Monday, January 5, 2009

World's Biggest Frauds, published from India, put together an interesting set of profiles for what they consider to be the world's biggest fraud artists. They include the following:

Charles Ponzi: 1920s schemer who bilked investors with promises of great returns offering "foreign postage coupons." He owed investors some $28 million in 1920 when the scheme collapsed (a very significant amount of money back then). Ponzi is profiled in Marquet International's White Collar Rogue's Gallery here.

Bernard Madoff: current hedge fund Ponzi schemer who has reportedly caused losses exceeding $50 million. He is the next candidate for the White Collar Rogue's Gallery. Until then, see FraudTalk's list of Madoff victims here.

Jerome Kerviel: rogue trader at French bank, Societe Generale, who lost a reported 5 billion euros by making fake trades in European stock derivatives in 2006 and 2007.

Reed Eliot Slatkin: co-founder of EarthLink, an internet service provider based in Atlanta which turned out to be nothing more than a Ponzi scheme too. Slatkin raised nearly $600 million from investors of which nearly half was lost. He's another prime candidate for the White Collar Rogue's Gallery.

Brian Hunter: Canadian natural gas trader for Amaranth Advisors, a $9 billion hedge fund which collapsed in 2006 on $6 billion in losses from his trades. He got a $30 million fine from FERC for manipulating natural gas prices in 2006.

Giancarlo Paretti: Italian businessman and sometime film industry mogul. Paretti's Pathe Studios purchased Cannon Film Group and MGM, and later was acquired by Chargeurs in 1999. However, Paretti was accused of bilking the companies for his own benefit, living extremely lavishly, for reported losses of $5 billion.

John Meriwether: founder of the now defunct Long Term Capital Management, the original tiger hedge fund that collapsed in 1998 with $4 billion in losses.

Nick Leeson: rogue derivatives trader in Asia who bankrupted UK-based Barings Bank in 1995 with $1.7 billion in losses.

Yasuo Hamanaka: rogue copper trader at Japan's Sumitomo Corporation, responsible for $2.6 billion in losses when he tried to corner the copper market in 1996, but bet the wrong way.

The Wall Street Journal published their own list a year ago before the Madoff affair became known. In addition to Kervial at Societe General, Hunter at Amaranth, Nick Leeson at Barings and Yasuo Hamanaka at Sumitomo, the Journal's list includes:

BCCI (1991 with $16 billion in losses);

Allied Irish Bank (2002 with $691 million in losses);

Joseph Jett: rogue trader at Kidder Peabody (1994 with $350 million in losses);

We might also include a number of the members of the White Collar Rogue's Gallery, including:

Bernie Ebbers: former Worldcom CEO ($11 billion financial statement fraud)

Cendant Corp. ($3 billion financial statement fraud)

Enron ($62 billion in losses to investors)

John Rigas & Adelphia ($2.3 billion in concealed liabilities - looted the company for $100 million)

Richard Scrushy & Healthsouth ($2.7 billion financial statement fraud)

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