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A Florida man was convicted Friday of running an 18-year, $1.3 billion health-care fraud that prosecutors called the largest such scheme ever charged by the Justice Department, Bloomberg News reported. Philip Esformes, a Miami Beach resident, used a network of nursing homes and assisted-living facilities in South Florida to defraud U.S. government health-care programs while providing inadequate and unnecessary care to patients, prosecutors said. Esformes made off with at least $37 million for himself from 1998 to 2016, according to prosecutors, using the money to finance a lavish lifestyle of fancy cars and a $360,000 watch. Esformes also used some of the proceeds from the fraud to bribe the University of Pennsylvania basketball coach to help get his son into the school, prosecutors said. The coach pleaded guilty to money laundering last year in connection with the case.

One of three defendants in an alleged $360 million Ponzi scheme involving hundreds of investors in Maryland and Virginia pleaded guilty on Tuesday in an agreement with federal prosecutors, the Washington Post reported. In a federal courthouse in Baltimore, Assistant U.S. Attorney Joyce MacDonald described Cameron Jezierski of Texas as an accomplice to two others — Kevin Merrill of Towson, Md., and Jay Ledford of Texas — in promoting “investor confidence that they could entrust their funds to what was really a criminal enterprise.” Jezierski faces a $116,435 fine and a maximum sentence of 20 years in prison, though his term could be much less because of the plea agreement. The prosecutors say the alleged scheme was led by Merrill and Ledford. Both face civil and criminal charges. The three men are accused in court papers of duping more than 400 investors with “an elaborate web of lies” to give the impression that they were running a successful investment operation profiting from student and consumer debt. In reality, prosecutors say, the men were fraudulently diverting investors’ money to maintain a criminal operation in which funds were cycled from one investor to the next. The trio offered investors the chance to profit from consumer debt portfolios — basically car, student loan and credit card debts that people have defaulted on, with assets that could be eligible for seizure. Prosecutors alleged the defendants actually were diverting the payments they received for those investments into their own pockets and to pay off earlier investors. Prosecutors say investors were cheated out of more than $360 million. 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. 

The founder and former chief executive of Jumio Inc. will pay $17.4 million to settle U.S. Securities and Exchange Commission (SEC) charges that he defrauded investors in the mobile payments and identity verification start-up before it went bankrupt, Reuters reported. Daniel Mattes was accused of overstating the Palo Alto, California-based company’s revenue more than tenfold, making $14.6 million by selling his shares from April 2014 to February 2015, hiding the sales from Jumio directors, and falsely telling Jumio lawyers that the directors approved the sales. Mattes also told at least one investor he was not selling his shares because there was “lots of great stuff coming up” at the privately held company and “he’d be stupid to sell at this point,” the SEC said. The SEC said Mattes agreed to disgorge $16.76 million including interest and pay a $640,000 civil penalty. Former Chief Financial Officer Chad Starkey will pay $421,000 to settle SEC charges related to Jumio’s financials and Mattes’ stock sales. Neither Mattes nor Starkey admitted or denied wrongdoing. Jumio filed for chapter 11 protection in March 2016, after restating its financials the prior September, and was bought by the venture capital company Centana Growth Partners. Airbnb, Coinbase and WeWork are among Jumio’s current clients.

General Electric Co. yesterday reached a $49 million settlement to end a long-running lawsuit over its relationship with Thomas Petters, the Minnesota businessman serving a 50-year prison term for running a multibillion-dollar Ponzi scheme, Reuters reported. The settlement between GE and a trustee for two bankrupt Florida investment funds known as Palm Beach Finance, who was seeking $651 million, was filed with the federal bankruptcy court in West Palm Beach, Florida. Court approval is required. GE denied liability in agreeing to settle claims related to its General Electric Capital unit, one of Petters’ lenders. The accord removes a financial overhang for Boston-based GE, which is trying to cut costs while projecting lower 2019 cash flow and profitability from its core industrial operations. Petters was convicted in December 2009 on 20 counts including fraud and money laundering, over what prosecutors called a $3.65 billion fraud.

The former chief of what was once the world’s largest bitcoin exchange was found guilty of producing illegal records on Friday but was cleared on other charges and given a suspended sentence, meaning he probably won’t have to serve prison time, the Wall Street Journal reported. The ruling by the Tokyo District Court came five years after the Mt. Gox exchange run by Mark Karpelès collapsed in February 2014 after losing 850,000 bitcoins then valued at around $470 million. Karpelès wasn’t charged over the loss of the bitcoins. A U.S. indictment unsealed in July 2017 alleged that a Russian citizen named Alexander Vinnik obtained funds from a hack of Mt. Gox and laundered them through online exchanges. Vinnik was arrested in Greece in 2017, and legal disputes continue over whether he should be extradited to the U.S. A lawyer for Vinnik has denied the charges.