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Federal prosecutors said that former New York Mets outfielder Lenny Dykstra, who pleaded guilty to bankruptcy fraud in July, should be sentenced to 30 months in prison, Bloomberg News reported yesterday. Dykstra pleaded guilty in July to looting valuables from his $18 million mansion north of Los Angeles and secretly selling them after his bankruptcy filing in 2009. He admitted to one count each of bankruptcy fraud, concealment of bankruptcy property and money laundering. On top of the bankruptcy charges, the former Major League Baseball player was convicted last year for trying to lease cars using phony business cards and credit information and is now serving three years in state prison.

The bankruptcy trustee recovering money for victims of the Ponzi scheme operated by imprisoned Minnesota businessman Tom Petters is suing BMO Harris Bank, accusing it as the owner of M&I Bank of aiding and abetting the fraud, the Associated Press reported yesterday. The lawsuit filed in bankruptcy court in yesterday accuses the formerly Milwaukee-based M&I Bank of turning a blind eye to $35 billion that flowed in and out of the main bank account that Petters Company Inc. used to finance the $3.65 billion Ponzi scheme for more than five years.

U.S. prosecutors told a Houston jury that two former accounting executives at Stanford Financial Group Co. should be convicted of helping Texas financier R. Allen Stanford conceal the theft of billions of dollars from investors at his offshore bank, Bloomberg News reported yesterday. The government asked jurors to reject claims by ex-Chief Accounting Officer Gilbert Lopez and former Global Controller Mark Kuhrt that they were duped by Stanford and his finance chief into creating false financial statements, which investors relied on to buy $7 billion of fraudulent certificates of deposit from Antigua-based Stanford International Bank Ltd. Lopez and Kuhrt, who went on trial on Oct. 17, are the last two Stanford executives to be criminally tried for their roles in a Ponzi scheme built on bogus CDs.

Bank of New York Mellon Corp.'s Ivy Asset Management agreed to a $210 million settlement with the state of New York to resolve allegations it misled clients that invested with Bernard Madoff, Bloomberg News reported yesterday. Ivy, which reached the agreement with New York Attorney General Eric Schneiderman, was sued by the state in 2010, accused of concealing from investors negative information it learned about Madoff in order to keep collecting fees. Ivy was paid more than $40 million between 1998 and 2008 to give advice and conduct due diligence for clients with large Madoff investments, according to the attorney general’s office. Ivy's clients lost more than $236 million after Madoff's Ponzi scheme collapse, the office said.

Money market pioneer Bruce Bent was cleared yesterday of civil fraud charges that he misled investors in the early days of the 2008 financial meltdown, a blow to U.S. regulators in one of the few cases accusing individuals on Wall Street of wrongdoing during the crisis, Reuters reported yesterday. A jury rejected all of the charges against Bent following a month-long trial in U.S. District Court in Manhattan. His son, Bruce Bent II, was also cleared of violating civil securities laws but was found liable on one negligence claim. Two entities tied to the Bents also were found liable on some charges. The U.S. Securities and Exchange Commission accused the Bents of lying to investors and fund trustees in attempts to stop a run on their Reserve Fund in September 2008.

MoneyGram International Inc., a provider of cash transfers worldwide, agreed to forfeit $100 million to resolve U.S. charges that some of its agents defrauded customers, Bloomberg News reported on Friday. The forfeiture is part of a deferred-prosecution agreement between the Dallas-based company and the U.S. Attorney’s Office in Harrisburg, Pa. Prosecutors will withdraw criminal charges if MoneyGram complies with the agreement for five years, according to papers filed in federal court. The settlement stems from an investigation from 2003 to 2009 into transactions involving MoneyGram’s U.S. and Canadian agents, as well as its fraud-complaint data and consumer anti- fraud program.

The whistle-blower helping the U.S. government mount a $1 billion fraud lawsuit against Bank of America Corp. was himself accused of fraud by an investor in a financing company he co-founded, and now works at Fannie Mae, one of two entities he claims the bank defrauded, Bloomberg News reported on Friday. Edward O’Donnell sued Bank of America, the second-biggest U.S. lender by assets, in February under the False Claims Act, saying that the bank's Countrywide Financial unit, where he once worked, issued defective mortgages and sold them to Fannie Mae and Freddie Mac. Last month, the Justice Department joined his suit, making it the first time the U.S. has accused a bank of fraud over loans sold to the two government-sponsored mortgage- finance companies.

Krones AG, a German maker of packaging and bottling machines, will pay $125 million to settle a U.S. criminal probe and related civil litigation over its role in a $685 million fraud at Le-Nature's Inc, a bottled water company that went bankrupt in 2006, Reuters reported yesterday. The U.S. Department of Justice said Krone's U.S. unit, Krones Inc, will pay $15 million and enter a non-prosecution agreement to resolve the criminal probe. The Franklin, Wisconsin-based unit will also pay $110 million to enable fraud victims and Le-Nature's creditors to recover some of their losses.

A lawyer for investment fund pioneer Bruce Bent asked jurors on Wednesday to acquit his client of civil fraud charges, saying that the 2008 financial crisis was hard to predict, Reuters reported yesterday. Bent and his son were acting in good faith when their funds fell victim to an economic maelstrom in September 2008, attorney John Dellaportas told the jury in closing arguments in federal court in Manhattan. Closing arguments in their month-long trial had been scheduled for Oct. 29, but were delayed by Hurricane Sandy when the storm knocked out power to the federal courthouse in lower Manhattan last week. SEC attorney Alexander Janghorbani told the jury the Bents "knew they didn't have the money" to repay their investors. They "told their trustees, they told their investors, what they wanted to hear ... when they knew they couldn't deliver their promise," he said. The U.S. Securities and Exchange Commission sued Bent, his son Bruce Bent II and their family-run Reserve Management firm in 2009, saying that they lied to investors about the safety of their money after Lehman Brothers filed for bankruptcy on Sept. 15, 2008.

Fairfield Greenwich Group, the biggest operator of "feeder funds" that channeled money into Bernard Madoff's Ponzi scheme, agreed to a settlement that may pay defrauded investors as much as $80.3 million, Bloomberg News reported yesterday. The deal, to be funded by Fairfield Greenwich founder Walter Noel and other individuals associated with the firm, resolves claims by a class of investors who lost money to Madoff's fraud, according to court documents filed yesterday. Fairfield Greenwich placed about $7 billion with Madoff’s firm, Bernard L. Madoff Investment Securities LLC. The settlement, which needs a judge’s approval before taking effect, provides $50.3 million to the class, which will get an additional $30 million if that money is not used to resolve other legal claims. A provision in the agreement allows Fairfield Greenwich to cancel the settlement if too many investors opt out of the deal to pursue individual claims.