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Federal prosecutors charged former executives of Outcome Health with allegedly falsifying data in a nearly $1 billion scheme to defraud the company’s clients and investors, including Goldman Sachs Group Inc., Alphabet Inc. and an investment firm founded by Illinois Gov. J.B. Pritzker (D), the Wall Street Journal reported. The criminal indictments of the startup’s former chief executive, Rishi Shah, as well as ex-president Shradha Agarwal and previous finance chief Brad Purdy, conclude a two-year investigation by the Justice Department. In the indictment unsealed yesterday, the three executives were each charged with multiple counts of mail and wire fraud and two counts of bank fraud. Shah also faces two counts of money laundering and Purdy faces one count of making a false statement to a bank. On the most serious charges, the three each face a maximum prison sentence of 30 years if convicted. The Securities and Exchange Commission yesterday also sued the three former executives, alleging they committed civil securities fraud.

Premium Point Investments co-founder Anilesh “Neil” Ahuja was sentenced to 50 months in prison for conspiring to overvalue the hedge fund’s assets by more than $100 million to attract new investors and prevent withdrawals, in what the U.S. called “one of the largest mismarking schemes ever prosecuted,” Bloomberg News reported Before U.S. District Judge Katherine Polk Failla handed down his sentence yesterday, Ahuja apologized to dozens of friends and family members who had packed the Manhattan courtroom and said that he’d failed as a leader of the firm. Yet in requesting an 18-month term, Ahuja called portfolio manager Amin Majidi, who pleaded guilty and testified for prosecutors, the architect of the plot. The judge rejected that argument, saying that Ahuja drove the conspiracy from the top. Prosecutors have been cracking down on mismarking, the use of questionable methods to make assets appear more valuable than they are. The chief executive officer of Live Well Financial Inc. was charged in August with defrauding lenders by artificially inflating the value of bonds used as loan collateral. He has pleaded not guilty. A former analyst at Visium Asset Management LP got more than 18 months in 2017 for helping inflate the value of bond holdings to hide losses.

Deutsche Bank has sued two offshore funds that funneled money to Bernard Madoff for 14 years, accusing them of reneging on their agreement to sell more than $1.6 billion of claims in the bankruptcy of the swindler’s firm, Reuters reported. In a complaint filed on Thursday night, the bank said Kingate Global Fund and Kingate Euro Fund exhibited “sellers’ remorse” by backing out of their 2011 agreement to sell the claims at 66 cents on the dollar, after the value of the claims had “materially increased.” According to Deutsche Bank, Kingate wrongfully concluded that the sale was no longer “binding” because too much time had passed and a related agreement had not been signed. The German bank is seeking to enforce the sale, or else obtain damages, in its lawsuit filed in Manhattan federal court. Based in the British Virgin Islands, the Kingate funds filed for protection under chapter 15 of the U.S. Bankruptcy Code on Sept. 5, citing the risk of litigation by Deutsche Bank. Robert Loigman, a lawyer for the Kingate funds, in an email called Deutsche Bank’s claims “utterly without basis,” saying the bank was trying to benefit improperly from a “lapsed trade” it refused to complete eight years ago. The Kingate funds were among “feeder funds” that supplied client money to Madoff, which he used to fuel his Ponzi scheme. They agreed in June to return $860 million in a settlement with Irving Picard, the court-appointed trustee liquidating the former Bernard L. Madoff Investment Securities LLC.

A former trader at the defunct hedge fund Premium Point Investments was ordered to spend almost 3 1/2 years in prison for conspiring with the firm’s co-founder to overvalue its assets in order to attract new investors and keep clients from leaving, Bloomberg News reported. A federal judge handed down the 40-month sentence against Jeremy Shor, who was convicted by a jury in July of fraudulently “mismarking” the value of fund holdings. Prosecutors said that Premium Point co-founder Anilesh “Neil” Ahuja, who was also found guilty in July and faces sentencing next week, and portfolio manager Amin Majidi set inflated monthly targets for returns then ordered Shor and other traders to manipulate the valuations accordingly. Prosecutors had asked the judge to sentence Shor to “a substantial period” behind bars, saying he played an “instrumental role” in inflating the fund’s assets. Court probation officials had recommended a term of three years. Addressing U.S. District Judge Katherine Polk Failla before his sentencing in Manhattan federal court yesterday, Shor said that he should have raised questions about the valuations of the firm’s assets.

Kristi Alfaro, left, wife of indicted San Antonio oil and gas businessman Brian Alfaro, center, will pay $370,000 to a court-appointed receiver under a settlement approved yesterday by a bankruptcy judge, the San Antonio Express-News reported. Bankruptcy Judge Craig Gargotta’s ruling also clears the way for receiver J. Scott Rose to begin selling some real estate owned by Kristi and Brian Alfaro, including a Port Aransas lakeside home valued at about $1 million. Rose was appointed a year ago to recover assets on behalf of nine investors who won an $8 million court judgment against Brian Alfaro and his companies after the investors alleged that they had been defrauded in a Ponzi scheme. Alfaro was accused of spending investors’ money on expensive homes and exotic sports cars. Alfaro faces a criminal trial in February on eight counts of mail fraud in connection with his alleged misuse of the investors’ money. He has pleaded not guilty. Rose had accused the Alfaros of resisting his efforts to collect the judgment “by questionable use of their children, newly created entities” and a bankruptcy filing by Kristi Alfaro, according to a court filing. Her lawyer, Morris “Trey” White III, disputed any assertion that Kristi Alfaro was attempting to evade any type of debt.

Celebrity lawyer Michael Avenatti said that a new fraud charge in the extortion case against him should be tossed out because it conflicts with the Supreme Court’s ruling in the prosecution of former Enron Corp. Chief Executive Officer Jeffrey Skilling, Bloomberg News reported. The charge of “honest services” wire fraud should be dismissed because the 2010 Skilling ruling limited such claims to cases involving bribes and kickbacks, “neither of which is present here,” Avenatti said in a filing on Friday in Manhattan federal court. Avenatti is accused of trying to extort $25 million from Nike Inc. while representing an elite-youth basketball coach who claimed to have information about improper payments to athletes by Nike. The new charge suggests Avenatti was depriving his client of his honest services, which the lawyer denies. The U.S. claims Avenatti demanded the payment in exchange for canceling a potentially damaging press conference about the company. The U.S. has dropped conspiracy charges against Avenatti, who gained a national profile after suing President Donald Trump on behalf of adult-film star Stormy Daniels. Skilling was released from prison in February after serving 12 years for the fraud that kicked off what was at the time the biggest corporate bankruptcy in U.S. history.

A judge yesterday sent Washington County, Pa., business owner George Retos Jr. to federal prison for a year and a day for conspiracy to defraud the IRS and filing a false bankruptcy declaration in connection with his companies, the Pittsburgh Post-Gazette reported. U.S. District Judge Arthur Schwab also gave Retos a two-year probationary term when he gets out. Retos, owner of Prime Plastics and Plastic Power in Washington, Pa., had pleaded guilty last year. In addition to the IRS and bankruptcy frauds, he had accepted responsibility for a wire fraud charge in another scheme to fleece Pennsylvania's unemployment compensation system. He did not plead to that charge, but in federal court defendants acknowledge the conduct described in additional counts even if they don't plead, which can then be used at sentencing. Retos and a person identified in court records only as N.R., the nominal president of Plastic Power acting solely at Retos' direction, failed to pay the IRS payroll and employer taxes for the two plastics companies.