BUSINESS
12/03/2010 10:28 am ET | Updated May 25, 2011

JPMorgan Was Worried Madoff's Returns Were 'Too Good To Be True' Months Before Arrest

Bernie Madoff's outrageous, unflagging returns struck a JPMorgan employee as "too good to be true" two months before his arrest, according to newly unsealed documents obtained by ABC News.

Yesterday, the trustee charged with recovering funds for Madoff victims filed a $6.4 billion suit against JPMorgan, claiming that the bank abetted the massive ponzi scheme. Two months before Madoff was arrested, the ABC investigation found, JPMorgan's London office filed a "Suspicious Activity Report" with the U.K.'s Serious Organized Crime Agency, in which the bank said the financier's returns -- which consistently soared above 10 percent -- were "too good to be true."

When it filed the report, JPMorgan was already starting to move money away from Madoff, but it continued doing business with him, ABC says.

Citing Madoff's "lack of transparency," the JPMorgan report details concerns about "the investment performance achieved by its funds which is so consistently and significantly ahead of its peers year-on-year, even in the prevailing market conditions, as to appear too good to be true -- meaning it probably is," according to ABC.

Before Madoff's arrest, suspicions about the legitimacy of his stunning returns were widespread in the financial community. The SEC has been in hot water for apparently not acting on early tips about Madoff's massive fraud.

Read the full story at ABC News.