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For five years, employees at Cash America, one of the country’s largest payday lenders, were told to stamp a lawyer’s signature on court documents used to sue customers for past-due debts, the Washington Post reported today. This “robo-signing” helped the company improperly squeeze money out of at least 14,397 Americans, who are entitled to millions of dollars in restitution, the Consumer Financial Protection Bureau said yesterday. The government watchdog said it had reached a $19 million settlement with Cash America for those and other abusive practices — its first with a short-term, small-dollar lender. The bureau also discovered instances of Cash America charging active-duty service members and their families more than 36 percent interest on payday loans in violation of the Military Lending Act, according to the enforcement order.

U.S. Attorney Preet Bharara said yesterday that thousands of victims of Bernard Madoff's fraud, including many who have so far recovered nothing, may start pursuing an additional $2.35 billion to cover some of their losses, Reuters reported yesterday. The sum represents money obtained by federal prosecutors through criminal and civil forfeiture actions since Madoff's massive Ponzi scheme was uncovered in December 2008. It is being held in a Madoff Victim Fund and overseen by special master Richard Breeden, a former U.S. Securities and Exchange Commission chairman. Breeden's fund is separate from money recovered by Irving Picard, the court-appointed trustee who is liquidating the bankrupt Bernard L. Madoff Investment Securities LLC. Picard has said that he has distributed more than $5.4 billion of the $9.5 billion he has recovered so far. Breeden's fund is different because, under criteria approved by the U.S. Department of Justice, people who lost money by investing indirectly in Madoff through "feeder funds," investment groups and other pooled vehicles will for the first time be eligible to recover, Bharara said.

A former JPMorgan Chase & Co. banker who managed Bernard Madoff’s account said that the con man was on track to receive a $200 million loan less than a month before his arrest if the request hadn’t been dropped, Bloomberg News reported today. Daniel Bonventre, one of five ex-Madoff employees on trial for allegedly aiding the fraud, asked JPMorgan in November 2008 to borrow twice Madoff’s credit limit of $100 million, with U.S. Treasuries as collateral, Mark Doctoroff, who left the bank last year, testified yesterday in federal court in Manhattan. The five former employees are accused of helping Madoff hide his fraud from customers, banks and regulators for years, and getting rich in the process.

Prosecutors say that two computer programmers accused of aiding Bernard Madoff’s $17 billion Ponzi scheme, and extorting the con man in the process, were seen by his secretary looking “smug” as they left a closed-door meeting with Madoff two years before his 2008 arrest, Bloomberg News reported today. Eleanor Squillari, a receptionist and personal secretary for Madoff from 1984 until his investment firm closed, found the meeting with George Perez and Jerome O’Hara noteworthy because Madoff “had a very low level of technical sophistication” and almost always left his door open during meetings, the U.S. said in a Nov. 1 filing in federal court in Manhattan. Perez and O’Hara are on trial in New York, charged with aiding Madoff’s swindle. The U.S. alleges that O’Hara and Perez in 2006 realized their programming codes — which allowed the firm’s computers to “spit out fake paperwork” — were essential to keeping the fraud going and demanded more money from Madoff to keep quiet. He gave the men $100,000 each and let them name their own annual bonuses and salary increases, prosecutors say.

A former trader at Bernard Madoff’s firm told a jury that, as a bonus, the con man let him ascribe backdated trades to his personal investment account, as long as they didn’t look “ridiculous,” Bloomberg News reported yesterday. David Kugel testified yesterday in Manhattan federal court at the trial of five former Madoff employees that he also provided fake trading data for customer accounts to defendants Annette Bongiorno and Joann Crupi, who ran the investment business at the center of Madoff’s $17 billion Ponzi scheme. Kugel, who pleaded guilty to fraud in November 2011, was hired out of Pace University by Madoff in 1970. On trial alongside Bongiorno and Crupi are Daniel Bonventre — who oversaw the broker-dealer and proprietary trading operations where Kugel worked — and computer programmers George Perez and Jerome O’Hara, who allegedly automated the creation of millions of fake documents. All five have pleaded not guilty to charges of conspiring to trick customers and regulators for years.

Bernard Madoff’s broker-dealer and proprietary trading units were backed by “hundreds of millions of dollars” in stolen money from his fraudulent investment advisory business, a jury was told in the trial of five former employees accused of aiding the $17 billion Ponzi scheme, Bloomberg News reported yesterday. Madoff funneled money intended for customer investments through his London-based operation and through external U.S. brokerage accounts so it could be used for rent, payroll and credit card payments at his businesses where real trading took place, Bruce Dubinsky, a government witness who analyzed the fraud in 2011, testified today in federal court in Manhattan. One of the defendants, Daniel Bonventre, who oversaw the broker-dealer and proprietary trading operations, argues that he wasn’t aware of the fraud because Madoff lied to him, and because he didn’t work in the investment advisory unit. The U.S. alleges Bonventre knew his business benefited from fraud.

Bernard Madoff’s account statements were full of discrepancies that could be found by comparing the purported trades to published data, a forensic accountant told jurors in the trial of five of the con man’s former employees, Bloomberg News reported yesterday. The majority of securities trades on the customer statements exceeded actual market volume for the indicated day or had prices outside the reported range of highs and lows, Bruce Dubinsky, a government witness who analyzed the fraud in 2011, testified today in federal court in Manhattan. In other cases, trades would “magically” move from original statements to other versions of the same document, Dubinsky said. “Things would appear and disappear — it was smoke and mirrors with account statements.” Dubinsky’s commissioned report on the fraud is being used in civil lawsuits by Irving Picard, the trustee liquidating the defunct company to help repay victims. The report will help the 12-member jury understand exactly how Madoff’s company operated the “world’s biggest Ponzi scheme,” Dubinsky said.

JPMorgan Chase & Co., under siege on multiple fronts by state and federal prosecutors investigating alleged wrongdoing at the largest U.S. bank, is in talks with federal prosecutors in New York to resolve allegations it helped facilitate Bernard Madoff’s crimes, Bloomberg News reported yesterday. The probe by Manhattan U.S. Attorney Preet Bharara is tied to how the bank handled the funds of the convicted money manager and whether it turned a blind eye to his multibillion-dollar fraud, the biggest Ponzi scheme in U.S. history. The case may end in a deferred prosecution agreement. JPMorgan is in the midst of negotiating the terms of a tentative $13 billion accord with the Justice Department to resolve state and federal civil investigations tied to residential mortgage-backed securities and the collapse of the housing market that led to the 2008 financial crisis. “The firm is responding to various governmental investigations relating to Madoff, including by the Department of Justice and other regulators,” the bank said in a securities filing in August. JPMorgan was the primary banker for Madoff’s Bernard L. Madoff Investment Securities LLC, or BLMIS, for more than 20 years. JPMorgan benefited from Madoff accounts while it “helped perpetuate Madoff’s fraud by ignoring the red flags, and continuing to structure products and collect fees for their own enrichment,” according to a lawsuit filed by Trustee Irving Picard. The bankruptcy trustee’s case is Picard v. JPMorgan Chase & Co., 11-cv-913, U.S. District Court, Southern District of New York (Manhattan).

While all eyes are on the criminal trial of the former employees of the biggest Ponzi-scheme operator of all time, Bernard Madoff, the operator of another fraud is quietly — and tearfully — fighting to avoid dying in prison, the Wall Street Journal reported yesterday. Tom Petters maintained his innocence following his 2009 conviction for running Minnesota’s biggest Ponzi scheme, even trying to take his battle to the Supreme Court. But in court Wednesday to seek a shorter prison sentence, he has finally conceded his guilt. “This is my only chance to clear my conscience and soul,” Petters said. “I made a horrible mess of things.” News reports say Petters cried as he apologized to U.S. District Judge Richard Kyle for lying in his courtroom when he denied his guilt for his role in the Ponzi scheme. Petters, who was convicted more than three years ago and sentenced to 50 years in prison, says he was never told that he could have cut a plea deal with prosecutors that would have put him behind bars for 30 years. Prosecutors deny this and accuse Petters of lying to win the shorter sentence. Petters was a well-known Minnesota businessman whose empire once encompassed Polaroid and Sun Country Airlines. He was arrested in 2008 and later found guilty of running a multibillion-dollar Ponzi scheme. His businesses have since gone into bankruptcy liquidation.

A former employee of Bernard Madoff on trial for allegedly aiding the con man’s $17 billion fraud said he wrote corporate checks to himself for tens of thousands of dollars as a secret “bonus” from his boss, Bloomberg News reported yesterday. Daniel Bonventre, who oversaw Madoff’s broker-dealer and proprietary trading units, told investigators after Madoff’s arrest on Dec. 11, 2008, that Madoff permitted him to write such “vendor” checks to himself to hide his total annual compensation from other employees, Meaghan Schmidt, a consultant who helped unravel the fraud after its discovery, told jurors yesterday in Manhattan federal court. Starting in 1998, Bonventre signed similar checks to himself about once a year, ranging from about $45,000 to $60,000, said Schmidt, a director at the consulting firm AlixPartners LLP, whose employees took over Madoff’s offices in Midtown Manhattan to secure documents and ascertain where the business stood. One of the last such payments was a $50,000 check written the previous month, Schmidt said.