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More victims of the Bernard Madoff Ponzi scheme could be made whole under a motion filed yesterday in bankruptcy court, CNBC.com reported. Irving Picard, the court-appointed trustee who has been rounding up funds for the victims since shortly after the scam collapsed nearly seven years ago, is asking for permission to return another $1.5 billion to investors, on top of the more than $7.6 billion paid out thus far. If a federal judge approves the payout, victims with losses as high as $1,161,193.87 will have been made whole, at least as far as their principal investment is concerned. Losses higher than that would be repaid at around 57 cents on the dollar. Picard's motion is the result of a Supreme Court decision earlier this month not to hear an appeal by some Madoff investors who wanted Picard to adjust the payments for inflation. The bankruptcy court had required Picard to hold the money in reserve while the case played out.

The attorney representing Joel Sanders, the former chief financial officer of bankrupt law firm Dewey & LeBoeuf, renewed his call for a mistrial yesterday, saying that he was worried the jury was feeling pressure to convict after 20 days of deliberations, Reuters reported yesterday. Judge Robert Stolz, who is presiding over the case in Manhattan criminal court, declined to order a mistrial. Prosecutors and attorneys for the other two defendants, former Dewey Chairman Steven Davis and Executive Director Stephen DiCarmine, did not join in the call for a mistrial. Sanders' lawyer, Andrew Frisch, said he was worried "the jury feels they have to convict someone of something to get out of here."

A bankruptcy judge agreed to undo the sale of a $230 million claim against Bernard Madoff’s liquidating investment firm, offering hopes of a higher recovery to certain Madoff investors, the Wall Street Journal reported today. Bankruptcy Judge Stuart Bernstein this week said that he would break off the sale of the claim, currently held by major Madoff feeder fund Fairfield Sentry Ltd. Fairfield, a British Virgin Islands fund that funneled nearly all of its investors’ cash to Madoff, had sought to undo a pending sale of the claim after a massive settlement with another of Mr. Madoff’s investors dramatically changed the playing field and drove up the price such claims were fetching on the secondary market.

Abby Lee Miller, choreographer and star of Lifetime's "Dance Moms," has been indicted on charges of "bankruptcy fraud, concealment of bankruptcy assets, and false bankruptcy declarations," said U.S. Attorney David J. Hickton of the Western District of Pennsylvania, the Huffington Post reported today. Miller was named as the sole defendant in the 20-count indictment, which was returned on Oct. 13. According to the indictment, Miller filed a petition to reorganize her dance studio in 2010, then concealed income earned from "Dance Moms" and related spin-off shows and from merchandise and apparel sales between 2012 and 2013. The indictment also alleges that Miller put her money in separate bank accounts, which she kept hidden. She also apparently instructed others to hide this information from the bankruptcy court and trustee. The reality TV star is accused of concealing a total of approximately $755,492.85. Miller faces up to five years in prison and/or a fine of $250,000 for each account.

David K. Drumm, the former head of Anglo Irish Bank, yesterday was ordered held at his extradition hearing in U.S. District Court in Boston, pending a bail hearing on Friday, the Boston Herald reported today. Drumm, who was arrested last weekend on a warrant to extradite him to Ireland, is facing 33 charges including seven counts of forgery — each carrying a maximum sentence of 10 years — false accounting, and conspiracy to defraud, which carries “a maximum sentence of an unlimited term of imprisonment,” according to the warrants originally issued in 2013 by a judge of the District Court in the Dublin Metropolitan District. Drumm resigned as chief executive of Anglo Irish Bank in 2009 amid a property loan debacle that resulted in the Irish government nationalizing the bank through a multi-billion-dollar bailout.

A Manhattan jury yesterday acquitted three former executives of bankrupt law firm Dewey & LeBoeuf of several criminal charges but remained deadlocked on most of the charges, including the most serious, grand larceny, Reuters reported yesterday. Former Dewey Chairman Steven Davis and former Executive Director Stephen DiCarmine were each found not guilty of four counts of falsifying business records, while former Chief Financial Officer Joel Sanders was found not guilty on one such charge. All three men were acquitted of numerous other false business records counts last week, when the jury also said that it was deadlocked on most of the counts. But scores of falsified business records remain against the defendants, as do all of the most serious counts. Each defendant faces 15 counts of grand larceny, which carries a maximum sentence of 25 years in prison. In addition, they each face charges of scheming to defraud and violating New York's securities fraud law, the Martin Act.

Vermont Attorney General William Sorrell is warning people who have filed or may soon file for bankruptcy of a scam in which someone claims to be the consumer’s lawyer, the lawyer’s partner or a member of their staff, the Associated Press reported yesterday. The impostors use software to trick the person’s caller ID system so that the call appears to be coming from their bankruptcy lawyer. They then instruct the unwitting consumer to immediately wire money to satisfy a debt. Sorrell says that the calls come late in the evening or during non-business hours so victims can’t call their lawyers to confirm the request. Consumers who get a call should not wire funds and should contact their lawyer as soon as possible. Sorrell also says people should report any scams to the AG’s Consumer Assistance Program.

When the Obama administration agreed this summer to erase the federal loan debt of some former students at Corinthian Colleges, a for-profit school that filed for bankruptcy in the face of charges of widespread fraud, education officials promised to “protect students from abusive colleges and safeguard the interests of taxpayers.” But the Education Department, despite a crackdown against what it calls “bad actors,” continues to hand over tens of millions of dollars every month to other for-profit schools that have been accused of predatory behavior, substandard practices or illegal activity by its own officials or state attorneys general across the country, the New York Times reported today. The career training and for-profit college industry has been accused in recent years of preying on the poor, veterans and minorities by charging exorbitant fees for degrees that mostly fail to deliver promised skills and jobs. Despite stepped-up scrutiny, hundreds of schools that have failed regulatory standards or been accused of violating legal statutes are still hauling in billions of dollars of government funds. They include tiny beauty schools with staggering loan default rates and online law schools with dismal graduation records and no bar association accreditation. Without government funds, which account for the overwhelming bulk of revenue, few of these institutions could attract students or stay in business.

Victims of a convicted Ponzi schemer will benefit from an arbitration award stemming from that criminal’s own poor investments, the Wall Street Journal reported today. A trio of brokers has agreed to pay $2.75 million to settle arbitration claims about their role in various unsuccessful investments purchased by Gregory McKnight, who is currently in jail after having been found guilty of a roughly $72 million Ponzi scheme. That settlement money will go to help compensate victims of McKnight’s fraud, which, according to the Securities and Exchange Commission, involved more than 3,000 investors from across the country, as well as several foreign countries. So far, just $1.5 million has been distributed by the receiver to those investors, according to court documents. Read more. (Subscription required.) 

For further analysis of financial fraud and ponzi schemes, be sure to pick up a copy of ABI’s Fraud and Forensics: Piercing Through the Deception in a Commercial Fraud Case. 

Former Anglo Irish Bank CEO David Drumm, who was seen as a culprit in Ireland's banking crisis, was arrested on Saturday in Massachusetts by U.S. marshals on an extradition warrant, according to the U.S. Attorney's office in the state, Reuters reported on Saturday. Drumm will remain in custody until his hearing in federal court in Boston on Tuesday, said U.S. Attorney's office spokeswoman Christina Sterling. Irish national broadcaster RTE reported in January that Ireland had sent an extradition file to the U.S. government, outlining charges to be prepared against Drumm by the Director of Public Prosecution on up to 30 different offenses. Drumm stepped down from the one-time stock market titan in December 2008, a month before it was nationalized. He filed for bankruptcy in his new home of Boston two years later, owing his former employer more than $11 million from loans he had been given.