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A bipartisan group of congressional lawmakers is urging a U.S. regulator to shake up the receivership cleaning up after R. Allen Stanford ’s $7 billion Ponzi scheme, saying the money recovered from the fraud is insufficient, WSJ Pro Bankruptcy reported. The lawmakers asked Securities and Exchange Commission Chairman Jay Clayton in a letter last week to consider intervening in the court-supervised receivership of Stanford International Bank, the defunct institution that carried out the fraud exposed in 2009. Stanford is serving a 110-year prison sentence in Florida after his 2012 conviction on 13 felony counts. He has petitioned several courts to free him and has published a book saying prosecutors made him a scapegoat. Liquidators have spent a decade selling assets, suing alleged beneficiaries of the Ponzi scheme and distributing the proceeds. But the amount of money recovered for victims has been insufficient, said the lawmakers, including Reps. Al Green (D-Texas), Matt Gaetz, (R-Fla.) and Cedric Richmond (D-La.). Only a fraction of the money lost in the fraud has been recovered, according to court records. “We hope you agree that it is completely unacceptable that the Stanford Ponzi scheme victims have recovered pennies on the dollar over the past 11 years,” the lawmakers wrote in the letter to Clayton. “While some of these individuals have become infirm or passed away over this time, thousands of others still await economic justice.” The lawmakers urged Mr. Clayton to shake up the receivership proceeding, including by cracking down on professional fees and possibly petitioning a federal court to replace the receiver. While the receivership had brought in more than $681 million as of April, professional fees totaled $216 million, nearly as much as the $221 million distributed to victims, according to court records.

Cyber-fraud-prevention startup NS8 Inc. filed for bankruptcy protection yesterday after its former chief executive was arrested on fraud charges last month and an investor put up $10 million to finance a litigation campaign over the company’s sudden collapse, WSJ Pro Bankruptcy reported. Las Vegas-based NS8 said that it would use the chapter 11 process to stave off a cash crunch while launching lawsuits against founder and former Chief Executive Adam Rogas and others who collected money from the company before it went under. Investment firm Invictus Global Management LLC has extended a loan to finance the planned litigation, aimed at recovering lost funds for victims of the alleged fraud that brought down NS8.

Goldman Sachs Group Inc. yesterday said that it was clawing back $174 million in executive compensation and had agreed to pay $2.9 billion over its role in Malaysia’s 1MDB corruption scandal, lifting a cloud that has hung over the bank for years, Reuters reported. The settlement with the U.S. Department of Justice and other U.S. and overseas regulators resolves a probe into the role Goldman Sachs bankers played in helping to steal cash, which Goldman helped raise, from the Malaysian state fund. While the scandal has proved a humbling and costly saga for the Wall Street giant, the long-awaited settlement should allow Chief Executive David Solomon to accelerate his plans to turn the bank around after a decade of under-performance, analysts said. Under terms of the deal, Goldman agreed to pay a $2.3 billion fine for breaking anti-bribery laws and to disgorge $600 million of ill-gotten gains as part of a deferred prosecution agreement, which also requires it to improve its compliance controls.

A criminal investigation into an alleged bribe to secure a bailout of troubled nuclear plants in Ohio is looking at the energy company that prosecutors say supplied some of the money and now owns the facilities, WSJ Pro Bankruptcy reported. Federal prosecutors have subpoenaed Energy Harbor Corp., asking executives to turn over documents and communications as part of an investigation into whether anyone associated with the company understood that payments made by it were part of an alleged pay-to-play arrangement, rather than a legal lobbying effort, the people said. Energy Harbor and its former parent company, Ohio utility FirstEnergy Corp., paid millions of dollars to an entity that former Ohio House Speaker Larry Householder allegedly used to fund support for the $1.5 billion bailout, which involves state subsidy payments to aid the nuclear plants, according to an FBI affidavit. FirstEnergy, which previously disclosed it had been subpoenaed, faces similar questions as Energy Harbor on what it knew about the money paid. Householder was charged with racketeering in July. The U.S. Attorney for the Southern District of Ohio accused him and four associates of taking $60 million in bribes between 2017 and 2020. Mr. Householder allegedly used the money to secure the bailout, fund his campaign for Ohio House speaker and quash an effort to repeal the law that included the subsidy, the affidavit said. Householder has pleaded not guilty. The nuclear plants are now owned by Energy Harbor, a former FirstEnergy subsidiary that was spun off and renamed after filing for bankruptcy protection in 2018. The company emerged from bankruptcy earlier this year with its assets partly subsidized by Ohio utility customers, who will annually contribute about $150 million to the company for seven years.

The former musical director of “The Arsenio Hall Show” was sentenced today to 27 months in federal prison for embezzling nearly $1 million from a charity concert intended to raise money for children made homeless by wars, according to a press release from the U.S. Attorney's Office for the Central District of California. Robin DiMaggio was sentenced by U.S. District Judge Dolly M. Gee, who described his actions as “a despicable crime of sheer greed.” Judge Gee also ordered DiMaggio to serve one year of home confinement once he has finished serving his prison sentence. A restitution hearing in this case will be scheduled in the coming months. During the summer of 2016, DiMaggio promised to help the Bulgaria-based nonprofit organization Peace for You Peace for Me Foundation organize a concert in the Bulgarian capital of Sofia. The concert was intended to raise money to help children who lost their homes because of global conflicts. DiMaggio, a professional drummer who also had served as a musical director for the United Nations, offered to get world-famous musicians and celebrities to perform at the concert, and he claimed to need money to book these artists. Relying on these promises, the foundation’s financial sponsor wired nearly $1 million to DiMaggio. Rather than use the money for the charity concert, DiMaggio instead used it to fund his personal lifestyle and pay his debts. Within weeks of the last wire transfer of $750,000, he used $251,370 of the funds to purchase a Calabasas home for his ex-wife. DiMaggio also bought his mother a $35,000 car and bought his son a $24,000 car. He also wired $150,000 of the funds to a bank account in the name of his company, DiMagic Entertainment Inc. None of the transfers was sent to artists or their management in connection with the charity concert in Bulgaria. DiMaggio also forged bank documents and deleted correspondence while this civil litigation was spending, and he ultimately filed for chapter 7 bankruptcy protection. In his September 2017 bankruptcy filing, DiMaggio made false statements that he had not made alimony payments or given any gifts worth more than $600 to any person in the prior two years.

Americans have lost more than $145 million to fraud related to the coronavirus, according to the Federal Trade Commission, which said it had fielded more than 200,000 complaints from consumers, the New York Times reported. Schemes related to the coronavirus peaked in the spring, and they focused on federal stimulus payments and other forms of financial relief, personal protective equipment, and unemployment and other government benefits, the commission reported. The data was compiled by the commission’s Consumer Sentinel Network, which provides law enforcement agencies and the public with information about rampant forms of fraud. The network’s tracker of coronavirus-related cases includes nearly 206,000 reports of coronavirus-related fraud that were submitted to the F.T.C. from Jan. 1 through Sept. 22. The median loss was $300, according to data from the commission. The losses could be higher for older Americans, who are often the target of this kind of fraud, said Lucy Baker, a consumer defense associate at the United States Public Interest Research Group, which shared the data this week. Many of the victims were older, she said. In the months since the pandemic began, government agencies have warned consumers about fraud in which victims are asked for personal data, such as their name, date of birth, Social Security number or Medicare and health insurance information. This information can be used to commit identity theft or medical insurance fraud. The commission accelerated its action against coronavirus fraud in March, when it joined the Food and Drug Administration in issuing warnings related to the virus, telling seven companies to stop selling products that claimed to cure or prevent COVID-19, the disease caused by the virus. Many frauds also sought cash and personal information from consumers. The F.B.I. issued a warning in June when scammers were advertising fraudulent coronavirus antibody tests.