Vienna - Vienna-based Bank Medici AG is set to come under state control, as the bank was exposed to funds of the failed US investor Madoff, Austrian news agency APA reported Friday.

Financial authorities put together an order under which the small bank will be managed by a government commissioner, APA reported.

While the small bank said in December that it was exposed to 2.1 billion dollars through two of Madoff's funds, Austrian newspaper Der Standard reported a sum of at least
3.6 billion dollars.

Bank Medici's balance sheet totals 28.6 million euros (40 million dollars), according to Der Standard.

Bernard L Madoff, 70, a former chairman of the Nasdaq exchange on Wall Street, was arrested last December for running a 50-billion- dollar Ponzi scheme in which money from new investors was used to pay off older investors.

In mid-December, Bank Medici said it was "invested in connection with the Madoff fraud case, but not endangered in any way, owing to its solid equity structure." (dpa)