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Joel Sanders, the former chief financial officer at now-defunct Dewey & LeBoeuf, avoided a prison term yesterday when a New York State Supreme Court justice instead ordered him to pay a $1 million fine and perform 750 hours of community service, the New York Law Journal reported yesterday. The Manhattan District Attorney’s Office had urged for the maximum sentence under his May 2017 conviction: One-and-a-third to four years in prison. Sanders was convicted in May of two Class E felonies and one misdemeanor, first-degree scheme to defraud and securities fraud under the Martin Act, as well as fifth-degree conspiracy. The no-prison sentence imposed by Manhattan Supreme Court Justice Robert Stolz is a remarkable outcome for a criminal case that began in 2014, when prosecutors filed more than 100 charges against four former Dewey & LeBoeuf figures, including the firm’s top three executives. Prosecutors alleged the executives hid the firm's precarious finances from investors and lenders before Dewey & LeBoeuf's May 2012 bankruptcy, in what remains the largest law firm failure in U.S. history.

A woman from St. Peters, Mo., has been indicted in federal court here and accused of defrauding people filing for bankruptcy, the St. Louis Post-Dispatch reported today. Prosecutors say that Phebe Ibrahim overcharged clients, created false documents claiming that clients had credit counseling and tried to conceal her role by leaving her name off of documents. Ibrahim, formerly Phebe Khan, was a preparer of bankruptcy petitions for those who wished to file in the Southern District of Illinois, the U.S. Attorney's office said. She was prohibited from charging more than $150, it said. Ibrahim was indicted Tuesday on seven counts each of bankruptcy fraud, causing false statements to be made under penalty of perjury in a bankruptcy case and falsifying records in a bankruptcy case. The indictment accuses her of charging $250 for preparing about 120 petitions from June 2011 through at least August 2, 2016.

Lynn Tilton, whose aggressive management style made her a success on male-dominated Wall Street, won a U.S. Securities and Exchange Commission trial she’d spent months fighting to avoid, Bloomberg News reported yesterday. SEC administrative law judge Carol Fox Foelak ruled in favor of Tilton over allegations that she and her firm, Patriarch Partners LLC, bilked investors out of more than $200 million. “It is concluded that the violations” alleged by the SEC are “unproven,” Foelak wrote in her ruling issued Wednesday. “Thus, the proceeding will be dismissed.” The decision follows a three-week trial that ended last November. Tilton, who repeatedly argued that the SEC’s internal legal process is unfair to defendants, went all the way to the U.S. Supreme Court in her unsuccessful efforts to have the case heard in federal court, rather than before an SEC administrative judge.

The Commodity Futures Trading Commission has accused a New York company of operating a bitcoin-related Ponzi scheme, in the regulator’s first fraud-related action involving the cryptocurrency, the Wall Street Journal reported today. In a civil complaint filed yesterday in U.S. District Court in Manhattan, the CFTC charged Gelfman Blueprint Inc. and its chief executive, Nicholas Gelfman, with fraud, misappropriation, and issuing false account statements in connection with solicited investments in bitcoin. In recent years, central bankers and regulators have increased warnings about bitcoin and other virtual currencies, due to rising prices, increased trading volumes and a larger number of virtual currency-related ventures. Chinese regulators earlier this month ordered digital-currency exchanges to wind down their operations in China, in a bid to reduce risk in a wave of technology-driven finance. Gelfman told investors that Gelfman Blueprint was able to get consistent returns through high-frequency bitcoin trading, the complaint said. In reality, the CFTC claims, the company used money from newer investors to pay back prior investors while also setting up online portals with false performance reports.

The U.S. government expects this year to begin payouts from a $4 billion fund for Bernard Madoff’s victims, ending their nearly nine-year wait to begin recouping losses from his Ponzi scheme, Reuters reported. In a letter made public yesterday, the U.S. Department of Justice said that it “recently notified victims whose petitions have been approved and is poised to issue initial distributions from the Assets Forfeiture Fund by the end of 2017.” The undated letter by Assistant Attorney General Stephen Boyd was addressed to Florida Congressman Vern Buchanan, who had complained to the Justice Department about payout delays. Payouts from the government fund are expected to go to 35,508 Madoff victims whose total losses exceeded $6.5 billion. Nearly all had invested indirectly with Madoff, such as through “feeder funds,” and roughly three-quarters have received nothing since the Ponzi scheme was uncovered in December 2008.

Tracy L. Sunderlage was charged with one count of making false statements in a bankruptcy case and one count of making false statements under oath in a bankruptcy proceeding, according to a press release. As alleged in the indictment, Sunderlage filed a chapter 11 petition on Aug. 12, 2011. According to the indictment, Sunderlage made false statements on his Statement of Financial Affairs, concealing fraudulent transfers of 100,000 shares of Gulf Keystone Petroleum Ltd. and approximately $63,242 and $109,493 to a relative, and concealing his receipt of $241,000 of income from the sale of ownership interest in Gulf Keystone Petroleum, his receipt of $25,000 of income from the sale of ownership interests in other companies, his personal property interests in various financial accounts, and his 2002 Jaguar vehicle.

J. Douglass Jennings, a practicing accountant and disbarred California attorney, pleaded guilty today to one count of Bankruptcy Fraud (Concealment of Assets) and one count of Tax Evasion, according to a Department of Justice Press release yesterday. Jennings, a Certified Public Accountant (CPA) and former attorney, once touted in a commercial that he managed “one of the nation’s leading estate and tax planning law firms.” In his plea agreement, Jennings admitted that, beginning in January 2010, he devised a scheme to defraud his unsecured creditors by concealing numerous assets, and then filed a voluntary bankruptcy petition in the U.S. Bankruptcy Court for the Southern District of California in furtherance of that scheme. Jennings further admitted that, in his bankruptcy filings, he defrauded his unsecured creditors by intentionally concealing the following assets and income valued at nearly $1.5 million.