The world has several corporate companies operational at the moment. However, some came across as a fraud in the past. The article will provide details about the top corporate frauds and famous scams in the world. Where are the whereabouts of these fraudsters? If we talk about the location, most of these incidents occurred in the United States. Let us have more details below.
Top 3 Corporate Frauds In The World
Enron Scandal: It was an energy trading and utility company in Houston, Texas. It committed one of the biggest accounting frauds in history. Under this fraud, the company used mark-to-market accounting leading to accounting irregularities. After Jeffrey Skilling joined the company, the performance was calculated based on profitability rather than respect, integrity, communication, and excellence. The company’s COO, CEO, and founder wanted the growth of the company. They started hiding the unsuccessful projects and highlighted only the good things. Even Fortune represented the company as the most innovative.
Enron started making losses when investors lost interest in internet companies. The scam highlighted when Enron was making a continuous loss but was showing profits. SEC started an investigation and the scandal came to light. Jeffrey Skilling was released after 14 years of imprisonment in 2019. His original sentence was for 24 years. While Kenneth Lay passed away in 2006 before any imprisonment.
Bernie Madoff Ponzi Scheme: Bernie Madoff went from being the most respectful person to the least respectful in 2008 after the scam of $65 billion. Berne belonged to a middle-class immigrant family who started trading in penny stocks. He was the most respected person because he helped start computerised trading in the US. He has also been the chairman of NASDAQ for some time. In the 2008 market fall, people started taking out money from his firm due to unemployment. It was time when he revealed that he never put money in securities and use it for living a luxurious life. Thus, he admitted his scam in front of his sons. They informed the police. Afterward, he got the sentence of 150 years and passed away in 2021. There was a recovery of only $14 billion after the scam.
WorldCom Scandal: It was a telecommunications company that touched its peak in the US to become the second biggest company after AT&T. It changed its name to Worldcom in 1995 after acquiring different telecommunications firms. It acquired its first company in 1992 for 720 million dollars. The company inflated its earnings and assets by $11 billion or more. It leads to misinterpretation of the company’s financial position. They were showing decreasing expenses with increasing profits every year using accounting tricks. The company revealed a fraud of 4 billion dollars in June 2002 and filed for bankruptcy in July 2002. Bernard Ebbers was sentenced to 25 years in prison. He had health issues in 2019 releasing from prison and passed away in 2020.