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Here is what we are reading today:
Playboy Must Pay Millions In Whistleblower Lawsuit (Yahoo) - An historic ruling against the House that Hef Built. A federal jury in Los Angeles says Playboy Enterprises must pay the company's former controller $6 million as part of a wrongful termination lawsuit. The suit, filed in U.S. District Court in California, ruled in favor of Catherine Zulfer – who refused to prepare $1 million in unapproved bonuses for top Playboy executives and who then reported “actual and suspected frauds and improprieties” to company management.
Trial Verdict 'Guilty' In Case That Defrauded Nuns (LA Times) - An Orange County real estate consultant who stole $285,000 from Roman Catholic nuns and used it to buy lingerie and lease a sports car was convicted Tuesday of three counts of wire fraud. After a three-day trial, a federal jury in Santa Ana convicted Linda Rose Gagnon, also known as Linda Gualtieri-Gagnon, 59, of defrauding the U.S. Province of the Religious of Jesus and Mary. Asst. U.S. Atty. Robert Keenan said Gagnon told the nuns in 2008 that she was an expert in handling short-sale and foreclosure transactions and offered to help them buy a small home in San Diego they were renting for retired sisters in the religious order.
Ex-Jeffries Trader Found 'Guilty' Of Fraud (Reuters) - A federal jury on Friday found former Jefferies Group Inc trader Jesse Litvak guilty of defrauding clients on mortgage bond trades made after the financial crisis. Litvak, 39, was convicted on all 15 counts he faced, including 10 of securities fraud. He faced up to 20 years in prison on each securities fraud count. Prosecutors accused Litvak of cheating clients out of more than $2 million between 2009 and 2011 by inflating bond prices, lying about how much Jefferies paid for them and inventing sellers.
SEC Initiates Investigation Of Fraud At High-Frequency Trader Infinium (Chicago Tribune) - The U.S. Securities and Exchange Commission has launched an inquiry into whether high-speed trader Infinium Capital Management violated federal securities laws, according to a SEC letter obtained by Reuters. The SEC has sought documents and recordings related to a lawsuit that former Infinium employees brought against the firm in January, the Feb. 27 letter said.
Whistleblower Gets $63.9 Million In JPMorgan Settlement (DealBook) - A Louisiana man who helped federal prosecutors make their case against JPMorgan Chase’s mortgage lending practices has earned $63.9 million for his efforts. The government will pay the amount to Keith Edwards, the whistle-blower who originally sued the bank last year, according to a filing in a United States District Court in Manhattan on Friday.
Mortgage Fraud Case Ends In 5-Year Prison Term For Bucks County, PA Man (Philly.com) - A Bucks County man at the center of a $14 million mortgage faud that scammed homeowners during the housing bubble last decade finally received his punishment last Friday, sentenced to 5 years in federal prison. Edward G. McCusker of Upper Makefield played a "central role" in the scheme that victimized homeowners and took four years to play out in courrt after the initial indictment was handed down in 2009.
Supreme Court Rules In Favor Of DOJ's Ability To Freeze Assets (Slate) - Justice for Kerri and Brian Kaley, the Supreme Court held Tuesday, is of the Alice in Wonderland variety: First comes the punishment—the seizure of all their assets—then the trial, and the crime last of all.* “But suppose they never committed the crime?” Alice asks. “It doesn’t matter,” comes the court’s answer, “because a grand jury said so.” Writing for a six-justice majority in Kaley v. United States, thus concluded Justice Elena Kagan that a criminal defendant indicted by a grand jury has essentially no right to challenge the forfeiture of her assets, even if the defendant needs those very assets to pay lawyers to defend her at trial. In an odd ideological lineup, the dissenters were Chief Justice John Roberts and the more liberal Justices Stephen Breyer and Sonia Sotomayor.
U.S. Senator Patrick Leahy Says DOJ Spends Too Much On Prison (Main Justice) - Sen. Patrick Leahy (D-Vt.) criticized the growing U.S. prison population this morning, noting that nearly a third of the Justice Department’s $27.4 billion budget request for 2015 would go to prisons instead of funding prosecutors and law enforcement. The requested money, he said – a $97 million increase from current funding – is directed toward the prison system at the expense of important Justice Department programs.
Bernard Kerik Speaks At Conservative Gathering, CPAC (NewsMax) - Former New York City Police Commissioner Bernard Kerik has seen the criminal justice system from both sides. He has helped send people to prison for long stretches, but he also has served three years for tax fraud and making false statements. "I know the system, and I know it's broken," Kerik said Friday in a panel discussion on criminal justice reform at the Conservative Political Action Conference (CPAC).