The 10 biggest financial scams in history

Financial scams are as widespread today as they were more than 100 years ago, when Italian Charles Ponzi was busy robbing investors of their fortunes in one of the first high-profile frauds ever recorded in history.
There are many, too many, frauds that with their skillful fusion of deception and greed have marked world history, leaving behind stories of ruin and scandal that still resonate today.
From daring market manipulations to complex accounting frauds, these events tell not only of huge sums of money evaporating into the air but also of trusts betrayed and laws broken.
In this ranking developed by Money.it, we will immerse ourselves in the folds of the most famous financial scams in history, analyzing how some brilliant criminal minds have managed to weave networks of deception so intricate as to defy understanding and, in some cases, lead to the collapse of entire economic systems.
1) Charles Ponzi In 1919, Charles Ponzi, an Italian emigrant to Boston, United States, devised a get-rich scheme that involved purchasing low-priced international answering cards abroad and then selling them for profit in the United States .
He convinced numerous investors to back him, despite the fact that his business was accumulating huge debts due to logistical difficulties and ever-increasing expenses.
In what is now a well-known trick, Ponzi simply used the funds from new investors to pay existing investors (and himself).
While not the first example of this type of scam, its notoriety has given rise to the term “Ponzi scheme.” 2) FTX On November 2, 2023, a jury in Manhattan, New York, found Sam Bankman-Fried, founder of cryptocurrency trading platform FTX, guilty on seven counts, including wire fraud, securities fraud and money laundering of money.
US government prosecutors have called the case of the nicknamed SBF one of the largest financial fraud cases in history.
Some of his former associates, including business partner Gary Wang, have pleaded guilty and cooperated with investigators.
Last week, the sentence: SBF will have to serve 25 years in prison for fraud.
The ruling against Bankman-Fried brings to a close a 17-month saga that began in November 2022 when FTX, the cryptocurrency exchange he co-founded and served as CEO, imploded, resulting in an $8 billion loss for investors.
its customers.
Bankman-Fried resigned during the company's collapse and the new ownership declared bankruptcy.
Prosecutors said he stole from FTX clients and used the money for political contributions, investments and personal gain.
read also Banks in crisis in Italy: the list of failures from 1892 to today 3) Wirecard On 8 December 2022, the executives of Wirecard, a company specializing in electronic payments based in Munich, Germany, were put on trial in what the media called it the largest corporate fraud case in German history.
Former CEO Markus Braun and two senior executives, Oliver Bellenhaus and Stephan von Erffa, face several years in prison if they are convicted.
In December 2023, Munich prosecutors also filed fraud charges against Burkhard Ley, Wirecard's former chief financial officer.
Another Wirecard executive, Jan Marsalek, is reportedly hiding in Russia.
Currently, Marsalek is on Europe's "most wanted" list as an international fugitive, but that did not stop him from sending a letter in support of Braun via his lawyer in July 2023.
Wirecard found itself in the spotlight when it declared insolvency in 2020 and regulators discovered that €1.9 billion was missing from the company's accounts.
According to German regulators' accusations, that money never existed.
Braun was arrested and Marsalek fled the country.
Observers expect the process to last at least until the summer of this year.
Meanwhile, investors can only watch the fraud trial unfold, with little hope of recovering their money.
4) Volkswagen This famous German car manufacturer was at the center of the emissions scandal in 2015.
That year, company engineers installed a special type of software on 11 million diesel cars to detect when cars underwent emissions tests so they could change the results.
Actual nitrogen oxide emissions from Volkswagen vehicles were 40 times higher than permitted by U.S.
legal standards.
When US regulators discovered the plot, which went down in history as “Diesel-gate,” Volkswagen had to recall around 480,000 vehicles and pay out more than $30 billion in fines and penalties.
In recent years, Volkswagen's new sustainability council has guided the company towards a decarbonisation and electric vehicle strategy that is starting to bear fruit, while Diesel-gate seems to be fading, little by little, from the rearview mirror.
5) Lehman Brothers The collapse of Lehman Brothers has gone down in history as the symbol of the financial crisis of the late 2000s.
The financial services company had existed for more than 150 years, but its repeated use of accounting tricks was exposed by the subprime mortgage crisis and the bank was forced to declare bankruptcy.
The failure of what was then the fourth largest investment bank in the United States had serious consequences for the world economy.
6) Wells Fargo This US mega-bank can't seem to stay out of trouble.
On May 16, 2023, Wells Fargo agreed to pay $1 billion to settle a class action lawsuit accusing it of defrauding investors about the bank's progress since a 2016 fake account scandal.
In 2016, Consumer Financial Protection Bureau imposed a fine of 100 million dollars on Wells Fargo, while the SEC imposed a fine of 3 billion dollars.
Officials said overworked Wells Fargo employees had been incentivized to open about 2 million fake accounts in customers' names.
The move was ultimately blamed on senior management and boosted short-term bank profits.
However, in the long term, it damaged the company's brand and drove away customers.
In March 2023, Wells Fargo's former head of retail and small business lending, Carrie Tolstedt, the only executive to face criminal charges in the scandal, pleaded guilty to obstruction charges.
On Sept.
15, he received three years' probation and a $100,000 fine, with no prison time.
Wells Fargo was also ordered to pay $3.7 billion in December 2022 due to “illegal activities” involving the mismanagement of 16 million customer accounts.
According to the CFPB, Wells Fargo “repeatedly misapplied loan payments, wrongfully foreclosed on homes and illegally repossessed vehicles, misassessed fees and interest, and charged surprise overdraft fees.” 7) Bernie Madoff Former New York City fund manager Bernie Madoff died in prison in April 2021 at the age of 82.
But his story was put in the spotlight in 2023 with the Netflix documentary «Madoff: The Monster of Wall Street», which tells his story as the mastermind behind the largest Ponzi scheme that ever existed.
Madoff, a former Nasdaq chairman with close ties to U.S.
government regulators, was a legend on Wall Street in the 1980s and 1990s.
His company, Bernard L.
Madoff Investment Securities LLC, was the sixth-largest market maker of stocks in the S&P 500.
Yet, over the course of 17 years, Madoff, assisted by company managers and back office personnel, managed a huge Ponzi scheme that promised investors astonishing returns.
Instead, Madoff and his team pretended to place trades on the market and set up fake brokerage accounts, pocketing the investment money.
In 2008, at the height of the Great Recession, Madoff's fortune ran out and a run on deposits and subsequent investigation revealed that his company had stolen more than $19 billion from 40,000 investors.
Madoff was arrested, charged with 11 counts of fraud, found guilty and sentenced to 150 years in prison in June 2009.
8) Ivan Boesky The 1980s were prolific in financial fraud.
Ivan Boesky was one of the first Wall Street traders to go to prison on insider trading charges.
Boesky honed his craft as a trader in the early 1980s, specializing in lucrative arbitrage opportunities.
Nicknamed “Ivan the Terrible,” Boesky made more than $200 million investing in corporate takeovers and mergers.
In 1985, the SEC charged Boesky with illegally profiting from insider trading, accusing him of acquiring company stocks and futures based on tips from insiders.
A year later Boesky was found guilty and, under a plea deal that required the man to record phone calls with other insider trading regulars, including junk bond kingpin Michael Milken, Ivan the Terrible was sentenced to three years and half of prison.
He was also fined $100 million and ordered never to work in the industry again.
Boesky is said to have inspired some traits of the film character Gordon Gekko, played by actor Michael Douglas in the 1987 film "Wall Street".
9) Enron Another major case of financial fraud is that of Enron, nicknamed "the most innovative company in America" by Fortune magazine every year from 1996 to 2001.
Founded in 1985, the former dot-com supernova made made its fortune trading natural gas and other commodities, and even launched its own digital commodities trading platform in 1999.
In August 2000, Enron stock hit an all-time high of $90, but just a year later, Sherron Watkins, an Enron finance executive, warned CEO Ken Lay that a huge accounting scandal was about to erupt that could bring down the company.
the entire company.
During the SEC investigation, Enron admitted in November 2001 that it had overstated profits by nearly $600 million.
Within about two months, the company filed for bankruptcy and the Justice Department launched a criminal investigation.
Before announcing bankruptcy, Enron cut 4,000 jobs and many former employees saw their pension plans dried up.
One result of the Enron saga was the passage of the Sarbanes-Oxley Act of 2002, which established stricter accounting rules for publicly traded companies.
10) Banco Ambrosiano Unfortunately, an all-Italian case cannot be missing from Money.it's ranking of the 10 biggest financial scams in history.
Let's talk about the collapse of Banco Ambrosiano in 1982.
Banco Ambrosiano was one of the most important private banks in Italy, with deep and extensive international connections, including to the Vatican through the Institute for Works of Religion (IOR).
The crisis erupted with the bankruptcy of the bank due to debts of approximately 1,400 billion Italian lire (an enormous amount for the time), causing a major financial scandal that had repercussions throughout the Italian and international banking system.
The central element was the discovery of huge holes in the bank's balance sheets, due to unsecured loans made through offshore companies, often linked to high-profile figures and institutions, including the IOR.
The president of the bank, Roberto Calvi, nicknamed "God's banker" for his close connections with the Vatican, was found dead in London under the Blackfriars Bridge (in Italian, the Black Friars Bridge) in mysterious circumstances a few days after the bank failure, an event that added a further layer of mystery and intrigue to the case.
His death was initially treated as suicide, but later the possibility of murder was raised.
The scandal involved numerous other individuals and institutions, including Michele Sindona, another banker with ties to the Mafia and the Vatican, who was convicted of manipulating the stock market and causing the failure of another Italian bank, Banca Privata Finanziaria.
The investigations and trials that followed the collapse of Banco Ambrosiano revealed a complex network of financial fraud, money laundering and corruption involving high-level figures in the financial, political and religious world.
Despite investigative efforts, many questions about the collapse of Banco Ambrosiano and the death of Roberto Calvi remain unanswered and the entire scandal has become one of the darkest and most complex chapters in Italian financial history.