The Cost of Fraud

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For decades acts of fraud never got the media exposure that other crimes have. Gang violence, robbery, murder and drug seizures have always captured headlines. One of the factors being the perception that fraud was often seen as a victimless crime e.g. the losses from credit card fraud is guaranteed by the banks.

No violence, no bloodshed, no story. “If it leads, it bleeds”.

Of course, nothing is further from the truth. The reality is all fraud affects us all.

Definition of fraud: “wrongful or criminal deception
intended to result in financial or personal gain.”

According to the Certified Fraud Examiners 2016 Report to the Nations on Occupational Fraud and Abuse.

Their analysis of 2,410 occupational fraud cases resulted in a total loss of more than $6.3 Billion. The median loss from a single case of occupational fraud was $150,000.

This massive loss does not just get absorbed by corporations or insurance companies. It is always passed down to the consumer resulting in higher costs in products and services, higher insurance premiums, redundancies in business transactions and even business closures.

In 2008,  Bernie Madoff was arrested for the largest fraud ever committed by an individual. Fraud finally received the attention it deserved when details of the crime came to light that Madoff, a well-respected investment advisor, was running a Ponzi scheme since the 1970’s and somehow managed to defraud thousands of investors of a staggering $65 billion.

The public began to realize that wolves come dressed in sheep’s clothing.

Immediately following the Madoff arrest fraud grabbed headlines for weeks and months, companies started implementing anti-fraud checks and balances to minimize the risk of their company falling victim.

Unfortunately, over time fraud headlines took the backseat again and will only raise its ugly head when the markets take another downturn forcing fraudsters out of the shadows and into the light once again.

 

Below is a list of investment fraud resources.

Affinity Fraud
Advance Fee Fraud
Binary Options Fraud
Boiler Rooms
Forex Scam
High Yield Investment Programs
Internet and Social Media Fraud
Offshore Investment Scam
Microcap Fraud
Ponzi Scheme
Pre-IPO Investment Scams
Pyramid Schemes
“Prime Bank” Investments
Promissory Notes
Pump and Dump Schemes
Commodity Pool Fraud
Foreign Currency Trading Fraud
Precious Metals Fraud

Protecting your money: Avoiding frauds and scams
Know the Red Flags of Fraud


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PONZI

The term Ponzi Scheme was brought to the forefront in 2009 when Bernie Madoff admitted to committing the largest fraud in U.S. history and sentence to 150 years in prison for stealing $65 billion from thousands of investors. The Ponzi Scheme is named after a con artist who lived in the early 20th century. Although the Ponzi scheme carries his name…