Top 10 Most Deplorable Fraud Cases in Modern US History

TT10 April 24, 2012 Comments Off


Fraud is deplorable. Always. And while the relative “deplorability” of one fraud case compared with another may seem somewhat arbitrary or even subjective, there was a method to the compilation of the following list. That method had less to do with how much money was involved – although the amount of money is important – as it did with the variety of victims the said fraud actually affected.

The first five have little to do with one another, but numbers 6 through 10 are all Ponzi schemes.

So, without further adieu, here’s a list of the most deplorable fraud cases in recent memory. The further you read, the more your blood will start to boil – guaranteed.

10. Medicare Fraud

Dr. Jacques Roy Courtroom Sketch

Just this year, federal officials announced what may turn out to be the largest healthcare fraud case in US history – a Dallas-area physician who swindled Medicare out of close to $400 million.

It seems that Dr. Jacques Roy, a Texas physician, sent healthcare “recruiters” door-to-door asking people to sign forms. What the signers didn’t know, however, was that they were signing off on papers stating that Dr. Roy had performed medical services on their behalf – even though he hadn’t.

The scheme made Dr. Roy rich. It also made his practice the single largest collector of Medicare payments in the country before he was caught.

9. Identity Fraud

Last year, a total of 111 people were arrested for identity theft, forgery, robbery, and other crimes in New York City. Operating out of Queens, the crime ring recruited service industry workers to steal customers’ personal information and relay it to syndicates in Europe, Africa, and the Middle East.

Police are calling it the largest identity fraud case in US history. The accused allegedly used stolen personal information to acquire new credit cards, which they in turn used to purchase Apple products.

8. Goldman Sachs

Goldman Sachs Tower, at 30 Hudson Street, in Jersey City.

Goldman Sachs Tower, at 30 Hudson Street, in Jersey City.

via Wikipedia

This one makes the list not just because it ended with the third largest settlement in SEC history, but also because Goldman’s misdeeds played a huge role in the collapse of the US economy in 2008. In its $550 million settlement, the Wall Street firm admitted its failure to inform investors about the inherent risks of buying subprime mortgages.

If you’ve been unemployed at all since the downturn, many would say that Goldman is partly to blame for your misfortune.

7. Yasuyoshi Kato

When he started writing checks to himself from the accounts of Day-Lee Foods, a company in California, Yasuyoshi Kato probably didn’t know he would soon be the culprit in the nation’s largest felony embezzlement case ever.

Yet he ultimately did acquire that dubious distinction, and it came after years of enjoying luxury homes, expensive sports cars, and a house full of exotic animals. When he pleaded guilty at the age of 39, Kato had embezzled around $90 million.

6. Enron

Enron Corporation

Enron Corporation

via Wikipedia

Remember this one? If Enron was part of your portfolio on 2001, you’ll never forget it. Through accounting malfeasance, special purpose entities, and intentionally shoddy financial reporting, Enron managed to swindle countless investors out of millions of dollars. It looks like going from completely unknown to the nation’s 7th largest company in less than 20 years really was too good to be true.

5. Charles Ponzi

Mug shot of Charles Ponzi (March 3, 1882 – Jan...

Mug shot of Charles Ponzi 

via Wikipedia

For the first true Ponzi scheme on the list, why not start with the swindle’s namesake? In the 1920s, Ponzi became a millionaire in less than a year when he promised investors a whopping 50% return on investments in international postal coupons. When the jig was up, investors only got back around $5 million of the original $15 million Ponzi took from them.

4. Michael Eugene Kelly

While he didn’t cheat anyone out of nearly as much money as our top 3 fraudsters, Michael Eugene Kelly makes the list specifically because he targeted retirees and senior citizens.

Through offers of investments in timeshares at Cancún hotels, Kelly used over $400 million of retirees’ savings to buy a private jet, some yachts, and his own racetrack. Over a quarter of the funds he swindled came directly from investors’ IRA accounts. Pretty deplorable.

3. Tom Petters

Now serving a 50 year prison sentence, Tom Petters was an equal-opportunity swindler. He cheated hedge funds, retirees, pastors, and missionaries alike. Just about anyone, it seems, was in Petters’ “target market” assuming he or she had the funds to “invest.”

The total amount on his cheat rap? $3.7 billion. Not quite enough to put Petters in second place, but a daunting figure nonetheless.

2. Allen Stanford

After FBI raids of his offices in Houston, Memphis, and Tupelo in 2009, Allen Stanford was charged with fraud and multiple violations of US securities laws for carrying out an enormous, $8 billion Ponzi scheme. On March 6, 2012, he was convicted on nearly all the fraud allegations.

1. Bernard Madoff

Bernard Madoff

Bernard Madoff

via Wikipedia

The perpetrator in the largest Ponzi scheme ever concocted, Bernard Madoff defrauded investors out of a staggering $50 billion over a period of close to two decades. He’s currently serving a 150-year prison sentence for his crimes.

Madoff bilked celebrities, funds, banks, and nonprofit organizations. His fraud case made global headlines and became an enormous national outrage.

Adam Green is a freelance writer and enterprise fraud detection advocate.

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