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Victims of Bernard Madoff's Ponzi scheme can expect to soon receive another $568 million to help cover their losses, the U.S. Department of Justice said on Thursday, boosting total recoveries above $18 billion, Reuters reported. Payouts to nearly 31,000 victims will come from the Madoff Victim Fund, a $4.05 billion government fund set up in 2013 and overseen by former U.S. Securities and Exchange Commission Chairman Richard Breeden. Following the latest distribution, its seventh, the fund will have paid out more than $3.7 billion to individuals, schools, charities, pension plans and others. More than 42,000 claimants are eligible for payouts. The latest distribution boosts their recovery from all sources to 81.35% of their losses, the Justice Department said. Another $14.5 billion has been recouped for customers of the former Bernard L. Madoff Investment Securities LLC by the court-appointed trustee liquidating that firm in bankruptcy.

The U.S. Securities and Exchange Commission awarded $110 million to a tipster whose information resulted in enforcement actions, bringing total payments under the agency’s whistle-blower program to more than $1 billion, Bloomberg News reported. The tipster’s award, the second-largest ever, includes $40 million from the SEC and $70 million from a related action brought by another agency, according to a statement Wednesday. Under the SEC’s whistle-blower program, tipsters can be paid for information that prompts sanctions by another agency. “Today’s announcement underscores the important role that whistle-blowers play in helping the SEC detect, investigate and prosecute potential violations of the securities laws,” SEC Chair Gary Gensler said in the statement. “The assistance that whistle-blowers provide is crucial to the SEC’s ability to enforce the rules of the road for our capital markets.” The SEC has made disbursements to 207 tipsters since issuing its first award in 2012. Individuals are eligible for payments ranging from 10% to 30% of the fines collected in enforcement cases where penalties exceed $1 million. Funds used to pay tipsters don’t come out of disgorgement, the portion of a sanction that’s supposed to be returned to harmed investors.

A former Theranos Inc. lab worker testified Wednesday that she raised alarms about the blood-testing startup’s practices with colleagues, managers and even a top executive and a board member but was rebuffed at every turn, the Wall Street Journal reported. The testimony of the former employee, Erika Cheung, bolstered federal prosecutors’ case against Theranos founder Elizabeth Holmes, who is battling accusations that she defrauded patients and investors with promises that her technology could test for a range of health conditions using just a few drops of blood from a finger prick. Over two days of testimony, Cheung testified that Theranos’s highly publicized proprietary technology often didn’t work, and that the company cut corners to give the impression that its product was ready for wide-scale use by patients. She said she tried to tell as many people as she could about problems, including having a discussion with the company’s No. 2 executive, Ramesh “Sunny” Balwani. Rather than being receptive, she said, he questioned why she was qualified to raise concerns and whether she wanted to work at the company. (Subscription required.)

A Los Angeles man has pleaded guilty to fraudulently obtaining $9 million in loans from COVID-relief programs, some of which he transferred to his stock trading accounts and used for gambling trips to Las Vegas, federal prosecutors said, the Associated Press reported. Andrew Marnell pleaded guilty Tuesday to one count of bank fraud and one count of money laundering, the U.S. Attorney’s Office said in a statement. The 41-year-old faces up to 40 years in prison when he’s sentenced in February. Marnell admitted using a series of corporations he controlled to fraudulently obtain loans under the federal Paycheck Protection Program. Prosecutors said his loan applications made numerous false and misleading statements about the companies’ business operations and payroll expenses. Marnell, often using aliases, submitted fake and altered documents, including bogus federal tax filings and employee payroll records, investigators said. As part of a plea agreement, Marnell agreed to forfeit items related to the pilfered loan funds, including $319,298 in cash recovered from his residence, numerous electronic devices, a Rolex Oyster watch, a Range Rover and a Ducati motorcycle.

A New York nanotechnology company will liquidate in bankruptcy after federal authorities charged its former chief executive last year with duping investors out of $12.2 million based on a cancer-detection technology that turned out to be bogus, WSJ Pro Bankruptcy reported. Nanobeak Biotech Inc. filed for chapter 7 protection in New York on Friday, listing as its largest asset a $5.2 million claim against former Chief Executive J. Jeremy Barbera. He faces federal charges that he bilked dozens of investors by telling them the company had developed breathalyzer sensor technology for detecting cancer and narcotics in human breath, based on research licensed from the National Aeronautics and Space Administration. In reality, the technology was “wholly fictitious” and was never developed by the company or by NASA, according to the criminal charges pending against him. Mr. Barbera has pleaded not guilty and is scheduled for trial in January. Nanobeak alleged in court papers Friday that Mr. Barbera misappropriated $5.2 million from the company, echoing allegations in the criminal case. Prosecutors in New York allege he embezzled millions of dollars in investor funds to pay personal expenses, including private school and college tuition for his children, the mortgage on his Central Park West apartment, luxury automobiles and other expenses.

A Cayman Island mutual fund whose manager was charged in a $100 million bait-and-switch scheme filed for chapter 15 bankruptcy protection in the U.S. to protect its assets from lawsuits by disgruntled investors, Bloomberg News reported. Representatives of the so-called Income Collecting 1-3 Months T-Bills Mutual Fund asked a federal bankruptcy judge in New York on Friday to recognize their efforts to liquidate the company, which they said would include an attempt to pay back investors. Recognition of the foreign liquidation would put a hold on any lawsuits against the fund. The fund’s manager, Ofer Abarbanel, was arrested June 24 in Los Angeles and charged with securities and wire fraud. U.S. prosecutors said the California man told an investor group that its money would be primarily placed in short-term U.S. Treasury securities but instead put it in funds he controlled or was closely associated with. Two days before Abarbanel’s arrest, the fund was placed in liquidation in the Cayman Islands on the vote of its sole shareholder, NY Alaska ETF Management LP, according to court records. The fund’s representatives said in court papers that the fund has “a particular need” for recognition of its liquidation efforts, given the Securities and Exchange Commission’s findings of “potential significant fraud against the fund and its creditors.” According to the SEC, the fund “had $106 million in liabilities against possibly only approximately $88 million in assets,” the lawyers said. “Based upon these serious allegations of fraud, it is likely that other parties may assert litigation against the fund. A stay of any pending and potential future proceedings will be important to the (representatives’) investigation and efforts to collect assets and wind down the fund.”

Prosecutors and defense lawyers are scheduled to deliver opening statements Wednesday in the highly anticipated criminal trial of Theranos Inc. founder Elizabeth Holmes, who faces federal charges of defrauding patients and investors with claims of revolutionary blood-testing technology, the Wall Street Journal reported. The opening remarks in court will be the first opportunity for the former chief executive’s lawyers and the prosecutors with the U.S. attorney’s office in the Northern District of California to influence the jury in a trial expected to last more than three months. Ms. Holmes rose to fame as a Stanford University dropout who founded what appeared to be a cutting-edge health company, which was valued at more than $9 billion before imploding over questions about its technology. Prosecutors will lay out their case against Ms. Holmes, whom they have accused of fraudulently touting Theranos’s blood-testing machines as being able to test accurately and reliably for a range of health conditions using a few drops of blood from a finger prick. As reported in 2015, Theranos only used its finger-stick machines to analyze a small percentage of its blood tests and instead routinely used commercial analyzers and blood drawn from an arm vein. To win a conviction, government lawyers must convince the jury that Ms. Holmes intended to commit fraud, not simply that the company ran into problems living up to its promises. Ms. Holmes’s attorneys have said the once-lauded Silicon Valley executive believed in what Theranos set out to accomplish and didn’t defraud anyone. She has pleaded not guilty to 10 counts of wire fraud and two counts of conspiracy to commit wire fraud.

Clinton Portis was among three former National Football League players who have pleaded guilty for their roles in a nationwide scheme to defraud a healthcare program for retired NFL players, the U.S. Justice Department said yesterday, Reuters reported. Portis, a former running back who was drafted by Denver in 2002 and spent the bulk of his career with Washington, D.C., faces a maximum penalty of 10 years in prison. He is scheduled to be sentenced on Jan. 6. The alleged scheme targeted the Gene Upshaw NFL Player Health Reimbursement Account Plan, which was set up in 2006 to help retired players cover medical expenses. According to court documents, Portis caused the submission of false and fraudulent claims to the plan on his behalf over a two-month period, obtaining $99,264 in benefits for medical equipment that was not actually provided. Portis, who earned two Pro Bowl selections during an NFL career that spanned 2002-2010, and former wide receiver Tamarick Vanover pleaded guilty on Friday, two days after their trial resulted in a hung jury. Former NFL linebacker Robert McCune, the third defendant in that trial, pleaded guilty on the second day of the trial. Portis was one of 10 former NFL players charged in December 2019 with allegedly defrauding the a healthcare program of more than $3.4 million by filing false claims for hyperbaric oxygen chambers and other expensive medical equipment.