By Christian Gutlederer
VIENNA (Reuters) - Austrian private bank Bank Medici was placed under state supervision on Friday amid bigger exposure to the Bernard Madoff scandal than previously disclosed.
A source close to the matter told Reuters on Friday the bank holds over $3 billion in funds exposed to what could be Wall Street's biggest fraud. It is still not clear how much cash has been lost.
Medici said last month that two funds -- Herald USA Fund and Herald Luxemburg Fund, with a total volume of $2.1 billion -- were exposed to the alleged fraud but did say by how much.
Austria appointed a supervisor to the bank, financial regulator FMA said, in the first known case where a government has stepped in to run a bank caught in the alleged $50 billion Madoff fraud.
The regulator also said Bank Medici's chief executive Peter Scheithauer and board member Werner Tripolt have resigned.
The appointment of a government supervisor means the bank cannot take any major decisions without state consent.
The bank -- founded and largely owned by high-profile banker Sonja Kohn, whom media say has close ties to Madoff -- said it would cooperate fully with the FMA.
"Bank Medici will in every way cooperate with the government supervisor and take all measures to ensure the most transparency and efficiency possible in solving the current challenges," it said in a statement.
It said Medici, which is 25 percent owned by UniCredit's
It said clients' assets were not at risk "because of its (Medici's) strong capital base."
Banks across the globe have unveiled billions of dollars in damage from the scandal, with a number of private banks catering to rich clients and fund-of-fund businesses particularly prominent victims.
Madoff's lawyer said on Wednesday his client was complying with a court-ordered deadline to tell U.S. regulators how much money he has left. Madoff is under house arrest in his Manhattan apartment and subject to electronic monitoring.
(Additional reporting by Sylvia Westall; Editing by David Cowell)
