Financial Fraud Cases — Recent Frauds & Examples from History » Sonn Law Group (2022)

In this frequently-updated post, we maintain a running list of recent and notable financial fraudcases.

Financial Fraud Cases — Recent Frauds & Examples from History » Sonn Law Group (1)

History is full of financial scams and financial frauds that have taken hard-earned money out of the pockets of innocent investors.

In this frequently-updated post, we maintain a running list of recent and notable financial fraud cases. We’ve also recapped several of history’s most infamous financial fraud cases below.

MOST NOTABLE FINANCIAL FRAUD CASES IN2018

THE FYRE FESTIVAL FRAUD: 100 INVESTORS WERE BILKED OUT OF $27 MILLION

The failed 2017 Fyre Festival — a luxury musical festival that was supposed to take place in the Bahamas — received a brand new wave of attention after documentaries were released by Hulu and Netflix. Notably, beyond making false promises to attendees, the festival’s lead organizer Billy McFarland actively defrauded dozen of investors out of millions of dollars.

In July of 2018, federal regulators settled claims against Mr. McFarland, determining that he bilked more than 100 investors out of a total of $27.4 million. According to the SEC, Mr. McFarland made material misrepresentations to investors.

Among other things, he inflated financial metrics, lied about his own personal business success, and used doctored brokerage account statements to show fraudulent personal income. While he told investors that he had more than $2.5 million in personal stock holding, he actually has less than $2,000. Investor money was used to fund his lavish lifestyle.

In October of 2018, Billy McFarland pleaded guilty to financial fraud charges and was sentenced to six years in federal prison. As of early 2019, civil lawsuits are still pending against a number of vendors and marketing companies that promoted the event.

EXECUTIVE COMPENSATION PLANNERS INC. (ECP): A FATHER/DAUGHTER PONZISCHEME

In December of 2018, Hector May and Vania Bell, a father/daughter team, were charged with operating a Ponzi scheme. In a complaint filed in the United States District Court for the Southern District of New York, the SEC outlined allegations that Hector May, a New York-based investment advisor, induced investors to put money into bond offerings through his company Executive Compensation Planners.

While investors were promised safe and reliable returns, much of their money was never invested at all. Investigators believe that ECP was little more than a $7.9 million Ponzi scheme. The SEC alleges that it was largely used to fund the lavish lifestyle of Mr. May and Ms. Bell.

SEC: THREE HOUSTON, TX DEVELOPERS DEFRAUDED AT LEAST 90 IMMIGRANT INVESTORS

The Securities and Exchange Commission (SEC) announced that three Houston-based real estate development companies — America Modern Green Senior LLC, America Modern Green Community LLC, and America Modern Green Residential LLC — agreed to settle investment fraud charges and repay $49.5 million to immigrant investors.

The SEC filed the company after it discovered that the company improperly raised money through the EB-5 immigrant investor program, materially misrepresenting how investor funds were actually being used. The agency noted that all of the affected investors were able to recover complete financial restitution.

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$102 MILLION PONZI SCHEME (FIRST NATIONLE SOLUTION, LLC, PERCIPIENCE GLOBAL CORPORATION, AND UNITED RL CAPITAL SERVICES)

In June, the Securities and Exchange Commision (SEC) announced that it had busted a $102 million Ponzi scheme. Using three fraudulent companies (First Nationale Solution, LLC, Percipience Global Corporation, and United RL Capital Services), five men defrauded more than 600 different investors throughout the United States. These men were mostly former FINRA brokers who had previously been barred from the industry for past financial misconduct.

Investors were lured into the scheme with promises of above market returns. However, the SEC believes that none of the three companies had any legitimate business operations. Instead, they were simply used to shuffle money around to pay off the original investors. The SEC alleges that more than $20 million was siphoned off by the fraudsters.

MADISON TIMBER PROPERTIES LLC PONZISCHEME

In May, the SEC announced the shutdown of a Ponzi scheme that affected more than 150 investors across the southeastern United States. According to the enforcement agency, Arthur Lamar Adams bilked investors out of more than $85 million in a complex Ponzi scheme.

Using a company called Madison Timber Properties, LLC, Mr. Adams told investors that he was purchasing lumber rights to properties in Florida, Alabama, and Mississippi. By then flipping these harvesting rights, Mr. Adams promised investors annual returns of 12 percent to 15 percent.

For years, investors received account statements indicating that Mr. Adams was good to his word. They were making positive returns. However, the reality was far different. These investors had returns that existed only on paper. Indeed, Madison Timber Properties, LLC owned almost no timber rights to any lands.

Instead, Mr. Adams had forged deeds and carefully put together false cutting agreements with lumber companies. The SEC contends that he was merely shuffling around investor money to keep the Ponzi scheme afloat.

LONGFIN CRYPTOCURRENCY STOCKFRAUD

Over the past several years, cryptocurrency has been one of the most popular alternative investments. Cryptocurrency and related companies are lightly regulated, making this a highly speculative and extremely risky investment option. Unfortunately, this sector has seen more than its fair share of investment fraud schemes.

In April, the SEC unsealed a fraud complaint in Manhattan, announcing that more than $27 million in assets were frozen in relation to the unlawful sale of the cryptocurrency stock LongFin. According to federal regulators, insiders at Longfin committed serious stock fraud when they sold more than $27 million in unregistered securities in their company.

THERANOS STOCK FRAUD (ELIZABETH HOLMES)

Profiled in a famous New Yorker column, Elizabeth Holmes was once the talk of Silicon Valley. The first female founder of a billion dollar startup, Ms. Holmes promised to revolutionize medical testing. Her company ‘Theranos” made headlines all over the world with its innovative upcoming products.

Sadly, the promises that Theranos made to investors and the public were illegitimate. In March, the SEC brought the company down. Theranos, Ms. Holmes, and the company’s president Ramesh “Sunny” Balwani were all implicated in a massive stock fraud scandal.

The SEC alleges that the company raised more than $700 million from investors on false grounds. The company’s promising technology was largely a fraud. Material misrepresentation and outright false statement were made to investors and the media to pump up the company.

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NOTABLE FINANCIAL FRAUD CASES FROM2017

A $250 MILLION OFFSHORE PUMP-AND-DUMP PENNY STOCKSCHEME

On February 6th, 2017, the United States Department of Justice (DOJ) announced that two men, Robert Bandfield and Gregg R. Mulholland, were being sentenced to prison for their role in at least 40 different ‘pump and dump’ schemes. Both men are U.S. citizens, though they executed the fraud while offshore. Through a complex scheme of money laundering and shell companies, the men engaged in a conspiracy to:

  • Actively promote thinly traded securities (penny stocks) to American investors;
  • Disguise their ownership interests in these companies; and
  • Fraudulently manipulate trading volume and price movements of these securities.

In other words, the men worked to temporarily inflate the price of certain penny stocks that they owned through misleading statements and gross exaggerations. Then, they immediately sold their shares when the price increased. As an example, one company that they controlled, Cynk Technology Corp, had no revenue or assets, yet they managed to pump up the total valuation to more than $4 billion through false statements and aggressive marketing. Soon after, the men cashed out and the stock crashed.

DESARROLLADORA HOMEX FINANCIAL FRAUD

On May 3rd, 2017, the Securities and Exchange Commission announced major fraud charges against Desarrolladora Homex, a Mexico-based homebuilder. SEC investigators alleged that Desarrolladora Homex was engaged in a serious accounting scandal. According to the agency, the company overstated its revenue by more than $3.3 billion. Regulators believe that the company faked more than 100,000 total home sales over a three-year period.

In an unusual move, SEC officials presented satellite imagery showing that the company had not even ‘broken ground’ on properties where home sales were recorded on their books, and revenue was reported. While the company did not admit to any wrongdoing, it consented to an entry of judgment in a United States District Court. Among other things, this judgment prohibits this company from offering securities within the United States for at least five years.

JAY PEAK INVESTMENT FRAUD

On April 14th, 2017, Florida brokerage firm Raymond James Financial reached a $150 million settlement in connection to claims related to the Jay Peak redevelopment project.

Jay Peak is a ski resort in Northern Vermont that has been at the center of a major financial fraud case. According to charges from the Securities and Exchange Commission, Miami-based businessman Ariel Quiros fraudulently raised more than $350 million for the Jay Peak redevelopment project.

Representations were made to investors indicating that these funds were going directly to construction costs. Yet, the SEC believes that much of the money was siphoned off. Investigators believe that Raymond James Financial played a key role in facilitating the fraud scheme.

Though, the brokerage firm settled the claim without admitting fault. Beyond the Raymond James $150 million settlement, the SEC also recently announced an $81 million settlement with Mr. Quiros.

ATLANTA-AREA BROKERS DEFRAUD FEDERAL EMPLOYEES

In July, the SEC uncovered a serious fraud scheme targeted at federal employees who were at or nearing retirement. According to the agency, four Atlanta-area ex-brokers used a company called

Federal Employee Benefits Counselors to offer misleading financial products to older federal workers. All four former securities brokers were previously associated with LPL Financial. The legal complaint from the SEC alleges that these four individuals made material misrepresentations to investors.

More specifically, investors were promised guaranteed returns on variable annuity products. Yet, the associated fees were severely understated. In addition, investors were given the misleading impression that these products were offered, vetted, and approved by the federal government.

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In reality, the variable annuities were unvetted and were wholly private investments. In all, the SEC believes that the brokers sold more than $40 million worth of variable annuities to federal workers. This allowed them to collect nearly $1.8 million in illegitimate commissions and fees.

MICHAEL SCRONIC’S PONZISCHEME

In October, the SEC charged Michael Scronic with investment fraud. According to the complaint filed in the U.S. District Court for the Southern District of New York, Mr. Scronic operated a Ponzi-like scheme and made material misrepresentations to his investors.

Mr. Scronic took in more than $20 million in investor money, informing his clients that his so-called ‘hedge fund’ was profitable. In reality, he lost more than 88 percent of investor deposits and siphoned off nearly $3 million for his own personal use.

As his investors’ reported gains were fraudulent, his scheme relied on attracting new clients and the shifting of money around to pay off the previous investors. By July of 2017, the Ponzi scheme crashed, and Mr. Scronic was unable to pay back $200,000 to a client who was seeking redemption. At this time, the SEC believes that Mr. Scronic had only $27,500 in his account, despite owing investors nearly $20.8 million.

WOODBRIDGE WEALTH PONZISCHEME

Earlier this year our founding attorney Jeffrey R. Sonn correctly predicted that Woodbridge was a Ponzi scheme. By later December of 2017, it became clear that federal officials agreed with that assessment. On December 21st, the SEC announced charges against the operators of Woodbridge Wealth.

According to the SEC, Woodbridge amounted to nothing more than a $1.2 billion Ponzi scheme, targeted directly at ordinary investors. The complaint contends that the Woodbridge business model is an outright sham. Instead of making successful high interest rate loans, as the company claimed to be doing, the SEC believes that Woodbridge was simply shuffling around investor money through a complex web of shell companies.

FOUR INFAMOUS FINANCIAL FRAUD CASES FROMHISTORY

THE ZZZZ BEST PYRAMIDSCHEME

Financial Fraud Cases — Recent Frauds & Examples from History » Sonn Law Group (2)

In the early 1980s, a high school student named Barry Minkow founded a carpet cleaning and insurance restoration company called ZZZZ Best. While the carpeting cleaning side of the business was real, the insurance restoration side of the business existed only on paper.

Nonetheless, Minkow was still able to take the company public and eventually get it listed on the NASDAQ exchange. Indeed, Minkow became the youngest person in history to lead an initial public offering (IPO), and managed to raise more than $15 million from investors.

Getting his company listed required faking thousands of disclosure documents and financial records. It also required Minkow to create a fake office to give investigators a tour of his company. Within a year of being listed on the NASDAQ, his firm was worth in excess of $280 million and it had more than 1,000 employees. Of course, because its insurance restoration business was entirely fraudulent, the firm quickly ran into severe cash flow problems.

To try to raise money quickly, Minkow attempted to merge within a competitor through a deal financed with junk bonds. However, allegations of the massive fraud soon went public and the deal, along with the entire scheme, came crashing down. Barry Minkow and nearly a dozen other corporate insiders were indicted on charges that included racketeering, securities fraud and embezzlement.

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THE ENRON BANKRUPTCY SCANDAL

Financial Fraud Cases — Recent Frauds & Examples from History » Sonn Law Group (3)

In 1999, Enron was poised to grow into one of the largest companies on the planet. Directors projected their revenue was to exceed $200 billion and their stock reach more than $90 per share. By November of 2001, the company’s stock had fallen to less than $1 per share and the company was entering the largest bankruptcy in history. What prompted such a precipitous fall?

Extensive and complex fraud.

As it turns out, Enron’s impressive revenue largely existed only on paper. The company used extraordinarily advanced and deceptive accounting practices that had the net effect of dramatically misrepresenting the company’s value to current and prospective investors.

Shareholders filed a $40 billion lawsuit against the company and the SEC brought criminal charges against many of the firm’s top executives.

BERNIE MADOFF’S PONZISCHEME

Over a period of several decades, financial advisor Bernard Madoff conned thousands of innocent investors out of their hard earned life savings. A representative from the Securities Investor Protection Corporation (SIPC) estimated that investors lost out on more than $18 billion in the scheme.

Shockingly, that figure doesn’t even include an additional $40 billion in losses in the form of on-paper investor gains that turned out to be fabricated by Madoff and his co-conspirators. Madoff was able to keep the Ponzi scheme going for many years because of his ability to recruit new investors.

However, as with all Ponzi scheme, eventually Madoff ran out of new investors’ money to transfer around and the scheme fell apart.

MF GLOBAL’SCOLLAPSE

Financial Fraud Cases — Recent Frauds & Examples from History » Sonn Law Group (4)

MF Global was a large derivatives and commodities fund that went bankrupt in 2011. Beyond managing customer accounts, MF Global was also making their own ‘bets’ on world markets. Many of these bets were made in relation to European sovereign debt and related markets.

During the rocky financial times of 2011, investigators discovered that the financial brokerage firm had been unlawfully transferring money from client accounts to its own corporate accounts to hide trading losses and make the company appear to be solvent. In fact, the New York Times reported that MF Global dipped into customer accounts many different times to cover up for its own cash flow problems.

(Video) Enron - The Biggest Fraud in History

In the end, the company paid customers $1.2 billion in restitution as well as $100 million in fines.

WERE YOU A VICTIM OF FINANCIAL FRAUD?

We can help. At the Sonn Law Group, our experienced financial fraud lawyers are committed to advocating for the rights of investors nationwide. If you believe that you were a victim of investment fraud, our legal team can help. Please contact our office today to get a free, no strings attached review of your case.

FAQs

What is the biggest financial fraud? ›

Enron. The Enron scandal is probably the most famous of Wall Street's financial scandals. Enron was a high-flying energy services company and a darling of the stock market in the last 1990s. When it eventually collapsed shareholders lost as much as $74 billion.

What is the most recent accounting scandal? ›

In July, the U.S. Securities and Exchange Commission (SEC) charged the telecommunications and technology systems company FTE Networks with conducting a multi-year accounting scam. According to the SEC report, the company inflated their company's revenues during certain periods by as much as 108%.

What company has a major financial scandal? ›

Top Accounting Scandals
  • Waste Management Scandal (1998) ...
  • Enron Scandal (2001) ...
  • WorldCom Scandal (2002) ...
  • Tyco Scandal (2002) ...
  • HealthSouth Scandal (2003) ...
  • Freddie Mac Scandal (2003) ...
  • American International Group (AIG) Scandal (2005) ...
  • Lehman Brothers Scandal (2008)
30 Jan 2022

What is the largest accounting fraud in US history? ›

WorldCom Accounting Scandal

The WorldCom accounting scandal was one of the most financially costly in corporate history, ultimately involving nearly $4 billion in accounting fraud. The leading telecommunications firm WorldCom in the 1990s.

What was the biggest fraud in history? ›

M
  • Gregor MacGregor, Scottish con man; tried to attract investment and settlers for the non-existent country of Poyais.
  • Bernard Madoff, creator of a $65 billion Ponzi scheme, the largest investor fraud ever attributed to a single individual.

Who is the most successful scammer? ›

The most famous con artist in modern history, Charles Ponzi raked in $15 million over the course of 18 months by promising outrageous short-term profits of 50% to 100% when he was, in fact, just shuffling money from one person to the next while keeping most for himself.

What is the biggest corporate scandal? ›

The Enron scandal is undoubtedly one of the most famous corporate scandals of all time. The situation started in early 2001, when analysts questioned the accounts presented in the company's previous annual report.

Why are there so many accounting scandals in recent years? ›

Accounting scandals have also increased in recent years because of the poor management of information, which pushes some organization officials to take advantage of poorly managed financial information by manipulating it to their benefit.

What accounting scandal happened with Enron? ›

The Enron scandal was a series of events involving dubious accounting practices that resulted in the bankruptcy of the energy, commodities, and services company Enron Corporation and the dissolution of the accounting firm Arthur Andersen.

What are the biggest financial crimes? ›

What are the main types of Financial Crime?
  • fraud.
  • cyber crime.
  • money laundering.
  • terrorist financing.
  • bribery and corruption.
  • market abuse and insider dealing.

What financial scandal means? ›

According to this definition financial scandals may involve accounting and financial market manipulation, multiple types of fraud, and accentuate the possibility of corporate bankruptcy.

What are the major corporate scandals in India? ›

  • Satyam computer (Satyam) Satyam was the first major fraud of its kind, which shocked the country and led to tightening of regulations, reporting and governance mechanisms. ...
  • Kingfisher Airlines (KLA) ...
  • Jet Airways. ...
  • Bhushan Steel. ...
  • PNB. ...
  • ILFS. ...
  • DHFL. ...
  • PMC Bank.
4 May 2021

What is an example of accounting fraud? ›

Overstating revenue, failing to record expenses, and misstating assets and liabilities are all ways to commit accounting fraud. The Enron scandal is one of the most famous examples of accounting fraud in history.

How did Enron commit fraud? ›

How Did Enron Hide Its Debt? Fastow and others at Enron orchestrated a scheme to use off-balance-sheet special purpose vehicles (SPVs), also known as special purposes entities (SPEs), to hide Enron's mountains of debt and toxic assets from investors and creditors.

How was Enron caught? ›

The clearly illegal smoking guns led to straightforward convictions – Fastow's misrepresentations about LJM; asset sales that were booked as revenue but in reality had a guarantee to be rebought, which meant it was a loan. This was a simple explanation of how Enron got caught.

Who sold a fake airport? ›

Emmanuel Nwude

What city is known for scamming? ›

The Bronx, New York—the borough of New York City with over 1.4 million people—has an unusually high fraud rate of over 21.5%. It is the only major city/place with a fraud rate of greater than 20% of all transactions.

Is fraud a serious crime? ›

Serious fraud can cover many different circumstances and if convicted can lead to a long custodial sentence. It's also standard practice for the Proceeds of Crime act to be initiated when a person is prosecuted for serious fraud.

Who is a famous scammer? ›

Charles Ponzi

Nonetheless, Charles Ponzi is widely thought of as the “original Ponzi scheme”. His scam centred on the postal service, at a time when it had developed international reply coupons (IRC) which allowed a person in one country to pay for the postage of a reply to a correspondent in another country.

What is ethical scandal? ›

A growing number of ethics scandals have surfaced over the past few decades. Scandals in. the corporate world—involving financial fraud, corruption, bribery, mistreatment of employees, among other types of misconduct—have resulted in decreased stakeholder and consumer.

How can financial scandals be prevented? ›

Your employees are your first line of defense for corporate fraud prevention.
...
Limit Access
  1. Avoid writing checks payable to cash.
  2. Don't issue blank checks.
  3. Only sign checks when they are filled out completely.
  4. Deface and retain voided checks.
20 Jan 2022

Does Enron still exist today? ›

Does Enron Exist Today? As a result of its financial scandal, Enron ended its bankruptcy in 2004. The name of the entity officially changed to Enron Creditors Recovery Corp., and the company's assets were liquidated and reorganized as part of the bankruptcy plan. It's last business, Prisma Energy, was sold in 2006.

What happened to Andrew Fastow? ›

Fastow was the Chief Financial Officer of Enron Corp. from 1998 – 2001. In 2004, he pled guilty to two counts of securities fraud and was sentenced to six years in federal prison. He completed his sentence in 2011 and now lives with his family in Houston, Texas.

What happened in the Arthur Andersen scandal? ›

On June 15, 2002, Andersen was convicted of obstruction of justice for shredding documents related to its audit of Enron, resulting in the Enron scandal. Although the Supreme Court reversed the firm's conviction, the impact of the scandal combined with the findings of criminal complicity ultimately destroyed the firm.

Who paid the largest financial crime in history? ›

In one of the biggest fraud settlements in US history, Pfizer paid $2.3bn (£1.7bn) for false claims relating to now withdrawn Bextra pain medicine.

What is financial crime in banking? ›

A Financial Crime in Banking sector (Banking Fraud) can be defined as potentially used illegal means to obtain money, assets, the property owned by any financial institution, by obtaining money from the depositor and fraudulently posing as any bank or financial institute.

What is the difference between AML and financial crime? ›

Money laundering is a type of financial crime. It involves taking criminally obtained proceeds (dirty money) and disguising their origins so they'll appear to be from a legitimate source.

What are two types of financial frauds? ›

  • Ponzi schemes.
  • Pyramid schemes.
  • Identity theft and identity fraud.
  • Embezzlement.
  • Tax fraud.
  • Credit card fraud.
  • Insurance fraud.
  • KYC fraud.
10 Mar 2022

What are the biggest financial frauds in India? ›

Scam #1: ABG Shipyard Scam🚢

Did you know this scam was even more significant than Nirav Modi's PNB Scam? 😵‍ ₹22,842 Crores were defrauded over 5 years. ABG Shipyard took loans from a consortium of banks (28 banks), which was led by ICICI Bank, IDBI Bank, and later SBI Bank in 2001.

Who is the biggest corruption in India? ›

A 2011 KPMG study reports India's real estate, telecommunications, and government-run social development projects as the three top sectors plagued by corruption. The study found India's defence, information technology, and energy sectors to be the most competitive and least corruption-prone sectors.

Which was the first major corruption case in independent India? ›

The Jeep scandal of 1948 was the first major corruption case in the Republic of India. V.K. Krishna Menon, the Indian High Commissioner to the United Kingdom, ignored protocols and signed a Rs 80 lakh contract for the purchase of army jeeps with a foreign firm.

Which of the following is an example of corporate frauds? ›

The Enron scandal from 2001 is a well-known example of corporate fraud.

How did Enron manipulate financial statements? ›

The company used off-balance-sheet vehicles to take on large amounts of debt and fabricate earnings. It owned many of these vehicles in non-arm's-length transactions, enriching its management at the expense of shareholders. Enron exploited accounting rules to conceal its activities from the public.

How much did Enron steal? ›

Here's a look at Enron, an energy trading company that collapsed after a massive accounting fraud scheme was revealed. Its 2001 bankruptcy filing was the largest in American history at the time. Estimated losses totaled $74 billion.

Who made money from Enron? ›

Other top sellers were Lou L. Pai, the former chairman of an Enron subsidiary, who received $353.7 million for his 5 million shares; Rebecca P. Mark-Jusbasche, a director and former Enron executive who received $79.5 million for 1.4 million shares; and Ken L.

Who from Enron went to jail? ›

Jeffrey Keith Skilling (born November 25, 1953) is a convicted American felon best known as the CEO of Enron Corporation during the Enron scandal. In 2006, he was convicted of federal felony charges relating to Enron's collapse and eventually sentenced to 24 years in prison.

What laws did Enron violate? ›

The three major violations under Generally Accepted Accounting Principles (GAAP) that preceded the fall of the Enron Corporation were: (1). The off-balance sheet arrangements, (2). The role of mark-to-market, and (3). The manipulation of derivatives.

What are the biggest financial crimes? ›

What are the main types of Financial Crime?
  • fraud.
  • cyber crime.
  • money laundering.
  • terrorist financing.
  • bribery and corruption.
  • market abuse and insider dealing.

What was the Freddie Mac scandal? ›

An accounting scandal erupted at the government-sponsored company in June 2003 when it disclosed that it had misstated earnings by some $5 billion — mostly underreported — for 2000-2002 to smooth quarterly volatility in earnings and meet Wall Street expectations.

What are the most common frauds in small business? ›

The Most Common Frauds in Small Business
  • Online phishing attacks.
  • Small business loan fraud.
  • Accounts payable fraud in small business.
  • Card and check payment frauds.
  • Payroll fraud.
  • How to prevent fraud in a small business.

How was the AIG scandal discovered? ›

In 2005, AIG was caught for an alleged fraud by the SEC, Justice Department and New York State Attorney General's office. Investigations were conducted by independent counsel on the request of AIG's audit committee.

Who paid the largest financial crime in history? ›

In one of the biggest fraud settlements in US history, Pfizer paid $2.3bn (£1.7bn) for false claims relating to now withdrawn Bextra pain medicine.

What is financial crime in banking? ›

A Financial Crime in Banking sector (Banking Fraud) can be defined as potentially used illegal means to obtain money, assets, the property owned by any financial institution, by obtaining money from the depositor and fraudulently posing as any bank or financial institute.

What is financial crime investigation? ›

The Financial Crime Investigations Unit conducts investigations involving complex crimes such as embezzlement, false pretense and corporate malfeasance, elder financial abuse and other related crimes. The unit is heavily involved in political corruption investigations when a financial motive is involved.

What was the Toshiba accounting scandal? ›

2015 - Toshiba discloses accounting malpractices across multiple divisions, which involved top management. In total, it overstated its pretax profit by 230 billion yen ($2 billion) over seven years.

What happened in the WorldCom scandal? ›

The SEC charged WorldCom with civil fraud and reached a $2.25 billion settlement. Several executives and the CEO were indicted on charges of securities fraud, conspiracy, and filing false documents with regulators.

What was the Fannie Mae scandal? ›

16, 2011 — The Securities and Exchange Commission today charged six former top executives of the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) with securities fraud, alleging they knew and approved of misleading statements claiming the companies had ...

What are the financial frauds in business management? ›

Financial fraud happens when someone deprives you of your money or otherwise harms your financial health through misleading, deceptive, or other illegal practices. This can be done through a variety of methods such as identity theft or investment fraud.

Who was involved in AIG scandal? ›

In 2009, Greenberg and Smith settled U.S. Securities and Exchange Commission charges over AIG's accounting, with Greenberg paying $15 million and Smith $1.5 million.

What role did AIG play in the financial crisis? ›

AIG was one of the beneficiaries of the 2008 bailout of institutions that were deemed "too big to fail." The insurance giant was among many that gambled on collateralized debt obligations and lost. AIG survived the financial crisis and repaid its massive debt to U.S. taxpayers.

Who bailed out AIG? ›

On Sept. 16, the Federal Reserve deemed AIG systemically important to the global financial system and provided the company with an $85-billion, two-year loan in exchange for a 79.9% equity stake in the company. In November, the Fed restructured its AIG bailout and reduced the size of the total loan to $60 billion.

Videos

1. How The Biggest Banks Get Away With Fraud
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4. Zelle scam: Wells Fargo customers lose thousands after scammers pose as bank employees
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5. The Secret History of the Credit Card (full documentary) | FRONTLINE
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