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.

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.

Bernard 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 of as much as $64.8 billion.

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.

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

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

(Reporting by Grant McCool, editing by Gerald E. McCormick)