A federal grand jury indicted a former high-ranking NASA official Friday for using a government position for his own profit. After playing an important role in George W. Bush’s 2000 campaign, Courtney Stadd served as NASA’s chief of staff and White House liaison until 2003. The indictment charges Stadd, after being named as “special government employee” for NASA in 2005, with diverting $9.6 million earmarked for earth science to one of his clients, Mississippi State University’s GeoResources Institute. If convicted, Stadd could face 15 years in prison. (Washington Post)
Employees of Allen Stanford’s companies won’t avoid the fallout from his $8 billion Ponzi scheme, a court-appointed lawyer confirmed this weekend. The U.S. receiver assigned to oversee Stanford Financial Group announced he would lay off 1,000 employees immediately and without severance packages. Only 15 percent of the firm’s current employees will remain to help draw down operations. A federal judge also froze the assets of 12,000 Stanford investors effective Monday. (Associated Press)
FDA scientists expressed concern this week about the recent approval of Menaflex, a device that treats a variety of knee injuries. The scientists claimed that the FDA approved Menaflex without proper clinical trials under fast-track rules that “apply to products that are similar to already-existing products.” But FDA sources told the Wall Street Journal that Menaflex does not mirror any pre-existing knee treatment available in the United States and should have been considered more carefully. A former head of the FDA said that this is indicative of a fast-track system for the $200 billion per year industry that “has gotten out of control.” (Wall Street Journal)
Two assistants of Bernard Madoff, the man accused of orchestrating a $50 billion Ponzi scheme, told government investigators that their supervisor, Annette Bongiorno, gave instructions to assist in the massive fraud conspiracy. (sub. req.) The assistants said that Bongiorno, a long-time Madoff employee who oversaw the company’s oldest accounts, asked them to research daily share prices for blue-chip stocks and generate “tickets” consistent with Madoff’s expected yearly returns. This information came to light after Madoff indicated last week that he would plead guilty to government prosecutors this Thursday. (Wall Street Journal)
In other Madoff news, the accused fraudster’s lawyer, Ira Sorkin, indicated Sunday that Ruth Madoff would seek separate counsel. In a recent court filing, Mrs. Madoff said that she will fight to keep $70 million in assets she claims are hers alone. Mrs. Madoff’s decision to hire her own lawyer may be yet another sign that Madoff will plead guilty this week. (Newsday)
Call it a serious case of buyer’s remorse. Annette Yeomans, the former chief financial officer for a California-based cabinetry company, surrendered to authorities and reportedly admitted to embezzling nearly $10 million for personal purchases between 2001 and 2007. Meanwhile, the company had to lay off workers and restructure operations due to then-unidentified capital losses. Investigators claim that Yeomans spent nearly $400,000 on 160 purses, more than $240,000 on 400 pairs of shoes, and $300,000 on designer clothing. (Associated Press)
