A federal judge approved JPMorgan Chase & Co. (NYSE:JPM)’s $543 million deal ending lawsuits stemming from the bank’s relationship with Bernard Madoff.

Bernard Madoff

The bank’s settlement with the trustee for Bernard Madoff’s defunct firm was approved by the judge overseeing its liquidation.

JPMorgan’s Madoff linkage

Bernard Madoff, one of the most notorious financial criminals in living memory, orchestrated a Ponzi scheme in which investors lost over $17 billion. JPMorgan Chase & Co. (NYSE:JPM) was Bernard Madoff’s banker for about two decades. The bank’s national banking unit reportedly violated the Bank Secrecy Act, which mandates that banks report any suspicious activity to the government.

Last year, Madoff disclosed that large banks like JPMorgan Chase & Co. (NYSE:JPM) knew that his brokerage firm was a Ponzi scheme. He also provided evidence that banks knew a great deal about his Ponzi schemes.

Last month, it was reported JPMorgan planned to reach about $2 billion in criminal and civil settlements with federal authorities over Madoff case. The settlement relates to the federal authorities suspecting JPMorgan Chase & Co. (NYSE:JPM) ignored signs of Bernard L. Madoff’s Ponzi scheme.

Federal Judge’s approval

On Tuesday a spokeswomen for the trustee liquidating Bernard L. Madoff Investment Securities LLC confirmed that U.S. Bankruptcy Judge Stuart Bernstein approved JP Morgan’s $543 million deal, which was made public last month.

JPMorgan Chase & Co. (NYSE:JPM) will pay $218 million to resolve class-action litigation and $325 million to resolve claims brought by the trustee, Irving Picard. The trustee has estimated that the Ponzi scheme, the largest in history, cost investors over $17 billion of principal. The trustee has to date recovered over $10 billion for victims, including the JPMorgan settlement.

Madoff settlement ended JPMorgan’s record

Last month, JPMorgan Chase & Co. (NYSE:JPM)’s fourth quarter results revealed its quarterly profit fell 7.3% on $2.6 billion of settlements tied to Bernard Madoff’s Ponzi scheme as rising legal costs ended the firm’s three-year streak of record annual earnings.

Before the JPMorgan accord, the trustee Picard’s team had recovered $9.5 billion through lawsuits and out-of-court settlements, including $5 billion from the estate of Jeffry Picower, who began investing with Madoff in the 1970s. The trustee named Picower as the biggest beneficiary of Madoff’s scheme. Picower had a heart attack and drowned in a pool in Florida in October 2009.

The trustee has distributed about $4.9 billion to victims, with billions more held in reserve until legal issues are resolved.