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A bankruptcy probe has turned up “substantial evidence” to support suspicions that Nirav Modi’s U.S. jewelry-selling operation was part of an alleged massive bank fraud that has roiled India’s financial sector, according to a new report, the Wall Street Journal reported. Now a fugitive, Modi was at one time the indirect majority owner of U.S. businesses that supplied major retailers including Costco Wholesale Corp., Macy’s Inc. and Zale Corp. Firestar Diamond Inc. and other Modi businesses filed for bankruptcy protection in the U.S. earlier this year, after India’s Punjab National Bank accused him of participating in a $2 billion financing scam. He has denied wrongdoing. Fallout from the alleged fraud, believed to be the largest in India’s history, set off changes in trade finance practices in that country, as well as an international manhunt for Modi.

Five top sellers of Woodbridge Group of Cos. securities were sued by the U.S. Securities and Exchange Commission on Monday, accused of making unlawful profits from an alleged Ponzi scheme, the Wall Street Journal reported. The SEC sued Barry M. Kornfeld, Ferne Kornfeld, Lynette M. Robbins, Andrew G. Costa, Albert D. Klager and their companies in federal court in Florida over their roles as outside salespeople who enlisted investors for Woodbridge. The five defendants were some of the top moneymakers for Woodbridge, the SEC says in its suit. They collected more than $5 million allegedly selling unregistered securities for Woodbridge, which amassed a portfolio of real estate that includes Owlwood, a California estate once owned by Sonny and Cher. According to the SEC, the real estate wasn’t the source of funds to pay off investors. Instead, Woodbridge paid off earlier investors with money from investors who continued to be sold on the idea their money was safe and anchored by valuable properties.

The Securities and Exchange Commission yesterday charged the founder of San Francisco-based venture capital funds and his investment advisory firm with overcharging investors to fund personal projects, including sending millions of dollars to his own virtual reality production company, according to a press release. The SEC’s complaint alleges that Michael B. Rothenberg marketed his advisory firm, Rothenberg Ventures LLC, as uniquely positioned to identify millennial entrepreneurs and invest in “frontier technology” companies. According to SEC filings, Rothenberg’s funds had nearly 200 investors and more than $64 million in assets. The SEC’s complaint alleges that over a three-year period, Rothenberg and his firm misappropriated millions of dollars from the funds, including an estimated $7 million of excess fees, which Rothenberg used to support personal business ventures he claimed were self-funded and to pay for private parties and events at high-end resorts and Bay Area sporting arenas.

The eastern Iowa charity that allegedly received goods purchased with taxpayer dollars through the Iowa Communications Network has filed for bankruptcy, the Des Moines Register reported. Wind and Fire Ministries is a Hiawatha, Iowa-based charity founded by ICN’s former executive director, Ric Lumbard, who died July 25. The organization has filed for bankruptcy, listing $1,462,668 in debt, most of that in the form of loans from individual Iowans. The ministry lists $568,000 in assets, almost all of which is cash maintained in a checking account. The bankruptcy filing indicates that many of the charity’s financial records were seized by the Iowa Division of Criminal Investigation as part of its investigation of ICN. ICN is a state-funded broadband carrier network that provides internet and telecommunications services to schools, health care, government, National Guard armories and libraries. Lumbard was fired earlier this year from his job at ICN amid a state investigation into his use of agency assets. A state audit had questioned the manner in which Lumbard spent almost $380,000 of taxpayers’ money.

In early 2014, hundreds of employees at Maine’s banks and other financial institutions began learning how to recognize unusual account activity that might indicate fraud or financial exploitation, the New York Times reported. The pilot program went so well that one of Maine’s senators, Susan M. Collins (R), introduced legislation to take it national. The result, the Senior Safe Act, which became law in May, gives banks that accept such training more certainty that they would not be punished for disclosing account information to the authorities. Without that protection, banks and their employees run the risk of being sued by clients, or fined or penalized by regulators. "As baby boomers hit their milestones and retire, there’s been a growing focus on what we can report,” said Robert G. Rowe, associate chief counsel for the American Bankers Association. “The law gives us safe harbor to report suspicious activity.”

The U.S. Department of Justice is distributing about $16 million to people who were defrauded by a man convicted of leading a multi-billion dollar Ponzi scheme, the Associated Press reported. Thomas Petters was found guilty in the scheme and sentenced to 50 years in prison in 2010. Investors had thought they were financing the purchase of consumer electronics, but the goods didn’t exist. The money acquired through the scheme supported Petters’ companies and his extravagant lifestyle for more than a decade. The payments are going to about 360 investors worldwide. Bankruptcy trustee Douglas Kelley said that he’s collected money owed to investors by squeezing funds from Petters’ personal holdings and some former companies, as well as others who worked with Petters. He said that he expects “there’s probably another $19 or $20 million that the government will distribute.” Creditors who’ve sought compensation through bankruptcy court are on track to receive about $450 million.

Federal prosecutors in Los Angeles drafted a criminal complaint against a former Goldman Sachs banker early this year for his alleged role in a vast Malaysian fraud, but the charges were never filed because of a Justice Department turf battle, the New York Times reported. Now, the inquiry is solely in the hands of federal prosecutors in Brooklyn, who are investigating a target much bigger than a single Wall Street banker: Goldman Sachs itself. The investigation centers on the disappearance of about $4 billion from a giant Malaysian government investment fund known formally as 1Malaysia Development Berhad, or 1MDB. Prosecutors in the U.S. and elsewhere believe that a group of people with close ties to the former Malaysian prime minister Najib Razak stole from the fund to buy paintings, yachts, real estate and even investment stakes in movies like “The Wolf of Wall Street.” Goldman provided an array of services to the fund, including helping it sell billions of dollars in bonds to investors. The bank earned about $600 million in fees for its work. Authorities are examining whether the firm played a role in the 1MDB fraud or should have done more to uncover the misappropriation of funds, according to allegations.

Samuels Jewelers Inc., a Texas-based chain that was controlled by Mehul Chinubhai Choksi, the uncle of fugitive jewelry designer Nirav Modi, has filed for chapter 11 protection, the Wall Street Journal reported. Choksi and Modi are both wanted by Indian authorities, who are investigating an alleged multibillion-dollar bank fraud. Modi’s U.S. jewelry businesses have been in bankruptcy since February and largely have been sold off. Samuels, which operates more than 120 jewelry stores in the U.S., has called in liquidators to start selling off inventory to pay off debts of more than $100 million, according to papers filed yesterday in the U.S. Bankruptcy Court in Wilmington, Del. Court papers also say that there are plans to close more than 100 stores. Samuels owes $84 million to banks led by Wells Fargo Bank N.A., $10 million to GB Credit Partners LLC, and has debt to suppliers of goods and services of more than $28 million, according to court papers.

Scores of Bernard Madoff’s former customers are pushing for access to a massive database of trading records and other documents seized from the con man’s now-defunct securities firm to advance a fringe theory about the fraud: It wasn’t a Ponzi scheme, Bloomberg News reported. The reasoning behind why they’re advancing the claim: If it wasn’t a Ponzi scheme, they needn’t surrender more than $100 million in what the trustee of Madoff’s firm calls false trading profits. The customers say that they can prove that Madoff used cash from his investment advisory customers to buy billions of dollars in Treasuries and held Fortune 100 stocks that appeared on their statements. That, they argue, would defeat the trustee’s claim that it was all a Ponzi scheme in which no real trading took place — a theory the trustee calls pure fiction. "The standard for a Ponzi scheme is that there is no legitimate business, but Madoff was the single largest market maker in the world," said lawyer Helen Davis Chaitman, who represents about 70 customers. "I believe I can prove that securities were purchased for some of my customers."