A US appeals court said that Citigroup must face a lawsuit over Bernie Madoff’s Ponzi scheme that seeks to recover $343m the bank allegedly received after it became aware the funds might have suspicious origins.

The appellate ruling resurrected a lawsuit by Irving Picard, the trustee tasked with recovering money for Ponzi scheme victims, alleging that Citi accepted money from Madoff’s phantom investment firm despite knowing facts suggesting it was engaged in fraudulent activity.