Bank Medici said to have funneled in excess of $3 billion to Madoff's firm. The Austrian government has taken control of Bank Medici after the Vienna-based private bank lost more than $3 billion in the collapse of Bernard Madoff's New York-based asset-management firm Bernard L. Madoff Investment Securities (BLMIS), which is at the center of a multi-billion-dollar fraud investigation.

Danger

Citing its authority to step in when there is "danger to a credit institution's ability to fulfill its obligations to its creditors," the Finanzmarktaufsichtsbehoerde (FMA), Austria's financial-industry regulator says it has taken over Medici and appointed accountant Gerhard Altenberger of Vienna-based to supervise it.

Medici's CEO Peter Scheithauer and Medici board member Werner Tripolt, according to the FMA.

Medici acts as investment manager to several funds that entrusted all their assets to BLMIS. The bank is owned by the Austrian financier Sonja Kohn with Milan-based Unicredit Group holding a 25% stake.

Medici didn't respond to several requests for comment on the FMA's action. -FWR

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