The largest financial swindlers



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The biggest benefit comes from financial fraud. Perhaps the point is, criminals afford the very best lawyers.

A New York District Court judge recently sentenced Rajdat Gupta, a former member of the board of directors of the American company Golden Sachs and Russian Sberbank, to two years in prison and a $ 5 million fine. Such a punishment he deserved for trading inside information and financial fraud. The harm caused to them turned out to be much more impressive than the amount of the fine.

It is quite difficult to investigate such crimes, and the temptation to enrich yourself by millions with a stroke of the 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.

Bernard Medoff. This financial fraudster has managed to cause losses totaling $ 65 billion. Authorities sentenced Medoff to 150 years in prison. In the 1960s, Bernard founded his own company, Madoff Investment Securities. She managed to become the largest and most famous financial pyramid in the world in recent decades. Investors had unlimited trust in the company, and it was not only about private clients, but also about investment companies and hedge funds. In the midst of the 2008 financial crisis, Medoff's company turned out to be bloated. In a tense period, she was no longer able to lure new investors, it turned out that there was simply nothing to pay the profit to the former investors. Millions of individuals and large financial organizations were affected. The crash was so dramatic that one large investor, a French investor who had invested about $ 1.5 billion in Medoff's company, even committed suicide. He took his own life after it turned out that he was feeding the collapsed pyramid.

Jeffrey Skilling and Andrew Fastow. A pair of swindlers caused $ 40 billion in damage. As a result, the scammers decided to cooperate with the investigation. Skilling received a prison sentence of 25 years, and Fastov got off with 6 years in prison. When energy company Enron collapsed, it was an unpleasant surprise to the American economy, no less than the collapse of Medoff's company. The company's assets were estimated at $ 47.3 billion, but the leaders of Enron - Fastov and Skilling, were able to bring losses of $ 40 billion. And the blame is the acquisition of a loss-making company. Enron top managers decided not to advertise her poor financial condition. Over time, a whole system of offshore companies appeared, which bought up bad, “unprofitable” assets from Enron, paying with the shares of the company itself. In 2001, the truth became known, the company declared itself bankrupt. And its leaders went to jail.

Bernard Ebbers and Scott Sullivan. And this pair of managers eventually decided to tell everything to the authorities. The scammers caused $ 11 billion in damage. As a result, Ebbers ended up in prison for 25 years, and his assistant, Sullivan, for 5 years. Not only did the scammers inflict huge damage, but they also effectively destroyed the second largest telecommunications company in the United States - WorldCom. This was the result of Ebbers and Sullivan's tenure as leaders of this once glorious firm. It developed so rapidly and extensively that sooner or later financial problems were bound to appear. Thus, new assets were acquired, which sometimes cost three times more than the company itself. After the resignation of Ebbers, it became clear that with the help of Sullivan, the head of WorldCom also turned out several major scams worth the same $ 11 billion.

Robert Allen Stanford. For his criminal activities, this financier was sentenced to a prison term of as much as 110 years. The reason for this was the damage caused by $ 8 billion. 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 had built a huge financial pyramid. And in this case, as with Medoff's company, the crash was caused by the 2008 financial crisis. Old depositors stopped receiving interest on deposits as new customers stopped investing. Stanford nearly broke the record for the financiers' jail sentence. Prosecutors asked the court to sentence the fraudster to 230 years in prison, but the Federal Court of Houston cut the sentence by almost half. So Stanford could not surpass Medoff either in the amount of the scam or in the length of the prison term.

Jerome Kerviel. The financier brought losses of 4.9 billion euros, which the court sentenced him to return to the victims. Kerviel will also spend three years behind bars. Interestingly, Jerome was not a high-ranking top manager. He was only a trader at the Societe Generale bank, but his unauthorized trade managed to cause considerable damage to the employer. Although the court recognized him as fraudsters, Kerviel himself did not admit his sins. He claimed that he carried out his operations on the orders of his immediate superiors. Moreover, the Frenchman did not pursue personal gain, but simply tried to achieve high performance that would bring him an award. Only now the trade was unsuccessful. Kerviel tried to compensate for the losses with new, even more risky operations, which only made the situation worse. As a result, the trader's activities were exposed, and he himself was arrested.

Kazutsugi Nami. And again we will talk about a large financial pyramid, "Forbes" generally put it in third place in terms of its size. Kazutsugi Nami founded L @ G in 2000, which lasted only 7 years. During this time, the Japanese managed to attract 128.5 billion yen under the promise of 36% per annum interest. In 2007, the company unexpectedly stopped paying interest on deposits and refused to return funds from its investors. It turned out that there was no more money in the accounts - the authorities found only about 300 million yen ($ 3 million) from the company. An investigation was conducted for three years, and as a result, the 76-year-old fraudster was sentenced to 18 years in prison. Perhaps this morally satisfied the defrauded investors, but no one could return the lost two billion dollars to them.

Kvek Adoboli. It is preliminary known that the activities of Adoboli brought a loss of $ 2.3 billion. The fraudster has not yet received a verdict, and he does not admit his guilt. Although it is known that he faces about 10 years in prison. Kwek Adoboli was born in Ghana but was able to become a trader at the Swiss bank UBS. In September 2011, the financier was detained by the British police on charges of abuse of office. 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. Adoboli covered up his activities by forging documents about transactions. In total, 4 criminal cases were opened against him. His case is very similar to that of Jerome Kerviel. Now the line of defense of the accused and the lawyers is built according to the same pattern. The trader claims that all transactions were carried out with the approval of the authorities, who knew about everything. Kvek allegedly had no desire for enrichment.

Martin Grass. Dreaming of big bonuses, the executive director of the Rite Aid pharmacy chain (the third largest in the US, by the way) decided to credit his company with a non-existent profit of $ 1.6 billion. Several top managers supported him at once. Interestingly, the company was family-owned, it was founded by the fraudster's father, Alex Grass. Martin chose a different path of development for the company - he faked accounts payable and entered into the consolidated data on the income of his network information about those drugs that were not sold to anyone at all. The drugs stolen from pharmacies were not taken into account at all. In 1999, a criminal case was opened against Grasse, which consisted of 36 criminal episodes. Among other things, it was about providing inaccurate information to auditors and just investors. After 10 years of court hearings, the fraudster was sentenced to 8 years in prison. Grasse met his sentence with remorse. He addressed his company's shareholders and employees: "I am sorry for the harm that I have done to you by my actions."

Dennis Kozlowski and Mark Schwartz. The authorities sentenced both defendants in the criminal case to 25 years in prison, however, Schwartz did not fully serve his term and has already been released. Dennis Kozlowski became the head of the fraudulent scheme. He, with the help of his assistant, Mark Schwartz, registered Tyco Industrial in Bermuda. She has become a true takeover champion. As a result, the international conglomerate included about a thousand companies. However, over time it became clear that not all of the company's profits were distributed fairly. So, about 600 million dollars Kozlowski spent personally on himself with the knowledge of his assistant. The list of defiantly luxurious purchases turned out to be truly scandalous - for example, a swindler bought a shower curtain for 6 thousand dollars, and a clothes hanger cost him 2 thousand dollars. Just a couple of scammers caused $ 1.6 billion in damage to their own company, which led to such a verdict.

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 at the Singapore branch of the British bank Barings. And in this case, Leeson decided to start playing on his own. The object of his interest was the futures contracts on the SIMEX index. As a result, the respected bank was forced to declare bankruptcy. Leeson caused damage that was three times the value of the assets of the financial institution. As a result, the credit institution was sold for a symbolic amount of 1 pound sterling. The trader himself, realizing that it would no longer be possible to conceal his actions and the damage caused, set off on the run. On his desk, Leeson left a short note "Excuse me." Through Malaysia and Singapore, the fraudster got to Germany, where he was arrested. The trader was extradited to Singapore, where he served 6.5 years in prison. Interestingly, after being released, Nick Leeson decided to become a sports functionary. He became the CEO 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 "The Fraudulent Trader: How I Bankrupt Barings and Shocked the Financial World" became the basis for the famous film "The Swindler". Leeson's total loss was $ 1.4 billion. The owners of the Irish club seem to have a lot of trust in the repentant swindler. It is also interesting that Leeson was represented in court by lawyers from Kingsley Napley. In 2011, they also defended the interests of another well-known financial swindler, Kvek Adoboli.


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