Unique methods in fraud perpetration

When we look at some of the very serious frauds that had taken place in the financial realm, it is evident that the perpetrators are somewhat ingenious:

- mohan

Financial wizards often say there are no small frauds, and it may be that some frauds have not touched their maximum potential. They also point out that most of the so-called professional fraudsters are first-time criminals as an estimated 87% of the fraudsters detected have not been convicted on any fraudrelated offences. When frauds in the financial services sector is discussed there are some all-time record fraud instances that attract attention. Those topping this list are (not in order of the extent of the fraud or in terms of dates of execution):

1. American Insurance Group (AIG) has been accused of perpetrating an accounting fraud totaling $3.9 billion, and attempting to manipulate stock price. It settled the case with the Securities Exchange Commission (EC) for a combined $1.74 billion, along with several pension funds. Its CEO Hank Greenberg lost his job but he did not face any criminal action because of the terms of the agreement with SEC. The modus operandi was to book loans as revenue, moving clients to insurers with whom AIG had payoff agreements.

2. Lehman Brothers was steered into bankruptcy because it concealed more than $50 billion in loans as sales proceeds. The firm is charged with selling toxic assets to Cayman Island banks, giving false guarantees that these would be bought back in time. No penal action could be initiated against the firm for want of evidence.