%1

Four people claiming that they lost their life savings to Bernard Madoff’s $17 billion Ponzi scheme asked a Delaware court to order the jailed 76-year-old investment manager to submit to formal questioning so his testimony can be preserved before he dies, Bloomberg News reported yesterday. Madoff’s sworn account of the swindle may help them recover proceeds from affiliates of a “primary beneficiary” of the fraud, the late Jeffry Picower, as well as others, Susanne Stone Marshall, Adele Fox, Marsha Peshkin and Russell Oasis said in papers made public today in federal court in Wilmington. Madoff, who was sentenced to 150 years in prison after a guilty plea, will turn 77 in April, has heart and kidney problems, “and has never been questioned under oath about the notorious multibillion Ponzi scheme that he created and ran,” the four investors said. In January 2011, a U.S. bankruptcy judge approved a $7.2 billion settlement between the trustee winding down Madoff’s firm and the estate of Picower. The trustee, Irving Picard, sued Picower in May 2009, claiming he withdrew $7.2 billion more than he invested with the firm and should have known Madoff was running a Ponzi scheme. Picower died in October 2009 at age 67.

Golden First Mortgage Corp. agreed to a $36 million settlement of U.S. claims that the company — which allegedly saw 60 percent of government underwritten loans go into default since 2002 — defrauded a federal mortgage program, Bloomberg News reported on Wednesday. Prosecutors claimed Golden First, which underwrote about $707 million worth of loans beginning that year, falsely certified that it conformed to government lending standards, according to a complaint filed last year in Manhattan federal court. Owner David Movtady agreed to pay $300,000. In the settlement, approved by U.S. District Judge Jesse Furman, Golden First and Movtady said they submitted loans that were ineligible for Federal Housing Administration mortgage insurance, and failed to comply with U.S. regulations, including the requirement of an adequate quality control program.

A federal judge has rejected an attempt by the former head of defunct soft-drink company Le-Nature’s to withdraw his guilty plea in an $875 million accounting fraud for which he’s serving 20 years in prison, the Associated Press reported on Wednesday. Gregory Podlucky had claimed that he was misled by prosecutors and not properly represented by his attorney when he pleaded guilty to the fraud and underlying money laundering counts in October 2011. Podlucky contends the plea agreement has been nullified because the government has so far refused to return $934,000 worth of jewels that were seized from him, which he contends weren’t related to the fraud. Senior U.S. District Judge Alan Bloch, in a ruling issued on Monday, said that Podlucky can still pursue those assets — which were among more than $30 million in valuables seized by the government to repay creditors — but that his appeal is otherwise baseless.

Creditors of jailed real estate mogul Tim Blixseth are asking a federal judge in Washington state to find the one-time billionaire's wife in contempt of court as they try to chase down his far-flung assets, Dow Jones Daily Bankruptcy Review reported today. Bankruptcy trustee Brian Glasser said on Tuesday that Jessica Blixseth unlawfully transferred more than $1 million from the sale of a 156-foot luxury yacht to her mother and other entities. Some of the money was moved after U.S. District Judge Richard Jones imposed a temporary restraining order barring such transfers, Glasser said.

Colorado's Attorney General John Suthers has sued two more law firms in the state for fraud, accusing them of inflating foreclosure costs charged to homeowners, Reuters reported yesterday. As part of an ongoing investigation, Suthers has filed eight civil law enforcement actions against Colorado foreclosure law firms in 2014, five of which resulted in settlements totaling nearly $12 million. The firms targeted earlier this year included the state's two largest, which were accused of defrauding homeowners, investors and taxpayers by grossly hiking costs and padding bills with unauthorized expenses. On Monday, Suthers' office named the latest two firms as Robert J. Hopp & Associates and The Hopp Law Firm, and The Vaden Law Firm, including the firms' principals and their affiliated title companies.

Victims of Bernard Madoff’s $17.5 billion fraud are set to receive a fresh round of payments totaling about $322 million — the latest distribution since the biggest Ponzi scheme in U.S. history fell apart six years ago, Bloomberg News reported yesterday. The proposed payout will boost the sum returned to victims to about $7.2 billion, or almost 49 percent of their lost principal, Irving Picard, the trustee unwinding Madoff’s defunct company, said yesterday. Picard has raised much of the cash with lawsuits against former Madoff customers who profited from the fraud by taking more out from their accounts than they put in. The trustee last month reached $10 billion in recoveries, several billion of which is locked up in drawn-out litigation with investors seeking larger payouts.

Nearly $600 million worth of settlements to benefit victims of Bernard Madoff ’s massive Ponzi scheme on Wednesday won the blessing of a bankruptcy judge, the Wall Street Journal reported yesterday. The settlements, approved by Judge Stuart Bernstein, include a $95 million deal struck with Senator Fund SPC and a $497 million deal to collect money from Herald Fund SPC and Primeo Fund. All of the funds had invested with Madoff, who is currently serving a 150-year prison sentence. Irving Picard, the official tasked with paying back Madoff’s victims, has to date collected or reached deals to collect approximately $10.5 billion of the $17.3 billion in principal that investors lost upon the 2008 collapse of the Ponzi scheme. Of the recovered funds, more than $5 billion has been returned to investors.

Scott Rothstein’s law firm creditors could soon be paid in full, more than five years after the exposure of Rothstein’s $1 billion-plus fraud brought on the firm’s collapse, the Wall Street Journal reported yesterday. A bankruptcy judge has been asked to approve a final distribution to unsecured creditors of Rothstein Rosenfeldt Adler, the now-defunct South Florida law firm that Rothstein used to conduct his massive fraud. Trustee Michael Goldberg, responsible for getting checks out to creditors, on Tuesday filed court papers seeking the court’s permission to send out of millions of dollars to the holders of nearly 80 unsecured claims. Among those slated for final payment are the NBA’s Miami Heat, which would receive nearly $172,000, and the American Heart Association, which would receive more than $26,000.

Four of five former Bernard Madoff workers convicted of aiding his $17.5 billion fraud have escaped with sentences much lighter than prosecutors sought, as a judge placed most of the blame for the scheme on its mastermind, Bloomberg News reported yesterday. The prison terms meted out by U.S. District Judge Laura Taylor Swain at hearings this week moved some defendants and their lawyers to tears. Another attorney thanked her profusely for a sentence far less than even he suggested. Madoff’s former teenage secretary, who went on to run the investment-advisory business at the center of the scam, got six years behind bars, less than half what the U.S. wanted. She was followed by former computer programmers Jerome O’Hara and George Perez, who got 2 1/2-year terms instead of the recommended eight. And Daniel Bonventre, who ran Madoff’s broker-dealer unit for four decades, got 10 years, less than half the time sought by prosecutors, who have spent six years on the case.

Victims of Bernard Madoff's Ponzi scheme may recover less money than they had hoped after a federal appeals court limited the ability of the trustee liquidating the swindler's firm to recoup "fictitious profits" and other payments from customers, Reuters reported yesterday. The U.S. Court of Appeals for the Second Circuit yesterday said that federal bankruptcy law did not let the trustee Irving Picard recoup a variety of payments that Bernard L. Madoff Investment Securities LLC made to some customers more than two years before the firm collapsed on Dec. 11, 2008. Picard has been seeking to recoup money from customers who withdrew more from their accounts than they invested. Circuit Judge Barrington Parker, however, said that allowing the sought-after "clawbacks" risked the kind of "significant market disruption" that Congress intended to avoid by adopting protections for brokerage customers in the Bankruptcy Code.
https://en-maktoob.news.yahoo.com/madoff-trustee-loses-appeal-clawbacks…

In related news, one of Bernard Madoff’s longest-serving employees was sentenced to 10 years behind bars for helping run a $17.5 billion fraud, Bloomberg News reported yesterday. Daniel Bonventre ran Madoff’s broker-dealer unit for almost 40 years after being hired in the 1960s. He’s the first of five former Madoff aides to be sentenced, following their conviction in March. The other four are scheduled to learn their fate in the coming days.