October 23, 2019

5 Famous White Collar Crime Cases

White-collar crimes/ corporate crimes are nonviolent yet financially motivated crimes that are usually committed by government professionals and businesses.

Some famous examples of this are Ponzi schemes, fraud, wage theft, insider trading, bribery, labor racketeering, cybercrime, embezzlement, copyright infringement, money laundering, forgery, and identity theft.

The most high-profile and complex types of criminal investigations typically involve white-collar crime cases. These crimes are usually handled by law enforcement agencies like the Federal Bureau of Investigation (FBI) and the Securities and Exchange Commission along with the state-level agencies.

Since those who are involved in these white-collar crimes are usually executives and high-ranking business professionals, the cases typically make headlines nationwide and even globally.  Those convicted of these crimes may face prison sentences and can also be subjected to pay up to millions of dollars in financial damages and fines.

Here are some of the most famous/infamous companies and individuals that were involved in white-collar crime cases:

Wells Fargo Account Fraud Scandal

In 2016, Wells Fargo employees secretly created millions of fraudulent deposit accounts and submitted 565,443 credit card applications without their customer’s knowledge or consent to hit unrealistic sales targets and to receive incentives and bonuses on top of their salary.

As a result, customers were then charged all sorts of fees for accounts they didn’t know existed. Wells Fargo needed to pay $185 million in fines and refund $5 million to the customers who were affected. This is the largest penalty ever recorded since the Consumer Financial Protection Bureau was established in 2011.

Bernard Madoff

Bernard Madoff is considered as the most well-known white-collar criminal. Madoff is a former chairman of Nasdaq and was the founder of a successful Wall Street firm. According to Investopedia, he was found guilty of “an elaborate PONZI SCHEME, which promised large returns on investments.” He was sentenced to 150 years in prison.

Enron

This is a story of a company that was once successful but then resorted to schemes in an attempt to fabricate profits and hide losses. At it’ speak, Enron shares were worth $90.75, which eventually fell to just $0.67 in 2002 when the company filed for bankruptcy. They were found guilty of off-balance-sheet special purpose vehicles (SPVs) in an attempt to hide their huge debts and “toxic assets” from both creditors and investors. Andrew Fastow the company’s Chief Financial Officer (CFO) was charged since he was the mind behind these false business tactics.

HealthSouth

According to The New York Times, auditors discovered “HUNDREDS OF MILLIONS OF DOLLARS IN PREVIOUSLY UNREPORTED ACCOUNTING FRAUD AT HEALTHSOUTH.” This all happened in 2004. Eventually, the company founder Richard M. Scrushy was indicted on 84 counts of fraud along with at least five former CFOs who pleaded guilty to charges.

WorldCom

Known as the “BIGGEST ACCOUNTING SCANDALS IN U.S. HISTORY,” according to CBS News. The WorldCom investigation started when internal audits discovered “improper accounting of more than $3.8 billion in expenses over five quarters.”

These irregularities did not comply with GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. As a result, senior vice president and controller David Myers resigned from his post, and 17,000 WorldCom employees lost their jobs.