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Victims of Bernard Madoff’s $20 billion Ponzi scheme are set to start 2021 with checks totaling more than $190 million, the latest installment in loss-compensation payments from the trustee who’s been liquidating the con man’s business for more than a decade, Bloomberg News reported. The 12th distribution in the long-running case includes more than $74 million in settlements and courtroom recoveries since the last payout in February, trustee Irving Picard said yesterday. The payouts associated with 813 accounts will average $234,631 each and will boost total victim recoveries to 69.6 percent of approved claims, the trustee said. “With our next expected distribution, we will have returned to customers almost 70 percent of the money stolen by Bernard Madoff, much more than anyone ever predicted,” Picard said. Since Madoff’s New York-based firm collapsed in December 2008, the trustee has been reimbursing victims by suing investors who made money off the fraud by withdrawing more cash from their accounts than they put in. After the next payout, the total amount returned to victims will rise to $14.1 billion, he said. A hearing on the plan is set for Jan. 20 in U.S. Bankruptcy Court in Manhattan.

Long before federal regulators would accuse him of fraud for running a Ponzi-like scheme, Victor Farias decided to raise some cash in the municipal bond market. Farias couldn’t tap the market without help. His startup jet-engine-leasing business based in the San Antonio, Texas suburbs wasn’t exactly the kind of venture normally financed in the normally safe world of state and local government debt. But there was an agency that could do it for him: the Public Finance Authority of Madison, Wis. (PFA), Bloomberg News reported. The PFA was set up a decade ago with the sole purpose of renting out its power to issue municipal debt to businesses all over the country — from real-estate developers and colleges to nursing homes. It was June 2015 when Farias’s business moved to borrow through the PFA, submitting a five-page application that mostly provided contact information. The PFA didn’t review Integrity Aviation’s financial statements, revenue projections or demand a feasibility study, according to a bond offering statement. Farias, a former bond salesman, had almost zero experience in the aviation business, bond offering documents would later show. A month later, the PFA approved his proposal, and his business issued about $11 million of taxable debt, broken into $5,000 lots, small enough for mom-and-pop investors to buy them. Today, Integrity Aviation is in shambles. Bondholders have accused Farias of siphoning about $275,000, and a company that leased five of its engines filed for bankruptcy. And the muni bonds are trading for just 10.5 cents on the dollar in secondary markets, a price that indicates traders believe Integrity won’t be able to repay the debt when due next year.

Junior creditors of Senior Care Centers LLC are suing the former controlling shareholder and a major landlord of the skilled nursing facilities operator for more than $100 million, saying that the business fell into bankruptcy after its assets were plundered, WSJ Pro Bankruptcy reported. Alan Halperin, a trustee for unsecured creditors in the chapter 11 case, on Thursday filed a complaint against Granite Investment Group and related affiliates, alleging they extracted tens of millions of dollars at the expense of other creditors. Those “self-dealing transactions,” Halperin said, included charging above-market-rate leases of skilled nursing facilities. Dallas-based Senior Care filed for bankruptcy in December 2018, partly blaming ballooning rents and saying it needed to address “burdensome debt levels and expensive leases” at skilled nursing and assisted- and independent-living facilities. Bankruptcy law gives struggling businesses more power to get out of or renegotiate leases. The company entered bankruptcy with about 110 facilities that served more than 9,000 patients.

Arlington County (Va.) Board member Christian Dorsey, whose ethical and financial difficulties have tangled him in a web of false statements over the past year, fraudulently misrepresented his assets while filing for bankruptcy, a federal court ruled Friday, the Washington Post reported. Dorsey had listed a second mortgage payment as one of his obligations, which would have reduced the amount he had to pay toward his other debts. But a trustee charged with overseeing his case said in court on Thursday that the mortgage debt had been forgiven, and Dorsey had made no payments on it since October 2019, when he filed for bankruptcy. It was “an act of overt misrepresentation,” Thomas P. Gorman told the court at a hearing on Thursday, and “misconduct . . . so over the line” that punishment was warranted. Judge Brian F. Kenney sided with Gorman, calling Dorsey’s filings “a misrepresentation that requires that the case be dismissed with prejudice.” In an order published Thursday, he dismissed the bankruptcy under a code section reserved for cases involving fraud.

Bankruptcy Judge Alan Koshchik is ordering four Ohio lobbyists who work for the top law firm in the FirstEnergy Solutions bankruptcy to answer questions under oath about any possible ties to the Larry Householder bribery case, the Akron (Ohio) Beacon Journal reported. Judge Koshchik issued the order on Tuesday, telling the four lobbyists, known as the "Ohio statehouse team" with law firm Akin Gump, to answer his questions in writing by Jan. 8, with a related court hearing on Jan. 19. The four lobbyists "were the timekeepers involved who interacted with currently-indicted individuals or entities ..." according to the court filing. The judge, who had been withholding millions in dollars in fee requests from Akin Gump over the ongoing investigation, said about $2.8 million being sought by Akin Gump related to state government lobbying, including work tied to the passage of House Bill 6. The bill, now law, is at the center of the $61 million federal bribery investigation. Akin Gump is aware of the court’s order and will readily provide additional information to facilitate approval of the firm’s fees, a spokesman for the international law firm said on Wednesday. The firm has been seeking to be paid nearly $68 million in fees and expenses in the case.

California, New York and other states are revolting against the Justice Department’s proposed settlement with OxyContin maker Purdue Pharma LP, which is accused of helping fuel the opioid crisis, WSJ Pro reported. The proposed pact comes up for approval next week in bankruptcy court, where Purdue sought refuge from litigation. But a growing chorus of critics is warning the proposal would short-circuit broader talks about how to use Purdue’s assets to address the addiction epidemic. Purdue is set to plead guilty to three felony counts including conspiracy to defraud the U.S. and conspiracy to violate federal anti-kickback laws, as part of the settlement. The pact also calls for Purdue to transform itself into a company to be run for the benefit of the public. States said that the settlement, if approved, ties the hands of other creditors that would prefer to sell Purdue. Purdue was hit with an avalanche of lawsuits accusing it of pushing a highly addictive drug into vulnerable and unwary markets. It has denied wrongdoing and filed for chapter 11 last year to get breathing space and open talks about how to address demands for damages. Some Democratic lawmakers have also warned Purdue’s proposed deal with the Justice Department is bad for the public, but this week bankruptcy experts, dozens of states and lawyers for individuals with addiction-related claims against Purdue weighed in against it. Critics are urging delay so the deal doesn’t crowd out other alternatives for state and tribal governments and others that have been contending with the legal, social and medical burden of opioid addiction. The Justice Department negotiated separately from the general bankruptcy talks, critics said.

The federal government is swamped with reports of potential fraud in the Paycheck Protection Program, according to government officials and public data, casting a shadow on one of the federal government’s signature responses to the coronavirus pandemic, the Wall Street Journal reported. Congress and the Trump administration designed the PPP to give small businesses fast and easy access to taxpayer funds, and it worked: About $525 billion in loans were distributed to 5.2 million companies between April 3 and Aug. 8. Many business owners say it was a lifeline in turbulent times. But evidence is growing that many others took advantage of the program’s open-door design. Banks and the government allowed companies to self-certify that they needed the funds, with little vetting. The Small Business Administration’s inspector general, an arm of the agency that administers the PPP, said last month there were “strong indicators of widespread potential abuse and fraud in the PPP.” The watchdog counted tens of thousands of companies that received PPP loans for which they appear to have been ineligible, such as corporations created after the pandemic began, businesses that exceeded workforce size limits (generally 500 employees or fewer) or those listed in a federal “Do Not Pay” database because they already owe money to taxpayers. Tens of thousands of organizations also appear to have received more money than they should have based on their headcounts and compensation rates, it said.