Scams and fraud have been going on ever since humans began trading (I imagine). They make a small number of people very rich, at least while they’re getting away with it, while hundreds or thousands of people are conned out of their money. Somehow we find this fascinating particularly if the scam was a clever one or involves shocking levels of corruption in the system.
In 2011 India was under the spotlight for a potentially huge telecoms fraud scandal which involved the country’s telecoms minister Andimuthu Raja. Essar and Loop Communications were the two main companies accused of this fraud which consisted of mis-selling telecoms licences. International coverage of the scam has put many foreign investors off dealing with India’s telecoms industry. With widespread telecoms fraud training future scandals could be prevented but it’s now a question of regaining the confidence of investors, India can only wait.
- Christophe Rocancourt is a con artist who never shied away from the spotlight. He’s been photographed on the red carpet with Naomi Campbell, Mickey Rourke and Sonia Rolland, an actress and former Miss France but sometimes better known as the mother of Rocancourt’s daughter. He specialised in getting money out of the rich and famous primarily by claiming to be one of the Rockefeller family, by posing as a movie producer and generally befriending the super rich. He’s even been on US chat show Dateline boasting about the success of his scams which he himself estimates adds up to around $40million.
- Bernard Madoff, a stockbroker from New York is credited with achieving the biggest fraud ever committed by an individual, a whopping $65 billion. At one time Madoff was the non-executive Chairman of the NASDAQ stock market and an extremely powerful player in the global economy. His own firm, which he set up in 1960, took money from clients but never invested it, instead depositing it into a bank account then ordering two workers to produce false trading reports to verify the investments that his customers thought were being made. He was finally exposed in 2008 only after confessing to his sons.
- Frank Abagnale is perhaps the most well known con man of all time. He is the inspiration behind the movie Catch Me If You Can, a much-loved box office hit. Abagnale posed as many characters ranging from an airline pilot to a teaching assistant. He’s an expert at cheque forgery and hopped around the world, living it up and leaving a trail of bad cheques behind him. In 1969 French authorities caught up with him and so followed a string of prison stays in Europe and the US. Amazingly he has since put his experience to use advising businesses on fraud. What better fraud training do you need than acting being a fraudster? This new line of work has apparently made him a millionaire!
- Jeffrey Skilling and Kenneth Lay aka the chaps behind the Enron accounting fraud. The fraud conducted at Enron was so big that destabilised the stock market and toppled the holding company Arthur Anderson. How did they do it? Skilling and Lay falsified Enron’s statements, hiding the true state of the business and encouraging investors to give them $74 billion.
- Bernard Ebbers, ex-CEO of WorldCom telecom company. WorldCom went bankrupt in 2002 after massive fraud. In 1999 WorldCom was suffering a decrease in its share price, a fat which Ebbers attempted to cover up, fearing that more share holders would sell and thus continue to drive down the value of the company. In addition his board members to lend him money to pay off the banks. None of these measures paid off though and Ebbers was convicted of fraud in 2002.
- Charles Ponzi is the father of the Ponzi Scheme, a investment scheme that paid it’s investors returns with the money they’d put in or that of other investors without ever actually generating any profits. Charles Ponzi scammed and conned his way through his first years as an immigrant in America before hitting on a legal loophole that allowed him to exploit the price difference between coupons in Europe and America. He recognized that he could make up to 400% profit and began campaigning for investment among his circle of friends and acquaintances. Despite this seemingly winning idea Ponzi was actually losing money. He began using his investors’ cash to pay returns on investment so that it appeared his scheme was working. However suspicions were soon piqued and Ponzi was rumbled. Today the term ‘Ponzi Scheme’ is now used to describe get rich quick scams like that orchestrated by Bernard Madoff.