Format said a report filed by Austrian police citing evidence from the Federal Bureau of Investigation suggests the money flowed from Bank Medici or its chairwoman, Sonja Kohn, Reuters said.
According to the magazine, investigators also claim that Ms Kohn received $900,000 per quarter from Mr Madoff for "research activities", the news service added.
In a statement, the bank denied the claims, saying it "did not supply any money to Madoff or Madoff companies".
Ms Kohn has previously denied receiving any direct payments from the broker.
Bank Medici claims to be one of the biggest victims of the $65 billion Madoff Ponzi scheme. Funds it acted as investment manager or distributor for lost more than $3 billion.
In related news, Austria's banking watchdog has withdrawn the Medici's banking license.
A spokesman for prosecutors investigating the institution said he was unaware of the FBI findings.