client won’t stand by and watch her money disappear based upon AEBI’s failure to properly investigate its own business interests on behalf of its clients.”

The lawsuit claims that in early 2006, the American Express Bank recommended Valladolid invest $1 million in the Madoff-related Sentry fund but did not reveal Madoff's link to Sentry. Valladolid originally opened accounts at American Express Bank in San Diego through Carlos Capitillo and Luisa Serena, who are named as individual defendants. London-based Standard Chartered Bank bought American Express' international banking unit for about $860 million in February 2008.

Following Capitillo and Serena's recommendations, Valladolid had American Express place $1 million of her assets into the Sentry fund according to the complaint. The complaint also alleges American Express acted as an intermediary between Vallodolid and Fairfield Greenwich to justify collecting fees from Capitillo and Serena.

Aguirre said that the complaint was filed in the state court because "this happened in California, and it should be decided in California courts."

Fairfield Greenwich is one of the largest Madoff feeder funds, and by its own tally had $7.5 billion invested with Madoff out of a total portfolio of $14.1 billion. On June 29, 2009, Madoff was sentenced to a maximum of 150 years in prison after pleading guilty to securities fraud and other charges in March of that year.

About Madoff’s Ponzi Scheme

At sentencing, the actual losses through Madoff’s Ponzi stood at $13.2 billion. The judge, however, said that was a conservative estimate. Based on what he told his sons in December 2008, the judge believed the fraud was worth $50 billion.

"Here, the message must be sent that Mr. Madoff's crimes were extraordinarily evil and that this kind of irresponsible manipulation of the system is not merely a bloodless financial crime that takes place just on paper, but it is instead one that takes a staggering human toll," U.S. District Judge Denny Chin said as he sentenced Madoff to 150 years in prison.

Before Madoff’s scheme became public, he had earned a reputation as a man of trust who had the golden touch. Despite the general ups and downs of the market, Madoff clients came to enjoy steady double digit returns. Among his celebrity clients were Steven Spielberg, Kevin Bacon and Hall of Fame pitcher Sandy Koufax.

One of AEBI’s two primary business lines was Global Wealth Management, which incorporates The Private Bank and Financial Advisory Services. According to their own information, “The Private Bank focuses on delivering an extensive range of investment management, trust and estate planning and banking services, including secured lending and investment certificates, to high net worth individuals.”

The day after Madoff's Ponzi scheme was revealed, Jeffrey Tucker, one of Fairfield Greenwich's founding partners, said the fund was shocked by the news and vowed to pursue recovery of its money. "We had no indication that we and many other firms and private investors were the victims of such a highly sophisticated, massive fraudulent scheme," he wrote in a prepared release.