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A Chinese man who prosecutors say tried to get $20 million in federal aid for distressed businesses pleaded guilty Tuesday to two criminal charges, the Associated Press reported. Muge Ma entered the plea in Manhattan federal court to bank fraud and aggravated identity theft, admitting the fraud that authorities say he carried out from his luxury Manhattan condominium. Judge Richard M. Berman noted that it was the first hearing conducted in his courtroom since the coronavirus forced a shutdown of most in-court proceedings in March 2020. Ma has remained incarcerated as a flight risk since his May 2020 arrest, when prosecutors said he had applied to at least five banks for over $20 million in government-guaranteed loans from the Paycheck Protection Program and the Economic Injury Disaster Loan program. The programs were intended for businesses harmed by coronavirus shutdowns. Authorities said he falsely claimed to be paying hundreds of employees millions of dollars in wages through two companies he controlled. To support the claims, he submitted fraudulent bank, tax, insurance and payroll records and provided banks with links to websites that described the companies as “global,” prosecutors said.

Toronto-Dominion Bank defeated a lawsuit that sought nearly $4.3 billion in damages over allegations the institution ignored red flags about R. Allen Stanford’s financial empire before it was exposed as one of the largest-ever Ponzi schemes, WSJ Pro Bankruptcy reported. A judge in Ontario on Tuesday dismissed legal claims brought by court-appointed liquidators of Stanford International Bank Ltd., a former TD Bank customer, following a trial that examined an 18-year business relationship that unraveled when U.S. authorities exposed Mr. Stanford’s fraud in 2009. Liquidators appointed in Antigua, where SIB was located, have been pursuing TD and other banks that did business with Mr. Stanford in an attempt to recover money for creditors. Justice Barbara Conway of the Ontario Superior Court of Justice ruled TD Bank employees had no reason to believe at the time that Mr. Stanford was committing fraud or there was anything amiss at SIB. Liquidators argued there were warnings before 2009 that should have tipped off TD Bank, saying it should be liable for between $1.1 billion and $4.28 billion in damages, according to the ruling. But Justice Conway said Mr. Stanford and other SIB directors “went to great lengths to present SIB as a responsible, upstanding bank,” noting it hired experienced bankers and accountants, kept nice offices and presented professional annual reports. The SIB liquidators said they were disappointed with Justice Conway’s ruling, “which leaves many thousands of creditors around the world without justice, more than a dozen years after the collapse of Allen Stanford’s massive Ponzi scheme.” The liquidators are evaluating SIB’s position and considering an appeal, they said.

A ransomware attack on a national hospital chain nearly brought Las Vegas hospitals to their knees. Another attack in Oregon abruptly shut down alerts tied to patient monitors tracking vital signs. In New York, one county’s only trauma center briefly closed to ambulances, with the nearest alternative 90 miles away. Multiple attacks were carried out in recent months against U.S. hospitals, suspending some surgeries, delaying medical care and costing hospitals millions of dollars, the Wall Street Journal reported. The culprit of the attacks is a notorious gang of Eastern European cybercriminals once called the “Business Club,” with ties to Russian government security services, according to threat analysts and former law-enforcement officials who closely follow Eastern European cybercrime operations. Now known by many researchers as Ryuk, after its signature software, it is the most prolific ransomware gang in the world, accounting for one-third of the 203 million U.S. ransomware attacks in 2020, according to cybersecurity firm SonicWall. Ryuk ransomware collected at least $100 million in paid ransom last year, according to the bitcoin analysis firm Chainalysis. The group targets large organizations with deep resources, breaking into their networks and installing malicious software that locks every file on every computer with an encryption key, essentially an uncrackable password. Ryuk routinely extracts six- and seven-figure payments from victims in exchange for revealing the encryption key, according to security companies tracking the group. The Ryuk gang has hit at least 235 general hospitals and inpatient psychiatric facilities, plus dozens of other healthcare facilities in the U.S. since 2018, when security researchers first spotted them, according to a Journal review of the attacks through interviews with hospital officials and security analysts, public statements and court documents. “They do not care. Patient care, people dying, whatever. It doesn’t matter,” said Bill Siegel, CEO of the ransomware recovery firm Coveware. “Other groups you can at least have a conversation. You can tell them, ‘We’re a hospital, someone’s going to die.’ Ryuk won’t even reply to that email.” (Subscription required.)

Scams are running rampant in the cryptocurrency markets as a huge rally in bitcoin, a lack of regulation and the anonymity of digital money have created a ripe environment for fraudsters, the Wall Street Journal reported. Consumers reported losing nearly $82 million to crypto scams during the fourth quarter of 2020 and first quarter of 2021, more than 10 times the amount from the same six-month period a year earlier, according to the Federal Trade Commission. From October to March, the price of bitcoin jumped 450% to nearly $59,000, while rival coins such as ether and dogecoin also surged. Bitcoin has since retreated to around $36,000, still substantially higher than where it traded for all of last year. Scammers have targeted everyone from small investors scouring social media for investing tips to the Wall Street veterans who backed an Australian crypto-fund manager recently charged with running a $90 million fraud.

A Monmouth County, N.J., man made his initial court appearance yesterday for allegedly filing a fraudulent bankruptcy petition claiming he had limited assets and hundreds of millions of dollars in liabilities, when, in fact, he had $2.9 million in a hidden bank account, Acting U.S. Attorney Rachael Honig announced in a press release. Elia Zois is charged by complaint with one count of concealment in bankruptcy. He is scheduled to appear this afternoon by videoconference before U.S. Magistrate Judge Leda Dunn Wettre. According to the complaint, Zois was one of five partners in “Business-2,” a New Jersey-based health care organization that maintained approximately 50 senior living facilities throughout New Jersey, Michigan, and Wisconsin. On Feb. 6, 2019, he and his spouse filed for chapter 7 bankruptcy protection, alleging that between 2014 and 2018 he had only $9,000 in assets and $201 million in liabilities, based upon his partnership in Business-2. A forensic accounting report concluded that during that period Zois received $2.9 million in deposits into the bank account of “Business-1” — of which Zois was the sole owner — including approximately $200,000 in undeclared income after he filed for bankruptcy. The hidden account was intended to conceal a portion of his income to circumvent existing IRS liens on his known assets. The count of concealment in a bankruptcy carries a maximum penalty of five years in prison and a $250,000 fine.

A Manhattan real-estate lawyer under criminal investigation by New York City and federal authorities allegedly can’t account for $17 million in client funds, according to liquidators called in to sift through his failed law firm, WSJ Pro Bankruptcy reported. The collapse of real estate firm Kossoff PLLC has destroyed livelihoods, tarnished reputations and left a trail of unpaid creditors behind, said liquidation attorney Neil Berger during a court hearing yesterday. Lawyers are only beginning to sort through the trove of documents associated with the defunct firm, which was pushed into liquidation last month after a wave of civil allegations that its namesake lawyer had absconded with client money. Berger said in a virtual hearing in the U.S. Bankruptcy Court in New York that liquidators are focused on collecting books and records for their investigation of the allegations and the firm’s collapse. The whereabouts of the firm’s top lawyer, Mitchell Kossoff, have been unknown since last month, according to the liquidators, who sought a court order yesterday forbidding anyone from taking or destroying documents from the firm’s offices at 217 Broadway or anywhere else. The Manhattan district attorney’s office and the U.S. attorney’s office in Brooklyn also are investigating Mr. Kossoff, whose lawyer said in the hearing that many of the documents at issue had been seized by prosecutors. Before the firm’s bankruptcy, Mr. Kossoff was accused in lawsuits of disappearing with client funds that were supposed to be sitting in escrow for real estate deals. He hasn’t been charged with a crime. 

Malaysia today said the U.S. Department of Justice has returned 1.9 billion ringgit ($460.22 million) of funds recovered from assets related to sovereign fund 1Malaysia Development Berhad (1MDB), Reuters reported. Malaysian and U.S. investigators say that at least $4.5 billion was stolen from 1MDB between 2009 and 2014, in a wide-ranging scandal that has implicated high-level officials, banks and financial institutions around the world. The United States has been returning funds it has recovered from seized assets that were allegedly bought with stolen 1MDB money. Malaysia has so far received 16.05 billion ringgit ($3.89 billion) of seized and repatriated 1MDB funds, the finance ministry said in a statement. It plans to use the recovered funds to repay liabilities of 1MDB and its former unit SRC. 1MDB has 39.8 billion ringgit in outstanding debt, while the unit SRC has 2.57 billion ringgit of remaining debt, the ministry said.

A Southern California man was arrested on federal charges on Friday after federal authorities say he fraudulently obtained millions of dollars through coronavirus relief funds to buy luxurious cars, take lavish vacations and cover personal expenses, USA Today reported. Mustafa Qadiri, a 38-year-old resident of Irvine, Calif., located nearly 40 miles southeast of Los Angeles, obtained approximately $5 million in Payment Protection Program funds after claiming to own four businesses in nearby Newport Beach, none of which are currently in business, according to a federal indictment. Qadiri submitted claims for All American Lending, Inc., All American Capital Holdings, Inc., RadMediaLab, Inc., and Ad Blot, Inc. in May and June 2020 with altered bank accounts, fake federal tax return forms and someone else's identity, according to the U.S. Attorney's Office of California. He then, the indictment adds, used the money he received to spend on vacations, personal expenses, and Ferrari, Bentley and Lamborghini sports cars. All cars and $2 million from Qadiri's bank account were seized by federal agents when he surrendered himself to authorities on Friday morning. He is charged with six counts of money laundering, four counts of bank fraud and wire fraud and one count of aggravated identity theft.

A man who was charged in federal court last month after allegedly lying to obtain a $60,000 Paycheck Protection Program loan is preparing to open a taco restaurant in Maine, the Bangor Daily News reported. Nathan Reardon registered the Taco Shack LLC name with the Maine secretary of state’s office on March 3, about five weeks before he was charged in U.S. District Court in Bangor with bank fraud and attempted wire fraud in a national emergency on April 8. A week later, on April 15, Reardon filed for chapter 13 bankruptcy in U.S. District Court in Maine, listing more than $280,000 in claims from more than 100 creditors. Many of them are owed wages from Reardon’s business ventures, but they also include the federal government and the states of Maine and Florida, which are owed more than $36,000 in taxes, according to Reardon’s 129-page bankruptcy filing. Reardon, who owns multiple businesses in both Maine and Florida, allegedly lied about his business’ payroll to get a $60,000 loan from the Paycheck Protection Program, and attempted to obtain additional federal funds fraudulently, in April and May of 2020. Reardon allegedly used the PPP money to pay his lawyer and a local veterinarian, make donations to a Florida church and shop online. His purchases included a men’s 14-carat yellow gold wedding band, clothing, shaving products, toys, an LED barber pole light and a pair of caiman skin cowboy boots, a federal agent’s court affidavit said. Reardon also allegedly withdrew more than $10,000 of the loan in cash. In addition, he tried to get an Economic Injury Disaster Loan from the Small Business Administration using the same false information about his business expenses, according to the affidavit filed in federal court in April.

Heather Lynn Pratt, of Fort Myers, Florida, has admitted to bankruptcy fraud, as announced by Acting U.S. Attorney Randolph J. Bernard, WDTV.com reported. Pratt pleaded guilty to one count of “Fraudulent Concealment of Bankruptcy Assets.” At the time of her offense, Pratt was employed by Emerald Grande, LLC. Per her position, she was able access to the finances of the Florida-based company. Emerald Grande operated two La Quinta Inn & Suites in West Virginia, one in Elkview and the other in Summersville, as well as a commercial property in Charleston known as the Kanawha Landing Property. Emerald Grande was a debtor in a bankruptcy case filed and pending in Clarksburg United States Bankruptcy Court. Pratt has admitted to concealing more than $145,000. This money was embezzled from the operating account of the LaQuinta Inn & Suites in Summersville from the bankruptcy trustee. This money actually belonged to the debtor, Emerald Grande, LLC. As a part of the plea agreement, Pratt will be required to pay restitution in the amount of $145,386.93 to the U.S. Bankruptcy Trustee.