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A Utah entrepreneur accused of running a Ponzi scheme to expand a U.S. network of luxury event-rental venues was ordered to surrender a chunk of the proceeds from the sale of his $2.4 million home while jilted investors pursue their legal claims against him, Bloomberg News reported. U.S. District Judge Tena Campbell in Salt Lake City issued a so-called writ of attachment to $845,000 from the sale of the property owned by Noah Corp. founder William "Bil" Bowser in the ski-resort town of Park City. Noah and Bowser are among those sued by retirees who invested millions of dollars in one proposed rental facility that was never built. The ruling is the latest in a dispute that pits hundreds of investors against Bowser, his family and Noah, which filed for chapter 11 bankruptcy protection in May. The plaintiffs claim he used money from new investors to pay off earlier ones, while soliciting wealthy retirees keen to avoid taxes and generate income from luxury venues rented out for weddings and corporate events.

A Manhattan federal judge yesterday blocked an attempt by the trustee of the Bernie Madoff fund to claw back, ahead of trial, $86 million in allegedly fraudulent transfers an investor had received as part of Madoff’s Ponzi scheme, the New York Law Journal reported. Bankruptcy Judge Stuart M. Bernstein nixed trustee Irving H. Picard’s motion for summary judgment on his fraudulent transfer claim to recover transfers from Legacy Capital Ltd.’s account with Bernard L. Madoff Investment Securities that were made within two years of its founder being arrested for securities fraud in 2008. In the ruling, Judge Bernstein said that Picard was entitled to go after the funds because the transactions were clearly part of Madoff’s $65 billion Ponzi scheme, considered the largest and longest-running in U.S. history. However, Judge Bernstein said, important questions remained as to Legacy’s defense that it had taken the transfers “for value and good faith.”

U.S. senators from Louisiana urged Toronto-Dominion Bank to compensate victims of R. Allen Stanford’s Ponzi scheme over the bank’s “knowing assistance” in his $5 billion fraud, WSJ Pro Bankruptcy reported. Sens. John Kennedy (R-La.) and Bill Cassidy (R-La.) accused TD Bank in a Friday letter of abandoning small investors who lost their nest eggs when Stanford International Bank Ltd., a TD Bank customer, was exposed as a fraud and collapsed in 2009. Despite being named in long-running lawsuits in the U.S. and Canada, TD Bank and other Stanford financial partners haven’t reached settlements with court-appointed liquidators charged with digging up money for victims. The senators alleged that TD Bank “aided and abetted” Stanford’s banking outside the U.S. and knocked the institution for expanding its U.S. footprint in the years since while holding out on settling litigation and paying restitution. Stanford’s U.S. clients were largely clustered in Texas and Louisiana, though his far-flung financial empire also stretched to Latin America, the Dutch Caribbean and Switzerland. “We demand that TD Bank stop its obstructionist conduct, engage in a meaningful effort to put an end to this decade-long debacle and provide restitution to the Stanford victims without further delay,” the senators said in their letter to TD Bank Chief Executive Greg Braca. “Regulatory intervention should not be necessary for Stanford’s victims to receive the justice they deserve.” Stanford investors since 2009 have gotten back a fraction of what they lost and far less than the recoveries for victims of Bernard Madoff’s Ponzi scheme, which collapsed months before Stanford’s.

A federal appeals court yesterday threw out a settlement requiring insurers to pay $65 million to a court-appointed receiver for companies once run by Allen Stanford, the Texas financier serving a 110-year prison term for running a large Ponzi scheme, Reuters reported. By a 3-0 vote, the 5th U.S. Circuit Court of Appeals said the judge who approved the accord lacked authority to void or release some claims against the insurers, including underwriters at Lloyd’s of London, and bar further legal challenges over their policies and Stanford’s companies. “The district court and receiver lacked authority to dispossess claimants of their legal rights to share in receivership assets for the sake of the greater good,” Circuit Judge Edith Jones wrote for the New Orleans-based appeals court. Ralph Janvey, the receiver, said in a May 22 letter to Sen. John Kennedy (R-La.) that he had recovered $573 million for Stanford’s victims since being appointed in 2009, and been authorized to pay out $232 million. The insurance settlement had drawn objections from former Stanford managers and employees seeking to obtain insurance coverage and press their own claims, and from former Stanford investors who sued brokers covered by the insurance policies. Monday’s decision returned the case to U.S. District Judge David Godbey in Dallas. Read more.

For a further analysis of commercial fraud, make sure to pick up a copy of ABI’s Fraud and Forensics: Piercing Through the Deception in a Commercial Fraud Case. 

Paul Ricky Mata, a former California financial advisor with a lengthy disciplinary history, was arrested yesterday pursuant to a federal grand jury indictment charging him with running a $14.5 million real estate fraud scheme by inducing victims to invest in his businesses and then using their money for personal expenses, according to a DOJ Press release. He is scheduled to be arraigned on the indictment this afternoon in the U.S. District Court in Riverside, Calif. Mata is named in a 17-count indictment that was returned by a federal grand jury on June 5. The indictment charges Mata with mail fraud, wire fraud, and making false statements in a bankruptcy proceeding, among other offenses. If convicted of all 17 counts, he would face a statutory maximum sentence of 295 years in federal prison. Mata also is charged with making false statements on bankruptcy court documents, and of fraudulently concealing from the government and his creditors personal property, including a 2008 Mini Cooper and a 2001 Jeep.

Two former Merrill Lynch financial advisers who alleged the company made misleading statements related to a struggling investment product were the whistleblowers who received a $3 million payout by the Securities and Exchange Commission, the Wall Street Journal reported. The SEC announced the award June 3 but didn’t identify the tipsters or which case the award is connected to, in keeping with its policy. Rebecca Katz, a senior counsel at law firm Motley Rice LLC in New York who represents both whistleblowers, identified the company involved in the case as Merrill Lynch. The Wall Street Journal previously reported that former Merrill Lynch financial advisers Glen Ringwall and Mark Manion were concerned about a lack of adequate disclosure on certain fixed costs related to a structured-note product called Strategic Return Notes, which quickly lost value after being issued in 2010. The financial advisers secretly taped calls with executives at Merrill, during which they were told not to suggest to complaining clients that the product was flawed. Ringwall and Manion left the firm for rival UBS Group AG in 2012, then filed a whistleblower complaint over the notes with the SEC.