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McKinsey & Co. has been a top government consultant since 2016 in Puerto Rico, helping the U.S. territory’s financial overseers manage its spending. In that time, corporate clients of the consulting firm have won tens of billions of dollars of government business, new disclosures show, the Wall Street Journal reported. Since McKinsey began its work for Puerto Rico’s financial-oversight board, the firm has helped the board review and evaluate contracts with companies that are also McKinsey’s consulting clients, according to disclosures it filed in federal court last month and other public documents. McKinsey clients include some of the largest fuel suppliers to Puerto Rico, an infrastructure company with a major role in operating the territory’s electrical grid and contractors that support its public-health system. A McKinsey spokesman said that the firm served these clients on unrelated matters and that its work for them hasn’t conflicted with its work for the oversight board. Hundreds of other companies with financial interests in Puerto Rico also have ongoing ties to McKinsey, according to the firm’s disclosures and other court records and public documents. Most of these client relationships weren’t formally disclosed until last month, when a new federal law required McKinsey and other professional advisers to detail any ties to clients with creditor claims or other interests in Puerto Rico. The disclosures were required under the Puerto Rico Recovery Accuracy in Disclosures Act, a transparency law written in 2018 after some lawmakers raised concerns that the firm had undisclosed conflicts of interest in its work for the oversight board, which McKinsey has denied.

A California man was sentenced 36 months in prison following a jury conviction in March 2022 on one count of mail fraud and one count of making a false representation in a bankruptcy proceeding, according to a DOJ press release. According to court documents, in January 2018, Nana Baidoobonso-Iam, 69, engaged in a scheme in which he mailed an Involuntary Petition in Bankruptcy to the U.S. Bankruptcy Court for the District of Kansas. The defendant signed the Involuntary Petition in Bankruptcy under the penalties of perjury and falsely claimed that an individual owed him $630,000 and owed a second person $1.26 million. The U.S. Postal Service investigated the case.

Hundreds of auditors at accounting giant Ernst & Young cheated on ethics tests they were required to take to get or maintain their professional licenses, and the company withheld evidence of the misconduct from federal authorities investigating the matter, according to the Securities and Exchange Commission, the Washington Post reported. In response, the SEC is imposing a $100 million fine on the company, the largest ever on an audit firm, the agency announced Tuesday. “This action involves breaches of trust by gatekeepers within the gatekeeper entrusted to audit many of our nation’s public companies,” SEC enforcement director Gurbir Grewal said in a statement. “It’s simply outrageous that the very professionals responsible for catching cheating by clients cheated on ethics exams of all things.” In a statement, Ernst & Young admitted to the SEC’s charges and said it is complying with the agency’s penalty. The agency found that beginning in 2017, 49 Ernst & Young professionals shared or received answers to ethics exams they needed to pass to get licensed as certified public accountants. Hundreds more cheated on courses they needed to take to maintain their standing with state oversight boards, while others who didn’t participate themselves helped facilitate the behavior, the SEC said.

Embattled San Antonio attorney Christopher “Chris” Pettit and his law firm, accused of defrauding clients of millions of dollars, have filed for bankruptcy protection, the San Antonio News-Express reported. Pettit listed assets of almost $27.8 million and debts of $115.2 million in his individual chapter 11 petition, making it one of the largest individual bankruptcy cases ever filed in San Antonio. His firm, Chris Pettit & Associates, reported assets valued at no more than $50,000. The filings on Wednesday trumped plans by six Pettit creditors to file involuntary chapter 7 cases against him and his firm today, said Raymond Battaglia, their San Antonio bankruptcy lawyer. The bankruptcy lawyer representing Pettit and his firm has indicated he intends to ask the court to appoint a trustee to oversee the debtors’ estates, Battaglia said. “This case is going to require someone who can trace assets and trace transfers and things that (Pettit’s) done with other people’s monies over the last couple of years,” he added. The bankruptcies come after numerous lawsuits against Pettit and his firm, most alleging they stole millions of dollars from clients. He has given general denials in responses to some of the suits, but he and his firm also reached an agreed judgment with some plaintiffs who were awarded — at least on paper — millions in economic and punitive damages. Others allege that they lost far less, but that the amounts nonetheless represent their life savings. The FBI also is investigating. Pettit specializes in estate-planning and personal-injury law, according to his firm’s website.