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The bankruptcy trustee for Bernard L. Madoff's investment firm filed an amended lawsuit against Madoff's two sons yesterday, adding detail to claims that the men were aware of the Ponzi scheme and actively worked to conceal it from the Securities and Exchange Commission by deleting, altering or hiding records during an audit, the Wall Street Journal reported today. The new complaint also seeks the return of more than $153 million that it says the brothers, who were executives at Madoff's securities firm, took improperly in the form of inflated bonuses and salaries, sham loans and fabricated trading profits. That is more than $16 million higher than a previous complaint by the trustee, Irving Picard. (Subscription required.)
http://online.wsj.com/articles/madoff-bankruptcy-trustee-files-amended-…

Madoff trustee Irving Picard will be providing a keynote titled “Tales from the Madoff Bankruptcy” at ABI’s 34th Annual Midwest Bankruptcy Institute on Oct. 17. For more information or to register, please click here: http://www.abiworld.org/MW14/

Despite efforts by authorities, particularly after the unmasking of the fraud by Bernard L. Madoff in 2008 in the largest Ponzi scheme in history, fraud still surfaces distressingly often around the country, the New York Times DealBook blog reported yesterday. State and federal financial regulators say that a new Ponzi scheme operator is found nearly every week, and legal actions are brought against about 100 such questionable investment operations every year. “Every other day, you see new schemes uncovered that involve big dollar amounts,” said Jordan D. Maglich, a Tampa, Fla., lawyer who follows Ponzi schemes. He started ponzitracker.com in 2009 after working with his law firm to help recover the $350 million that a Sarasota, Fla., hedge fund manager, Arthur G. Nadel, defrauded from investors, and realized there was no central point of information on such frauds. Over the last five years, Maglich said, he has followed about 500 Ponzi schemes on his site, which includes links to legal documents, including those filed by the Securities and Exchange Commission, which posts some of them on its website; the Commodity Futures Trading Commission; and state financial authorities. In May alone, at least nine newly discovered Ponzi schemes were claimed to involve more than $96 million, said Kathy Bazoian Phelps, a Los Angeles lawyer who keeps a running tally on her blog.

A handful of new lawsuits seek to recover more than $1.5 million for defunct brokerage Peregrine Financial Group Inc.'s creditors from the likes of CNBC, MTV and various charitable organizations, Dow Jones Daily Bankruptcy Review reported today. Ira Bodenstein, the trustee leading Peregrine's bankruptcy liquidation, filed the lawsuits against corporate defendants, a university, several nonprofits and two individuals, court papers show. The lawsuits seek to recover funds the defendants received from Peregrine in the months before the brokerage's July 2012 collapse, which was brought on by the exposure of its founder's fraud.

A federal judge has limited the ability of the trustee seeking money for victims of Bernard Madoff's Ponzi scheme to recoup sums allegedly transferred fraudulently outside the U.S., Reuters reported yesterday. In a decision on Sunday, U.S. District Judge Jed Rakoff in Manhattan said that Irving Picard, the trustee liquidating Bernard L. Madoff Investment Securities LLC, cannot invoke U.S. bankruptcy law to recover transfers abroad between foreign entities, including Madoff "feeder funds" and banks. Judge Rakoff cited a presumption that the law did not apply to conduct outside the country, pointing to a 2010 U.S. Supreme Court decision that limited the reach of domestic laws. According to court records, the decision affects several dozen lawsuits that Picard has pursued, against defendants such as Spain's Banco Bilbao Vizcaya Argentaria SA, Bank Austria AG, Bank of America Corp's Merrill Lynch International unit and Royal Bank of Scotland Group Plc. It came six days after the Supreme Court let stand the dismissal of Picard's claims against banks he accused of enabling Madoff's fraud.

Madoff trustee Irving Picard will be providing a keynote titled “Tales from the Madoff Bankruptcy” at ABI’s 34th Annual Midwest Bankruptcy Institute on Oct. 17. For more information or to register, please click here: http://www.abiworld.org/MW14/

Six insurance companies are suing an asbestos personal injury trust set up by a U.S. unit of Philips that the insurers suspect has been making millions of dollars in fraudulent payments to parties that cannot prove they were harmed by the company's asbestos products, Reuters reported on Thursday. In the lawsuit, the insurers are seeking access to trust records. The insurers said that the asbestos personal injury or PI trust set up during the 2008 bankruptcy of T H Agriculture & Nutrition LLC, a unit of Philips Electronics North America Corp., had been paying substantially more claims than originally forecast. "Plaintiffs have a reasonable suspicion that fraudulent claims have been submitted to and paid by the asbestos PI trust," said the lawsuit, which was filed on Wednesday in Delaware's Court of Chancery.

Lawyers for James Merrill, the president and co-owner of TelexFree who is under house arrest awaiting trial on fraud charges, are requesting the release of more than $4 million from frozen bank accounts to fund his legal defense, Dow Jones Daily Bankruptcy Review reported today. Merrill and his partner, who authorities say fled to Brazil, stand accused of running a massive pyramid scheme and face criminal wire-fraud charges in Massachusetts, where their now-bankrupt company is based. In papers filed Tuesday with the U.S. District Court in Worcester, Mass., defense attorneys said that based on the magnitude of the alleged crime, the release of about $4.2 million held in four bank accounts is essential to Merrill's ability to fully defend himself.

Victims of the Ponzi schemes of Bernard Madoff and Allen Stanford, two of the largest in U.S. history, suffered setbacks yesterday as the U.S. Supreme Court refused to hear appeals in two cases seeking to recoup more money for them, Reuters reported yesterday. In the Madoff case, the court rejected a request by Irving Picard, the trustee liquidating Bernard L. Madoff Investment Securities LLC, to review the dismissal of Picard's claims against banks he accused of enabling Madoff's fraud. Separately, the court rejected a request by Ralph Janvey, a receiver unwinding Stanford's businesses, to review a ruling that blocked him from pursuing claims against Stanford employees on behalf of the receivership's creditors, not the businesses themselves. In both cases, lower courts concluded that Picard and Janvey lacked standing to bring their respective claims. The Supreme Court did not give reasons for its decisions, which leave intact a June 2013 ruling in the Madoff case by the federal appeals court in New York, and an August 2013 ruling in the Stanford case by the federal appeals court in New Orleans.
http://www.reuters.com/article/2014/06/30/usa-court-madoff-stanford-idU…

Madoff Trustee Irving Picard will be providing a keynote titled “Tales from the Madoff Bankruptcy” at ABI’s 34th Annual Midwest Bankruptcy Institute on Oct. 17. For more information or to register, please click here: http://www.abiworld.org/MW14/

A Minnesota liberal arts college that was once a beneficiary of Tom Petters’s largesse will return $600,000 of the $3 million it received, the Wall Street Journal reported today. The College of St. Benedict, of St. Joseph, Minn., in 2003 proudly announced a $3 million gift from Petters, a local businessman, to renovate the school’s 1,078-seat auditorium. The facility was renamed the Petters Auditorium in honor of Petters’s parents. His mother was an alumna of the women’s college, while his father graduated from its brother school, St. John’s University. When Petters was arrested and charged with operating a Ponzi scheme that bilked investors out of several billion dollars. Following his arrest, his business empire — which once encompassed Polaroid and Sun Country Airlines — filed for bankruptcy protection. Officials overseeing the companies’ wind-downs has since sued those to whom Petters made payments of what was ultimately determined to be stolen funds, including charities and other organizations like College of St. Benedict (which ultimately renamed Petters Auditorium). With litigation to recover $2 million of the donated funds reaching as high as a U.S. appeals court, the College of St. Benedict and the bankruptcy trustee demanding the return of the funds participated in mediation in February. The talks yielded a settlement in which the college joined the ranks of other organizations that have agreed to return a portion of their funds.

The U.S. Justice Department fund set up to help victims of Bernard Madoff’s Ponzi scheme received 51,700 claims seeking some of the $4 billion forfeited since the swindle collapsed, Bloomberg News reported yesterday. In total, the claims received by the April 30 filing deadline represent $40 billion lost to the fraud, said Richard Breeden, who was appointed to handle distributions. Many of the claims were filed by banks or fund managers who “are not generally eligible” to share in the forfeited money, Breeden said. He hasn’t yet reviewed the claims to throw out the defective ones, he said.

The trustee liquidating Bernard Madoff's firm yesterday began distributing another $351.6 million to the swindler's former customers, boosting the amount recouped to nearly $6 billion, Reuters reported yesterday. Trustee Irving Picard said that the fourth interim payout will go to victims of the Ponzi scheme who had 1,081 accounts at Bernard L Madoff Investment Securities LLC. Payments range from about $500 to about $77.8 million and average $325,000. Most of the payout comes from a $325 million settlement of Picard's claims against JPMorgan Chase & Co., which had been Madoff's main bank for more than two decades. Claimants will receive 3.18 percent of what they are owed, unless their claims have been fully paid off, Picard said.