Bernard Madoff shares a jail cell with a 21-year-old drug dealer and socialises with a former crime boss and an Israeli spy, according to a legal action filed yesterday in New York.

Attorneys who interviewed Madoff in jail in July used information obtained from the fraudster to file a series of claims against major banks and accountancy firms, in an action that also throws light on the convicted fraudster’s life behind bars.

The 272-page complaint was lodged with the New York Supreme Court by the Californian law firm Cotchett, Pitre & McCarthy.

Madoff, 71, was sentenced in June to 150 years in prison for running a 20-year Ponzi scheme from his Manhattan fund management business.

In July Joseph Cotchett, a partner of the firm, became the first lawyer for victims of the scam to interview Madoff about his crimes, when he visited Madoff at the Federal Butner Correctional Complex in Raleigh, North Carolina.

Yesterday’s claims were based in part on information obtained during the interview, the legal firm said.

According to the document submitted to the court: “Madoff now shares a cell with a 21-year-old inmate convicted of drug crimes. Madoff sleeps in the lower bunk and he eats pizza cooked by an inmate convicted of child molestation.”

The document goes on to describe how Madoff’s recreation “consists of walking around the prison track at night”.

“He now spends time with former Colombo crime family boss Carmine Persico and Jonathan Pollard, who was convicted of spying for Israel,” the complaint said. “Most of his fellow inmates are in prison for drug crimes or sex crimes and Madoff will spend the rest of his life in prison with them.”

The legal action was brought by Cotchett, Pitre & McCarthy on behalf of Jay Wexler, a New York resident who invested in Rye Select Broad Market Prime Fund, a fund managed by Tremont Group, the hedge fund business of Massachusetts Mutual Life Insurance.

Mass Mutual’s hedge fund operations lost about $3.3 billion in Madoff’s Ponzi scheme. The insurer faces lawsuits over the losses.

The legal action accuses JP Morgan, Bank of New York (BONY) Mellon, KPMG’s UK and US offices and others of assisting Madoff in carrying out his $65 billion fraud.

“This fraud was not accomplished in isolation,” the complaint alleges. “The size and scope of the fraud necessitated the co-operation and assistance of many individuals and institutions who either knowingly or with willful blindness participated in the fraud.”

JP Morgan was the custodian of Madoff’s business accounts, moving billions of dollars for the fraudster between his New York and London businesses, the complaint said, while BONY Mellon administrated some of the funds that fed money to Madoff.

Both banks should have noticed the dubious nature of Madoff’s financial dealings, the complaint said.

The complaint accuses KPMG of failing to properly audit Madoff’s London business. KPMG said that it considered the latest allegations to be without merit, adding that it would defend itself vigorously.

The banks and accountancy firm, which all face other lawsuits related to the scam, have previously denied any wrongdoing in their dealings with Madoff.

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