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An Evansville, Ind., brother and sister are charged in a bankruptcy fraud scheme, WFIE reported yesterday. Patricia Bippus-Allen and her brother, David Bippus, are accused of falsely filing a joint chapter 13 petition in both Bippus-Allen’s and her husband's name in September 2010. Court records show this was done without her husband's consent. During the scheme, investigators say Bippus-Allen attended a § 341 meeting with creditors — her brother by her side — posing as her husband. Both siblings are facing numerous charges, including wire fraud.

Investors in Lynn Tilton’s funds sued yesterday seeking damages for alleged fraudulent misrepresentation and concealment tied to her multi-billion-dollar debt funds, the Wall Street Journal reported today. Norddeutsche Landesbank Girozentrale and Hannover Funding Co. filed a civil suit in state court in New York, seeking damages from Tilton, her Patriarch Partners LLC and related entities for allegedly misleading them into investing with the financier. The allegations echo those from the Securities and Exchange Commission, which accused Tilton and Patriarch in the spring of fraud and of hiding poor performance of assets in funds they run, called the Zohar funds.

The Supreme Court yesterday rejected an appeal by longtime investors with Bernard Madoff who argued the formula used to return money to clients should have treated them more favorably, Dow Jones Daily Bankruptcy Review reported today. By declining to hear the appeal, the high court's move clears the way for court-appointed trustee Irving Picard to distribute more than $900 million to customers defrauded by Madoff's Ponzi scheme. Those funds had been held in reserve while the investors' appeal worked its way through the courts. The investors, some of whom had invested money with Mr. Madoff for several decades, argued that the amount of their recoveries should be adjusted upward for interest or inflation to reflect the time value of money. Lower courts disagreed, ruling the Securities Investor Protection Act didn't permit such adjustments. Read more. (Subscription required.) 

Take a closer look into unwinding financial fraud with ABI’s Fraud and Forensics: Piercing Through the Deception in a Commercial Fraud Case. 

The trust that manages the $41 billion endowment of the Bill and Melinda Gates Foundation is suing Brazil’s Petróleo Brasileiro SA and its auditor in a New York court, claiming a vast corruption scheme centered on the state-run oil company caused the charitable organization to lose tens of millions of dollars, the Wall Street Journal reported today. The Bill and Melinda Gates Foundation Trust joins a long list of plaintiffs seeking to recoup money they lost as the scandal hammered the value of their investments in Petrobras shares. More than a dozen lawsuits have been filed by U.S. investors who bought American depositary receipts sold by Petrobras in New York, including the attorney general of Ohio, public pension funds in Idaho and Hawaii, and the city of Providence, R.I. Read more. (Subscription required.)

For more on fraud issues surrounding a financially distressed company, be sure to pick up a copy of ABI’s Fraud and Forensics: Piercing Through the Deception in a Commercial Fraud Case.

Jurors deliberating the guilt of three former Dewey & LeBoeuf executives now have hundreds of pages of documents at their disposal, including dozens of emails that were entered into evidence during the course of a nearly four-month-long trial, the American Lawyer reported today. Friday was the second full day of deliberations in the criminal trial of former Dewey & LeBoeuf chair Steven Davis, former executive director Stephen DiCarmine and former chief financial officer Joel Sanders. The three have been accused of orchestrating a scheme to doctor their firm’s records in order to paint a more positive financial picture for lenders and investors. Acting New York Supreme Court Justice Robert Stolz, who is presiding over the case, read off the numbers of each of the exhibits the jurors requested. Assistant District Attorney Peirce Moser handed over the evidence in the form of three black binders, two of which were about five inches thick. The jurors also wanted guidance on how to weigh the charges, which include counts of grand larceny, conspiracy, scheming to defraud, falsifying business records and violating New York's Martin Act.

Japanese prosecutors have filed charges against Mark Karpeles, the former head of defunct bitcoin exchange Mt. Gox, accusing him of stealing $2.7 million of clients' money, Reuters reported. The French-born Karpeles was arrested last month in connection with the disappearance of hundreds of millions of dollars worth of the virtual currency. The charges, which were filed on Friday, said that Karpeles embezzled a total of 321 million yen ($2.66 million) by transferring clients' funds deposited at Mt.Gox's bank account to other accounts. Karpeles was suspected of falsifying data on the outstanding balance of the exchange, at one point the world's largest hub for trading the digital currency, Japanese media reported at the time of his arrest.

Benjamin Wey, who made a career of bringing Chinese companies onto U.S. exchanges, was indicted for fraud in connection with three reverse mergers, Bloomberg News reported yesterday. Wey is accused of using family members to help him secretly amass ownership of large blocks of stock in companies he took public and then manipulate the price of their shares. Prosecutors claim that he was aided in the scheme by a broker in Switzerland, Seref Dogan Erbek, who was also charged yesterday. The founder of New York Global Group was recently found liable in an unrelated lawsuit claiming he sexually harassed a Swedish intern, Hanna Bouveng, and then falsely smeared her as a prostitute and drug addict. A Manhattan jury in June awarded Bouveng $18 million.