U.S. Sen. Frank Lautenberg's family foundation has sued to recoup more than $7 million it says it lost in the alleged $50 billion investment scam run by financier Bernard Madoff.

The Lautenberg Foundation filed a lawsuit Tuesday in a New Jersey federal court claiming that as the second-ranking official at Bernard L. Madoff Investment Securities LLC, Peter Madoff covered up, or at least ignored, signs of fraud by the company.

The Cliffside Park, N.J.-based foundation says in the suit that it invested $7.3 million with Madoff in 2001 and 2002. A statement from Madoff's company on Nov. 30 said the investment was worth more than $15.4 million. But the foundation says that amount was inflated.

The FBI arrested Bernard Madoff in December after investigators said he confessed to his sons that he had swindled investors out of $50 billion in a pyramid scheme. The 70-year-old former Nasdaq chairman remains confined to his Manhattan apartment under house arrest.

Peter Madoff, 63, has not been charged with a crime.

The lawsuit explains how he worked alongside his brother for 40 years, building the investment firm into a force, and served as senior managing director, director of trading, chief compliance officer and general counsel.

Lautenberg's son, Joshua Lautenberg, of Edwards, and daughter, Ellen Lautenberg, of Westport, Conn., say they invested a combined $1.6 million of their personal money with Madoff. They are also asking for it to be returned in the lawsuit.

Lawyers for the foundation and Peter Madoff did not return calls Wednesday to The Associated Press.