[ By Howard Haykin ] Bernie Madoff family members were hit with an expanded $255 million lawsuit from Madoff trustee Irving Picard.  Probably still smarting from the limitations Judge Jed Rakoff placed on his cases against certain Madoff investors, Mr. Picard decided to take it out on the Madoffs, whom he says should have caught the patriarch's Ponzi scheme and, thus, must return the benefits to victims. Mr. Picard noted that family members who worked at Bernie & Co. - better known as "Bernard L. Madoff Investment Securities LLC" - were "completely derelict" in ensuring that the investment firm's operations were legal. The trustee also added 3 former spouses of Madoff's sons as defendants, whom he says were unjustly enriched by the scheme through their marriages, and that "equity and good conscience" required that they forfeit money to victims, whom he believes are owed $20 billion overall. The complaint was filed late Friday with U.S. bankruptcy court in Manhattan, one month after winning court approval to add the spouses.  The case, which originally sought $226 million in November 2011 and $199 million in October 2009, is now $255 million. Family Defendants. First, there's brother Peter, who was CCO for the Madoff firm.  Bernie's son Andrew was co-director of trading, as was the estate of son Mark (who committed suicide in December 2010).  Shana, Bernie's niece and daughter of Peter, was a compliance officer. The spouse defendants are Deborah Madoff, who began divorce proceedings against Andrew Madoff in 2008; Stephanie Mack, Mark Madoff's widow; Susan Elkin, who divorced Mark Madoff in 2000. Family's Tally of Claims. Mr. Picard now seeks the following amounts from the family:

• $90.4 million from Peter Madoff.
• $81.3 million from Mark Madoff's estate.
• $73.8 million from Andrew Madoff.
• $15.3 million from Shana Madoff.
• $27.7 million from Deborah Madoff.
• $27.5 million from Stepnanie Mack,
• $2.4 million from Susan Elkin.
• Some claims overlap.

Like many others sued by Mr. Picard, the defendants have said the trustee waited too long to bring some of his claims.  The family defendants have long said their activities at Madoff's firm were legitimate, and that Bernard Madoff betrayed them.  Bernie Madoff was arrested on 12/11/08, and pled guilty 3 months later. Litigation has prevented Mr. Picard from distributing much of the $9.1 billion he has recovered for victims.  Just $1.1 billion has been distributed, including $791 million from the Securities Investor Protection Corp, Mr. Picard said in an April 25 filing. The trustee is appealing several court decisions dismissing many of his biggest claims, largely against banks that dealt with Bernard Madoff.  Through March 31, the cost of winding down Madoff's firm totaled $553.7 million, including $272.8 million of fees and expenses for Mr. Picard and his law firm. The case: Picard v. Madoff et al, U.S. Bankruptcy Court, Southern District of New York, No. 09-ap-01503. For further details, go to:  [Reuters, 5/7/12].