City probes fund manager for taking Madoff money

City investigators are investigating a former Austrian fund manger alleged to have been paid kickbacks for funnelling investments to disgraced financier Bernard Madoff.

The Serious Fraud Office believes Madoff paid Sonja Kohn through his London subsidiary Madoff Securities International £7 million over five years while she was chairman of Bank Medici. The money was allegedly to encourage her to supply Madoff with cash from investors.

The SFO is investigating Kohn in connection with potential criminal charges of money laundering and falsifying documents to receive kickbacks. US and Austrian prosecutors are also investigating allegations Kohn was paid kickbacks by Madoff. The three separate probes allege she received a total of $40million (£24.4million).

But the investigations do not claim Kohn knew the nature of Madoff's Ponzi scheme, which lost $50 billion. "I am actually the greatest Madoff victim," said Kohn, 60. "It is a tragedy for my family, my compnay and for me personally."

Madoff, 71, was jailed for 150 years on Monday after pleading guilty to charges that his investment advisory business was a pyramid scheme.