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The Consumer Financial Protection Bureau (CFPB) and New York Attorney General Letitia James yesterday filed a complaint in federal court to seize a $1.6 million home, the ownership of which the complaint alleges was fraudulently transferred by the operator of a massive and now-defunct debt-collection scheme. Douglas MacKinnon transferred ownership of his home to his wife and daughter for the sum of $1 shortly after learning of a federal and state investigation into his companies Northern Resolution Group LLC and Enhanced Acquisitions LLC. The complaint asks the court to declare the transfer void and order the seizure and sale of the property to partially repay MacKinnon’s outstanding debt to the federal and state governments for his illegal conduct. In 2019, the CFPB and New York Attorney General reached a settlement with Douglas MacKinnon, Northern Resolution Group, LLC, Enhanced Acquisitions, LLC, Delray Capital, LLC, and Mark Gray. The CFPB had sued MacKinnon and Gray and their companies for harassing, threatening, and deceiving millions of consumers across the nation into paying inflated debts or amounts they did not owe. The companies routinely added $200 to each debt they purchased and attempted to collect, used spoofing technology to make it appear as though they were calling from government agencies, and sent threatening messages to consumers to frighten them into paying. MacKinnon and his companies were permanently banned from the debt collection industry and ordered to pay $60 million in consumer redress and penalties. Despite the court’s order, MacKinnon has not made any payments toward satisfying the judgment against him, and neither he nor his family members have cooperated in the Bureau’s and New York’s efforts to obtain relevant financial information.

Nearly four years after an infamous festival that was billed as an ultraluxurious musical getaway in the Bahamas left attendees scrounging for makeshift shelter on a dark beach, a court has decided how much the nightmare was worth: approximately $7,220 apiece, the New York Times reported. The $2 million class-action settlement, reached Tuesday in U.S. Bankruptcy Court in the Southern District of New York between organizers and 277 ticket holders from the 2017 event, is still subject to final approval, and the amount could ultimately be lower depending on the outcome of Fyre’s bankruptcy case with other creditors. But Ben Meiselas, a partner at Geragos & Geragos and the lead lawyer representing the ticket holders, said on Thursday that he was happy a resolution had at last been reached. “Billy went to jail, ticket holders can get some money back, and some very entertaining documentaries were made,” Meiselas said in an email mentioning Billy McFarland, the event’s mastermind. “Now that’s justice.” Lawyers representing the trustee charged with Fyre’s assets did not immediately respond to a request for comment. McFarland and the festival’s co-founder, the rapper Ja Rule, have faced more than a dozen lawsuits against their company, Fyre Media, in the event’s aftermath. The plaintiffs have sought millions and alleged fraud, breach of contract and more. McFarland is serving a six-year prison sentence after pleading guilty to wire fraud charges. In 2018, a court ordered him to pay $5 million to two North Carolina residents who spent about $13,000 apiece on VIP packages for the Fyre Festival.

Bernie Madoff died yesterday in a prison medical center in North Carolina. For many of the victims of Mr. Madoff’s Ponzi scheme and lawyers still pursuing his ill-gotten assets, the fallout continues to affect their lives, WSJ Pro Bankruptcy reported. More than a decade has passed since Mr. Madoff confessed to his crimes and began serving a 150-year sentence. In time, a court-appointed trustee learned the scheme had taken an estimated $17.5 billion of client money, of which more than $14 billion has been recouped and distributed to account holders at Mr. Madoff’s now-defunct investment firm. The trustee is pursuing more banks, offshore funds, family offices and other investors for allegedly taking stolen cash, in litigation expected to wind through courts for years. As those efforts play out, the financial lives of numerous individuals and nonprofit organizations who turned to Mr. Madoff to safeguard their money remain ruined.

Actor Zachary J. Horwitz was arrested yesterday in Los Angeles on a federal charge that he ran a massive Ponzi scheme that defrauded investors out of $227 million by touting fictitious film licensing deals with HBO, Netflix and other platforms, the Los Angeles Times reported. Horwitz, who has appeared in minor films under the stage name Zach Avery, was accused of fabricating emails from HBO and Netflix executives about nonexistent film distribution agreements in an attempt to stave off demands for payment from investors. In a sworn statement filed in Los Angeles federal court, FBI agent John Verrastro laid out a brazen scheme by Horwitz to persuade investors to pour huge sums of money into his film distribution company, 1inMM Capital LLC. Horwitz sent investors bottles of Johnny Walker Blue Label scotch with the company's 2015 annual report that highlighted a "library" of 52 films his company was supposedly distributing in Africa, Australia, New Zealand and South America, according to Verrastro. The roster of films included the 2012 horror movie "The Lords of Salem" and the 1989 action film "Kickboxer" with martial arts action star Jean-Claude Van Damme. Horwitz told investors falsely that he had "strategic partnerships" with HBO, Netflix and other platforms to license the foreign distribution rights. The investors were promised returns as high as 40% within a year.

The Justice Department has charged 474 people over the past year with trying to swipe more than $569 million by using criminal fraud schemes connected to the coronavirus pandemic and seized at least $580 million in civil proceedings, officials announced Friday, demonstrating how taxpayer-funded programs meant to ease the economic burden of the crisis have become susceptible to scammers, the Washington Post reported. The department said that it has seen fraud attempts connected to several government aid programs. The Criminal Division’s Fraud Section, for example, has charged at least 120 people in connection with fraud of the Paycheck Protection Program, a taxpayer-subsidized loan program regulated by the Small Business Administration, which has long been of concern because of how program funds were disbursed with relatively little oversight. The department said that it had also seen immense fraud in connection with the Economic Injury Disaster Loans program, and, along with the Secret Service and U.S. attorney’s office in Colorado, had seized $580 million of possibly stolen money from that program through administrative procedures. That money, authorities said, is separate from the funds explicitly tied to criminal charges.

A U.S. judge said on Friday Deutsche Bank AG may sue two offshore funds for allegedly reneging on an agreement to sell the German bank $1.6 billion of claims in the bankruptcy of swindler Bernard Madoff’s namesake firm, Reuters reported. Deutsche Bank had accused the Kingate Global Fund and Kingate Euro Fund, which funneled client money to Madoff before his Ponzi scheme collapsed in 2008, of having “sellers’ remorse” for agreeing to sell the claims at 66 cents on the dollar in 2011, only to see their value later rise substantially. In refusing to dismiss the lawsuit, U.S. District Judge Edgardo Ramos in Manhattan pointed to language that the agreement was “firm, irrevocable and binding,” though a formal contract was never signed and much time had passed. “Here, two sophisticated parties agreed of their own free will to be bound,” Judge Ramos wrote. He said that Deutsche Bank can also pursue a claim that the Kingate funds acted in bad faith by filing for protection under chapter 15 of the Bankruptcy Code in September 2019 to escape possible litigation by the bank.