The prosecutors suspect JPMorgan may have violated a federal law that requires banks to alert authorities to suspicious transactions, the newspaper reported.
"We believe that the personnel who dealt with the Madoff issue acted in good faith in seeking to comply with all anti-money laundering and regulatory obligations," JPMorgan spokesman Joe Evangelisti told the newspaper. (http://link.reuters.com/juw86t)
Evangelisti declined to comment on the New York Times report to Reuters.
The Madoff fraud was revealed in 2008, when the financier ran out of money to meet redemption requests from his customers. He is serving a 150-year prison sentence.
The trustee appointed to liquidate Madoff's firm has said JPMorgan, Madoff's main bank for two decades, and other banks ignored numerous warning signs about the firm's business, allegations the banks have denied.
(Reporting by Sakthi Prasad in Bangalore; Editing by Matt Driskill)