Citigroup ignored “numerous red flags” in its dealings with convicted Ponzi king Bernie Madoff years before his massive scheme came to light in 2008, according to a newly unsealed lawsuit.

Irving Picard, the court-appointed trustee charged with clawing back billions on behalf of Madoff victims, is seeking $425 million from Citi, one of several big banks in Picard’s crosshairs.

The suit claims that the bank had reservations about Madoff as early as 2005 but sought to punt its Madoff exposure to other financial firms rather than relay its concerns to regulators.

“We’re needing to terminate our Madoff trade. Do you have an appetite for that risk over there?” read an e-mail from one Citi trader to another bank, which was not identified in the claim.

Picard also accuses Citi officials of passing up an opportunity to meet with Madoff whistleblower Harry Markopolos.

“Citi will vigorously defend against these claims by the trustee, as they are entirely without merit and completely false,” a bank spokeswoman told The Post.

The complaint was filed Dec. 8 in Manhattan bankruptcy court but was made public only yesterday.

Accusations that Citi turned a blind eye to Madoff come on the heels of another Picard suit accusing Madoff’s main lender, JPMorgan Chase, of keeping mum despite its own concerns about how he rang up uncannily robust returns without fail.

The money Picard is seeking from Citi, whose CEO is Vikram Pandit, pales in comparison to his $6.4 billion claim against JPMorgan.