Attorney General Jerry Brown filed suit Tuesday against investment adviser Stanley Chais, who is accused of directing hundreds of millions of dollars of client investments to Bernard Madoff.

This suit seeks at least $25 million in civil penalties, restitution for victims, disgorgement of profits and compensation, and an injunction prohibiting future violations of California law.

“For decades, Stanley Chais posed as an investment wizard, but in truth, he was nothing more than a Madoff middleman, channeling hundreds of millions of dollars in investor funds to his friend’s Ponzi scheme,” said Brown in a statement.

From the early 1970s until December 2008, Chais, based in Beverly Hills and New York, directed money to Madoff through three funds the Brighton, Lambeth and Popham companies collectively known as the Chais Funds with Chais collecting nearly $270 million in fees, the lawsuit alleges.

Chais attracted hundreds of investors to these funds by producing annual returns of 20 to 25 percent. Madoff is believed to have relied on such feeder funds and middlemen to attract the cash flow needed to prop up his scheme. In March, Madoff pleaded guilty to 11 felony counts and admitted to defrauding thousands of investors of billions of dollars. He has been sentenced to 150 years in prison.

The SEC in June filed a complaint against Chais in U.S. District Court in New York alleging that he committed fraud by misrepresenting his role in managing the funds’ assets and for distributing account statements that he should have known were false.

Chais’ attorney, Eugene Licker of Loeb & Loeb LLP, said his client has not yet been served with the complaint, but the allegations appear to be a “regurgitation” of claims made in the existing civil suits.

“Neither General Brown nor any of his assistants sought to talk to Mr. Chais or consider his side of the story,” Licker said in a statement. “Mr. Chais and his family were major victims of the Madoff fraud. The notion that he was complicit in it is outrageous.”

Prior to a midday press conference in downtown Los Angeles, Brown telegraphed his intentions in an article posted early this morning on the Huffington Post Web site, describing his office’s work on the case.

“Washington must put in place real oversight of the financial industry,” wrote Brown, calling for an end to Washington’s preemption of state regulatory authority so that attorneys general would have more power to pursue such cases.

Brown is considered a likely candidate for the 2010 gubernatorial election.