NEW YORK (Reuters) - A court-appointed trustee sued the brother, sons and a niece of imprisoned fraudster Bernard Madoff on Friday for $198 million, accusing them of milking the family-run business while they were executives of the firm.

Bernard Madoff walks back to his apartment in New York in this December 17, 2008 file photo. REUTERS/Shannon Stapleton/Files

“The Family Members were completely derelict in duties and responsibilities. As a result, they either failed to detect or failed to stop the fraud, thereby enabling and facilitating the Ponzi scheme,” trustee Irving Picard said in the lawsuit filed in U.S. Bankruptcy Court in New York.

“Simply put, if the Family Members had been doing their jobs honestly and faithfully the Madoff Ponzi scheme might never have succeeded, or continued for so long.”

He alleged that a total of $198,743,299 of customer money was misappropriated by Madoff’s brother Peter, sons Mark and Andrew and niece Shana; all were officers of Bernard L. Madoff Investment Securities LLC in New York.

The lawsuits are civil actions and none of the family members has been criminally charged. Each dismissed Picard’s allegations as baseless; they said they had “no prior knowledge” of Bernard Madoff’s crimes.

Madoff, 71, was arrested last December and told the FBI he had confessed to his sons that he orchestrated a worldwide, decades-long, multibillion dollar fraud.

He is serving a 150-year prison sentence after pleading guilty in March to the scam involving as much as $64.8 billion, a Ponzi scheme in which early investors were paid with money from new clients.

His wife, Ruth Madoff, was sued in July for $44.8 million by Picard, whose team of lawyers is working to find as much money as possible to return to the thousands of people bilked in Wall Street’s biggest investment fraud.

Madoff’s brother Peter was chief compliance officer at the company. He was also a director, manager, and shareholder of Madoff Securities International Ltd in London.

Sons Mark and Andrew each worked at their father’s firm for about 20 years and held the titles of co-heads of trading. The sons were also owners and directors of the London branch.

Shana Madoff was a lawyer at the firm with responsibilities to ensure that it met its legal and regulatory obligations.

Nine months after the spectacular fraud unraveled in the declining economy, the trustee has recovered $1.5 billion so far under the Securities Investor Protection Act; but his lawyers expect to collect more over time.

The case is Irving Picard, Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC v Peter Madoff et al 09-01503 in U.S. Bankruptcy Court for the Southern District of New York (Manhattan)