The biggest financial scams

The biggest benefit comes from fraud with finances. Scammers create pyramids, bank traders operate on the verge of risk, top-managers of companies mislead their investors. And some millionaires sometimes turn out to be trivial waste, whose capital is only an appearance. Surprisingly, such impressive deceptions do not entail severe punishment. Perhaps the fact is, criminals allow themselves the very best lawyers.

Recently, a judge of the New York District Court sentenced to two years in prison and a $ 5 million fine by former member of the board of directors of the American company Golden Sachs and Russian Sberbank Rajdat Gupta. This punishment he earned for trading in internal information and financial fraud. The damage done to them was much more impressive than the amount of the fine.

It is quite difficult to investigate such crimes, and the temptation to enrich millions by the stroke of a pen is great. We will tell below about the most famous and scandalous financial swindlers of recent times, operating in different parts of the world.

The biggest financial scams

Bernard Medoff.

This financial fraudster managed to incur losses totaling $ 65 billion. The authorities sentenced Medoff to imprisonment for 150 years. In the 1960s, Bernard founded his own company, Madoff Investment Securities. It has managed to become the largest and most famous financial pyramid in the world in recent decades. The companies were unlimitedly trusted by investors, and it was not just about private clients, but also about investment companies and hedge funds. In the midst of the financial crisis of 2008, it turned out that the company Medoffa – blown. In the stressful period, it was no longer able to attract new investors, it turned out that there was simply no profit to former depositors. The injured were millions of individuals, large financial organizations. The collapse was so grandiose that one major investor, a French investor who invested about $ 1.5 billion in Medoff, even committed suicide. He cut scores with life after it turned out that he fed the collapsed pyramid. Jeffrey Skilling and Andrew Fastov.

A pair of scams caused damage of 40 billion dollars. As a result, scammers decided to cooperate with the investigation. Skilling received a prison term of 25 years, and Fastov got off with 6 years in prison. When the energy company Enron collapsed, it became an unpleasant surprise for the American economy, no less than the collapse of the company Medoffa. Assets of the company were estimated at 47.3 billion dollars, but Enron executives – Fastov and Skilling, could bring losses of 40 billion dollars. And the blame for everything – the acquisition of a loss-making company. Her bad financial condition, top managers of Enron decided not to advertise. Over time, a whole system of offshore companies that bought from Enron bad, “unprofitable” assets, accounting for the shares of the company itself. In 2001, the truth became known, the company recognized itself bankrupt. And its leaders have got behind a lattice. Bernard Ebbers and Scott Sullivan.

And this couple of managers eventually decided to tell all the authorities. Scammers caused damage of 11 billion dollars. As a result, Ebbers landed in prison for 25 years, and his assistant, Sullivan – for 5 years. Not only that scammers have caused huge damage, since they also actually destroyed the second largest telecommunications company in the US – WorldCom. This was the result of the stay of Ebbers and Sullivan as leaders of this once glorious firm. It developed so quickly and extensively that sooner or later financial problems had to appear. So, new assets were acquired, which sometimes cost three times as much as the company itself. Even after the resignation of Ebbers, it turned out that with the help of Sullivan, the head of WorldCom also turned a few large scams in the amount of the very 11 billion dollars.

The biggest financial scams

Robert Allen Stanford.

For his criminal activities, this financier was sentenced to a prison term of 110 years. The reason for this was the damage caused in 8 billion dollars. Stanford was the founder of Stanford Financial Group. In the summer of 2009, he was arrested on the basis of 21 lawsuits from investors. When the authorities began to understand the activities of Stanford, it turned out that he built a huge financial pyramid. And in this case, as well as with Medoff’s company, the financial crisis of 2008 became the cause of the collapse. Old depositors stopped receiving interest on deposits, as new customers stopped investing. Stanford almost became a record-breaker for the term of prison sentences for financiers. Prosecutors asked the court to sentence the fraudster to 230 years in prison, but the Federal Court of Houston reduced the time almost twice. So Stanford could not surpass Medoff either on the amount of fraud, nor on the length of the prison term.

The biggest financial scams

Jerome Kerviel.

The financier brought losses of 4.9 billion euros, which the court sentenced him to return to the victims. Also, Kerviel will spend three years behind the prison bars. Interestingly, Jerome was not a high-ranking top manager. He was just a trader of Societe Generale Bank, but managed to inflict considerable damage on his employer with his unauthorized trade. Although the court found him fraudulent, Kerviel himself did not confess his sins. He claimed that his operations were carried out by order of immediate leaders. And the Frenchman did not pursue personal gain, but simply tried to achieve high rates, which would bring him a bonus. Only now the trade was developing unsuccessfully. Kerviel tried to compensate for the losses with new, even more risky operations, which only worsened the situation. As a result, the trader’s activity was disclosed, and he himself was arrested.

The biggest financial scams

Kazutsugi Nami.

And again we will talk about a large financial pyramid, “Forbes” generally put it in third place in its size. Kazutsugs We founded the company L @ G in 2000, which lasted only 7 years. During this time, the Japanese under the promises of 36% per annum managed to raise 128.5 billion yen. In 2007, the company suddenly stopped paying interest on deposits and refused to return the funds of its investors. It turned out that there was no money in the accounts – the authorities found the company only about 300 million yen (3 million dollars). Three years of investigation, in the end, a 76-year-old swindler was sentenced to 18 years in prison. Perhaps this morally satisfied the deceived investors, but no one could return them to the lost two billion dollars.

The biggest financial scams

Kvek Adoboli.

It is preliminary known that the activities of Adoboli brought a loss of 2.3 billion dollars. So far, the swindler has not received a verdict, and he does not admit his guilt. Although it is known that he faces about 10 years in prison. Quob Adoboli was born in Ghana, but was able to become a trader in the Swiss bank UBS. In September 2011, the financier was detained by the British police, accusing them of exceeding their official powers. It turned out that the trader was playing his own game with stocks and funds on stock exchanges, which his superiors did not know about. His activities Adoboli covered up by forging documents on the transactions. In total, 4 criminal cases were brought against him. His case is very similar to the case with Jérôme Kerviel. Now the line of defense of the accused and lawyers is built according to the same scheme. Trader argues that all transactions were conducted with the approval of the authorities, which knew everything. It seems that there was no desire for enrichment for Quec.

The biggest financial scams

Martin Grass.

Dreaming about major bonuses, the executive director of the pharmacy network Rite Aid (the third, by the way, the largest in the US), decided to assign his company a non-existent profit of 1.6 billion dollars. He was supported by several top managers. It is interesting that the company was a family company, it was founded by the father of the swindler, Alex Grass.Martin, however, chose a different path for the development of the firm: he forged reports on accounts payable and added information about those drugs that were generally not sold to anyone in the consolidated income of his network. The drugs stolen from the pharmacies were not taken into account anywhere at all. In 1999, a criminal case was instituted against Grasse, which numbered 36 criminal incidents. Among other things, it was also about providing unreliable information to auditors and investors. After 10 years of court hearings, the swindler was sentenced to 8 years in prison. Grasse met his sentence with repentance. He appealed to the shareholders of his company and simply to the employees: “I regret the harm that you have caused your actions.”

The biggest financial scams

Dennis Kozlowski and Mark Schwartz.

The authorities sentenced both persons involved in the criminal case to 25 years in prison, although Schwartz did not fully serve his term and was released. The head of the fraudulent scheme was Dennis Kozlowski. With the help of his assistant, Mark Schwartz, he registered Tyco Industrial in Bermuda. She became a real champion among acquisitions. The international conglomerate eventually included about a thousand companies. However, over time it turned out that not all of the company’s profits were distributed fairly. So, about $ 600 million Kozlowski spent personally on himself with the knowledge of his assistant. The list of provocative luxury purchases went out really scandalous – so, the swindler bought a shower curtain for 6 thousand dollars, and the clothes hanger cost him $ 2,000. Only a couple of scammers caused damage to their own company of $ 1.6 billion, which led to such a verdict.

The biggest financial scams

Nick Leeson.

We can say that it was Leeson who became the forerunner of the activities of Adoboli and Kerviel. In 1995, he was a senior trader in the Singapore branch of the English bank Barings. And in this case, Leeson decided to start an independent game. The object of his interest were futures contracts on the SIMEX index. As a result, the reputable bank was forced to admit its bankruptcy. Leeson inflicted such damage, which tripled the value of the assets of the financial institution. As a result, the credit organization was sold for a symbolic amount of 1 pound sterling. The trader himself, realizing that he would not be able to hide his actions further and cause the damage, started on the run. On his desk, Leeson left a short note, “Excuse me.” Through Malaysia and Singapore, the swindler made his way to Germany, where he was arrested. The trader was extradited to Singapore, where he served 6.5 years in prison. It is interesting that, having gone to freedom, Nick Leeson decided to become a sports functionary. He became the general director of the Irish football club Galway United. In his spare time, Leeson wrote two autobiographical books. One of them, an economic thriller with the eloquent title “Trader-cheater: How I bankrupted Barings and shocked the financial world” became the basis for the well-known film “The Swindler”. The total loss from the activities of Leeson amounted to 1.4 billion dollars. The hosts of the Irish club, apparently, very much trust the repentant swindler. It is also interesting that the interests of Leeson in court were represented by lawyers from the Kingsley Napley office. In 2011, they also defended the interests of another well-known financial swindler, Kvek Adoboli.

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