Paris prosecutor launches probe into Madoff affair

PARIS (Reuters) - The Paris prosecutor's office has launched a preliminary investigation into the ramifications in France of the alleged scam orchestrated by the U.S. financier Bernard Madoff.

"We have launched a preliminary investigation after a complaint lodged by a private person," a spokesman for the prosecutor's office said on Tuesday.

Earlier this month, a French woman filed suit against Swiss bank UBS alleging "fraud and betrayal of trust," the first lawsuit in France connected with Madoff, who is accused of committing a $50 billion fraud.

The woman placed 540,000 euros (500,400 pounds) with UBS in 2006 and the company invested the money in the LuxAlpha fund in Luxembourg.

UBS has been hit by the fallout since it was a custodian of the LuxAlpha fund, which invested in Madoff-related products.

Many clients who invested in LuxAlpha now want their money back, and a dozen Paris law firms plan to coordinate legal action against UBS over the Luxembourg-based fund.

UBS spokesman Christopher Meyer reiterated the bank's previous statement, saying: "UBS supported clients to establish structures there (in Luxembourg) at their request. Madoff was not on UBS' wealth management recommended list for direct investment options."

Madoff was arrested and accused last month over what could be the biggest Ponzi scheme in history.

In France, combined losses caused by alleged Madoff schemes are estimated at 500 million euros, according to the French markets regulator AMF.

(Reporting by Thierry Leveque; writing by Astrid Wendlandt; Editing by Rupert Winchester and John Wallace)