Madoff Trustee Terminates Employee Benefit Plans

The trustee liquidating Bernard Madoff’s defunct money-management firm has won approval to terminate the company’s life-insurance and disability plans.

Benefits-termination notices were sent on May 15 to all of the firm’s employees. Picard didn’t say how many employees are covered by the plans.

Most of the employees left after Madoff’s Dec. 11 arrest. A few were kept on by Picard to assist in the liquidation.

Madoff faces as many as 150 years in prison when he is sentenced next month for running a $65 billion Ponzi scheme.

Compensation Fund for Madoff Victims Growing

More than two hundred victims of Bernard Madoff’s $65 billion Ponzi scheme are one step closer to receiving some of their money back.

As of this week, letters have been sent to commit more than $116 million to satisfy claims made by 237 Madoff victims.

Those investors will receive up to $500,000 from the Securities Investor Protection Corporation, and organization founded by Congress to protect investors.

Madoff trustee Irving Picard has also been filing lawsuits to put together nearly a billion dollars to establish a fund to compensate victims.

Cuomo stops two, puts 20 other debt collectors on notice

New York Attorney General brought an end to the harassing and threatening practices of two debt collectors. He also subpoenaed records from nearly 20 other companies.

Cuomo said, in obtaining a court order to halt the business of Emanee Development Inc. and Dial Tech LLC, that each of the companies threatened consumers with arrest or tried scaring consumers into paying debts they didn’t owe.

The court order mandates the operators of these two firms make restitution to consumers and that they are barred from this business in the future.

Cuomo has accused the debt collection industry with preying on consumers with high credit card bills.

According to a Bloomberg report, Cuomo has previously sued Credit Solutions of America and Nationwide Asset Services for fraud and false advertising.

Mortgage rescue operation targeted Spanish-speaking homeowners, faces FTC fraud charges

The Federal Trade Commission is charging a so-called “mortgage rescue” business with defrauding Spanish-speaking customers, as many of its customers ultimately lost their homes.

In an FTC court filing, the regulators say Dinamica Financiera LLL, Soluciones Dinamicas Inc., and its operators Jose Mario Esquer and Valentin Benitez, never delivered on its promise to help customers avoid home foreclosure. Prosecutors believe the companies collected at least $3.3 million from customers.

The FTC has successfully convinced a judge to freeze the assets of the defendants.

In many cases, customers lost their homes as the defendants could never deliver on the promise that they could obtain mortgage modifications or stop foreclosure proceedings. Customers were eventually evicted from their homes, or worked on their own to save it.

Nadel offers to post $1 million bond

Arthur Nadel says he is willing to post $1 million bond and submit to home confinement as his latest offer to get out of jail.

He currently sits in a New York City cell, where he’s been since late January on $5 million bond. Nadel is the alleged operator of a $330 million Ponzi scheme and federal prosecutors posted such high bail demands because they believe he’s a flight risk.

Nadel has argued that his health is failing but he has run short on actual funds to get out of prison while he awaits trial on federal securities and mail fraud.

Federal prosecutors have not responded to Nadel’s request and a judge said he will decide on the offer June 16.

Nadel’s known assets are mostly under federal receivership while investors into his Ponzi schemes, mostly operated in the Sarasota, Fla., area, seek to recover lost money.

Prosecutors, however, believe Nadel may be hiding millions and would try to access it once he’s out of jail and awaits his federal trial.

Obama signs mortgage fraud law

President Barack Obama recently signed into law the Fraud Enforcement and Recovery Act, new legislation aiming to crack down on the thousands of cases of mortgage fraud across the country.

The laws give prosecutors greater abilities to track predatory lenders and those behind some simple and other rather elaborate mortgage fraud schemes. At a signing ceremony, Obama said regulators have received at least 62,000 reports of mortgage fraud in 2008.

The Justice Department can now reach beyond current bank fraud statutes, according to a Reuters report.

The housing crisis is due largely in part to home prices skyrocketing because more and more Americans were moving into homes they couldn’t afford. They were offered loans they could never afford to pay back, but were lead to believe they could.

This has since been realized and thousands of Americans have been forced from their foreclosed homes.

Beverly Hills Money Manager’s Assets Frozen

Former Beverly Hills money manager Stanley Chais told a bankruptcy judge that the Madoff case trustee has ‘effectively frozen’ his assets.

Chais, 82, also stated that his medical condition, a serious blood disease, may hurt his ability to stand trial.

Madoff trustee Irving Picard says that despite the asset freeze, Chais still has enough money to cover legal expenses.

However, Picard may consider releasing some funds to cover Chais’ living and medical expenses.

Beware of false charities

A national effort has begun to warn consumers looking to donate money to a good cause to be wary of to whom they give.

“Operation False Charity” is being led by the Federal Trade Commission and has identified at least 80 different false funds to which people were duped into believing were real.

The FTC is drawing attention to its efforts now because as the calendar approaches patriotic holidays like Memorial, Flag and Independence days, these false charities rev into full gear, preying on a victim’s potential red, white and blue heart strings.

The FTC considers many of these charities frauds because a majority of the money collected is spent on administration costs rather than supporting the actual cause. This means your dollars are likely paying the Executive Director of a charity, not going where a solicitor may have said it was going.

Earlier this week, the FTC settled such fraud charges with the American Veterans Relief Foundation Inc., Coalition of Police and Sheriffs Inc. and Disabled Firefighters Fund. All three were based at the same California location, and nearly all the money collected was seen as profits to pay salaries.

Cuomo calls “merchants of misery” debt reducers out on fraud charges

New York Attorney General Andrew Cuomo has accused several debt-reduction companies of fraud, saying their offers don’t match results.

Cuomo filed lawsuits in his state earlier this week against Nationwide Asset Services and CSA-Credit Solutions of America.

“They are frauds … scams,” Cuomo told The Buffalo News.

Cuomo says the companies offered debt-settlement plans to thousands of New Yorkers, resulting in millions of profits. He added that the companies’ advertised offers rarely, if ever, matched what consumers received for their money.

CSA, specifically, offered customers a 60 percent reduction in debt to New York residents. More than 18,000 took the offer. More than 2,000 took a slightly less intriguing offer from National Asset Services. Less than one percent of people who signed up saw those savings.

Fairfield Greenwich Sued by Madoff Trustee fo $3.54 Billion

Three Fairfield Greenwich Group hedge funds have been sued by the trustee liquidating Bernard Madoff’s defunct money management firm.

Irving Picard is seeking to recover $3.54 billion from the hedge fund, withdrawn before Madoff’s massive fraud unraveled.

The money will be used to repay victims of Madoff’s $65 billion Ponzi scheme which has left many bankrupt.

At least 8,848 claims for Madoff losses have been filed, tied to 3,565 customer accounts, Picard said.

Madoff faces as much as 150 years in prison for the Ponzi scheme when he is sentenced June 29 in Manhattan federal court.