5 of the Worst Corporate Fraud Cases of All Time

Have you ever wondered who the most infamous corporate fraudsters of all time are? Well, these notorious swindlers are definitely ones for the record books, as their ruthless exploitation of corporate ventures has given a new meaning to the concept of corporate fraud.

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The Ponzi Scheme

Charles Ponzi, better known as the infamous Italian criminal who scammed unsuspecting investors out of $7 million in the early 1900s, made his fortune by presenting his scams as a sustainable investment.

While he wasn’t the mastermind behind the actual concept of a Ponzi scheme, he’s name has been used to describe similar schemes because of the magnitude of his ploy.

When he was living in Boston back in 1918, he received a letter from a Spanish company that contained an international reply coupon. The recipient could redeem this coupon for postage back to the sender’s country. So, he decided he could buy these coupons in one country and exchange them for postage in another where the value was much higher. Somehow, he also managed to convince his friends to invest in the scheme with the promise of receiving outrageous returns.

His scheme worked for a while, as his investors were happy, and he was able to pocket millions of dollars. He was even raking in as much as $250,000 a day.

In 1920 the scheme collapsed and his investors lost around $20 million.

The L&G Bankruptcy

Possibly one of the biggest scams in Japanese history, the L&G Bankruptcy was a result of fraudulent behaviour undertaken by the chairman of a futon and food company, L&G (Ladies and Gentleman).

It’s believed that roughly 37,000 people were tricked out of more than $1.4 billion in the early 2000s.

Kazutsugi Nami assured investors they would receive annual returns of more than 30pc. He also invented his own digital currency, Enten. When he started paying dividends to investors in this currency, people started asking questions and lawsuits were filed.

In 2010 he was sentenced to 18 years in prison.

Catch Me if You Can

If you’ve seen the 2002 film starring Leonardo DiCaprio, Catch Me if You Can, you will probably be familiar with Frank Abagnale’s story.

In short, he was a self-taught imposter and master forger of cheques. He’s career as a fraudster started in 1960s New York when he dabbled in small scams as a runaway teenager. When he was 16, he changed the date on his driver’s license so people would think he was older and started altering and cashing bank cheques. He even went so far as to pose as doctors and pilots, among others, to add legitimacy to his schemes.

By the time he hit drinking age, he had already cashed an estimated $2.5 million in fake cheques.

When he was 21, he moved to France, where he was caught before serving five years in French, Swedish and American prisons. He was then released on the condition he would work with the FBI, so the US government could learn and crack down on his fraudulent methods. He’s now been with the FB for more than 35-years.

The Man Who Sold the Eiffel Tower

Victor Lustig, once a humble pick pocketer, became the man who fraudulently sold the Eiffel Tower, not once, but twice!

Back when many Parisians regarded the Eiffel Tower as a monstrosity, Lustig took some initiative, forged some government credentials, and sold the iconic landmark to a scrap metal dealer for $70,000. Months later, he pulled the same stunt again with another unsuspecting buyer.

He was also the founder and chief operator of a large-scale counterfeit operation that saw $100,000 ($1,432,700 by today’s standards) of fake currency into the US economy each week!

He was eventually caught in 1935 when he’s girlfriend turned him in because she thought he was having an affair. If that wasn’t already controversial enough, he then escaped from the Federal Detention headquarters in Manhattan the night before his trial.

Unluckily for him, he was aught a month later in Pittsburgh and sentenced to 20 years in Alcatraz. He died in prison in 1947.

The Lincoln Savings and Loan Scam

Once known as a devout church-goer, a decorated World War II fighter pilot and a champion swimmer, Charles H. Keating was hardly a man you would peg to be one of the biggest financial fraudsters of all time.

Keating was a man with many interests, one of which turned him into a successful property investor. It’s this business venture that led to him scamming a staggering 23,000 investors out of $250 million.

Back in 1984, he purchases a small mortgage lending company in California, Lincoln Savings and Loans. It was around about this time that industry regulations were more relaxed and businesses were able to take greater risks with their depositor’s cash – Keating, was quick to take advantage of this.

For five years, Keating lived the life of a corporate executive, during which time he invested a lot of cash (that of course, wasn’t his) into high-risk ventures, neglecting to tell depositors that their money was at risk. He also lived a lavish lifestyle, throwing over the top Gatsby-style parties that he certainly couldn’t afford.

In 1989, his business failed and thousands of elderly investors were left with worthless bonds. He ended up serving four and a half years in prison after being convicted of fraud. 

As a corporate fraud detection agency in Perth, our team of highly trained personal investigators have the knowledge and skills required to run successful corporate fraud investigations in Perth.

If you’re worried your business is being taken advantage of, contact In Depth investigations today!