%1

Principal Financial Group Inc. accused the managers of Liongate Capital Management LLP of hiding investments with Bernie Madoff while negotiating to sell half of their London hedge fund to Principal, Bloomberg News reported today. Founders Randall Dillard and Jeff Holland, and Head of Research Benjamin Funk sold the stake in March 2013 without disclosing secret investments in the largest of several Madoff "feeder funds,” according to legal filings produced by Principal. It may be seeking as much as $66 million in damages in its London lawsuit. Principal said it discovered the investments in late June 2015 after staff opened a locked safe at Liongate’s offices in the Mayfair neighborhood in London, with the help of the safe’s manufacturers. Inside were two files containing purchases spanning almost a decade that included investments in Fairfield Sentry Ltd., a fund linked to Madoff, Principal said. Dillard, Holland and Funk intentionally misled Principal by saying prior to the deal that they had never invested in Madoff funds, the company said in its filings.

Acting United States W. Stephen Muldrow announced that Josiah E. Hutton yesterday pleaded guilty to concealment of assets from a bankruptcy estate, according to a DOJ press release. Hutton faces a maximum penalty of five years in federal prison. Sentencing has been set for June 5, 2017. According to the plea agreement, Hutton was retained to represent a debtor who was planning to file for bankruptcy. In anticipation of filing a bankruptcy petition, Hutton received a settlement check, which was property of the debtor’s bankruptcy estate, and deposited it into his attorney escrow account. Hutton later prepared and certified the debtor’s bankruptcy petition, yet he failed to list the settlement check as an asset, thereby concealing the asset from creditors and the bankruptcy court.

Former Dewey & LeBoeuf finance director Francis Canellas, a key witness in the long-running criminal case over the firm's collapse, told a New York jury yesterday that the now-defunct firm failed to tell lenders about its struggles to pay vendors and partners in the years before its 2012 bankruptcy, the New York Law Journal reported today. On the third day of direct questioning by Manhattan assistant district attorney Peirce Moser, Canellas returned to many of the same themes explored in his earlier testimony in a retrial against former Dewey CFO Joel Sanders and former executive director Stephen DiCarmine. Prosecutors accuse Sanders and DiCarmine of scheming to mislead the firm's lenders and investors about its finances. The retrial, which started in February, comes after the district attorney's initial case against Dewey's former executives ended in a mistrial in 2015. Canellas, a cooperating witness in the government's case, on Monday discussed Dewey's financial woes in 2009 and 2010, and the impact they had on the firm's finance department. He described a firm that had trouble paying its bills on time and was often unable to make payments that had been promised to partners or former partners at the firm. Canellas said that neither he nor anyone else at the firm told Dewey's lenders about those troubles, including during an early 2010 negotiation to refinance the firm's debt.

The finale to Abby Lee Miller's bankruptcy fraud case again has been postponed, the TribLive.com reported today. The star of the reality series “Dance Moms” was scheduled to learn her fate on Friday in U.S. District Court in Pittsburgh. However, Judge Joy Flowers Conti on Wednesday canceled the sentencing hearing at the request of federal prosecutors. A new date has not yet been scheduled. Miller is seeking probation. Federal prosecutors contend Conti should give Miller 24 to 30 months in prison. A Pittsburgh native, Miller, 50, in June pleaded guilty to concealing assets during her 2010 Chapter 11 bankruptcy hearing and failing to report bringing more than $10,000 into the country from Australia in 2014. She remains free on a $10,000 unsecured bond.

Rietta M. Miller of Harrisburg, Ill., pled guilty to a bankruptcy fraud charge pending against her in federal court in Benton, U.S. Attorney Donald S. Boyce for the Southern District of Illinois announced on Friday. Miller was charged with concealing assets in her bankruptcy case. In pleading guilty today, Miller admitted that she concealed from the bankruptcy court a $47,736.12 worker’s compensation settlement she received approximately one month before she filed bankruptcy. Miller acknowledged that she attempted to conceal this money from the Bankruptcy Court by moving the funds in and out of her bank accounts. Miller also admitted that she lied on the bankruptcy petition and schedules she filed with the bankruptcy court, and again when she was asked questions under oath at a Meeting of Creditors held in her bankruptcy case. Miller’s chapter 7 bankruptcy case was filed and litigated in bankruptcy court.