6 Biggest US Business Scams of All Time

#6 Cendant – $19 Billion Accounting Fraud

The Chairman Walter Forbes was sentenced to 13 years in prison and ordered to pay $3 billion in restitution after the massive decade long accounting fraud was brought to light.

Coming up on the next pages, the other 6 biggest blunders of all time!

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#5 Bernard Madoff – $65 Billion Ponzi Scheme

New York financial manager forged financial documents to represent massive growth of clients accounts and paid out returns from new investor funds. There was no growth, only a massive scam that counted on continual new accounts to avoid detection. When the economy started to crumble and money became tighter, it was much harder to cover his tracks. Madoff acted alone unbeknownst to his 2 sons and when he confessed to them, they turned him in. He was tired of all the lies. Sadly one of his sons ended up committing suicide, and the other came down with cancer and died shortly after the scam broke. The fraud is chronicled in HBO’s fascinating documentary, The Wizard of Lies.

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#4 Enron – $78 Billion Accounting Fraud

Massive accounting fraud at energy company Enron was eventually brought to light which wiped out $78 Billion in stock market capitalization almost instantly. The President is serving a 24 year prison sentence, but the former CEO quit just months before everything hit the fan and left Enron with almost $300 Million. He was the 2nd largest landowner in Colorado after purchasing a 77,500 acre ranch, but later sold the property for a $37 Million profit. The Enron Scandal is the basis for the documentary, Enron, The Smartest Guys in the Room.

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#3 WorldCom – $104 Billion Bankruptcy Fraud

A $6.1 billion class action lawsuit payout for WorldCom victims is one of the largest ever. Former CEO Bernard Ebbers was convicted of fraud and is currently serving a 25 year prison sentence.

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#2 Lehman Brothers – $600 Billion Bankruptcy Fraud

The single largest bankruptcy in history was the spark that setoff the most recent worldwide financial crisis. The bankruptcy examiner’s report concluded there was credible claims against top Lehman executives and its auditor Ernst & Young; however, the SEC and DOJ never filed any charges.

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#1 Fannie Mae – High Risk Mortgage Scandal

Top executives at Fannie Mae were charged with securities fraud for covering up just how many high risk mortgage loans they had that were largely responsible for the financial melt down. Fannie Mae paid the SEC $400 million to settle charges and the government took over the company in 2008. Fannie Mae takes the cake as the biggest US business scam of all time because if any one company could be blamed for the financial crisis, it would be Fannie Mae. The fact is, the bad practices Fannie Mae was doing, most others in the industry were doing also, and the financial meltdown is much more complex than we can blame on a single company. You can catch an interesting look at the meltdown in the HBO documentary, Too Big To Fail.

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