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New York - E-mails and other internal documents show that executives at JPMorgan Chase were complicit in Bernard Madoff's massive fraud, lawyers seeking to recover funds for his victims said Thursday.

The lawyers work for a court-appointed trustee who filed a $6.4 billion complaint under seal late last year against JPMorgan, the disgraced financier's primary bank for two decades. The parties agreed to make portions of it public on Thursday.

Among the e-mails cited is one in 2007 in which an unidentified JPMorgan Chase employee recounts being told "there is a well-known cloud over the head of Madoff and that his returns are speculated to be part of a (P)onzi scheme."

The material supports allegations that "the bank's top executives were warned in blunt terms about speculation that Madoff was running a Ponzi scheme," attorney Deborah Renner said in a statement. "Yet the bank appears to have been more concerned only with protecting its own investments in (the Madoff firm's) feeder funds."

In a statement on Thursday, JPMorgan said the complaint "is meritless and is based on distortions of both the relevant facts and the governing law."

It added that the bank "intends to defend itself vigorously against the unfounded claims brought by the trustee."

The bank has denied having any suspicions about Madoff, saying it followed all commercial banking regulations in its dealings with him.

Trustee Irving Picard is in the midst of a two-year campaign to recover funds for Madoff's burned clients with a flurry of lawsuits against financial institutions and brokers. Last year, he filed multibillion-dollar suits against HSBC and UBS AG over similar allegations the banks deny.

Madoff, 72, is serving a 150-year sentence in a federal prison in North Carolina after admitting that he ran his scheme for at least two decades, using his investment advisory service to cheat thousands of individuals, charities, celebrities and institutional investors.

Losses are estimated at around $20 billion, making it the biggest investment fraud in U.S. history.

Picard's lawyers have accused JPMorgan and its affiliates of being "willfully blind" to "numerous red flags surrounding Madoff," including the unwavering double-digit returns he reported to wealthy investors on fictitious account statements.

According to the lawsuit, JPMorgan initiated a thorough investigation of Madoff in 2008 after the nation's financial crisis had begun - and that the inquiry was frustrated at every turn.

Madoff feeder funds "repeatedly found creative ways to dodge questions" about their knowledge of his investment schemes, the suit says. Bank Medici, one of Madoff's biggest partners, promised to provide various risk reports, but then balked.

By October, a member of the bank's due diligence team was questioning claims by a big feeder fund, Fairfield Greenwich, that it had access to the secretive office suite where Madoff did business.

"Judging from the lack of thoroughness of some of their other due diligence I am not entirely convinced that Madoff allowed them to actually enter the trading area," the employee wrote.

Another bank official expressed amazement that the bank and hedge fund executives who were funneling money to Madoff had asked so few questions about his strategy, and observed that some seemed afraid to confront him.

"It's almost a cult (Madoff) seems to have fostered," the official wrote.

The complaint also cites a suspicious activity report JPMorgan sent to the Serious Organised Crime Agency in London on Oct. 28, 2008, less than two months before Madoff revealed himself to be a fraud.

The suit says the report concluded Madoff's balance sheet appears "too good to be true - meaning it probably is."

The report was triggered in part by a strange conversation that a bank employee had with one of its Madoff investment partners, Aurelia Finance. During that conversation, according to the suit, "Aurelia Finance representatives made threats ... referring to 'Colombian friends' who could 'cause havoc' if the bank went ahead with a plan to redeem some of its Madoff investments."

The JPMorgan employee, the suit says, took that to mean that Colombian drug dealers were somehow involved in the investment deal, and would be angered if the bank dropped out.

JPMorgan began trying to pull more Madoff investments in October, including $167 million placed through Fairfield, according to the suit.

By the time Madoff was arrested in December, it had managed to sell off all but $35 million of its stakes in his feeder funds.