In business, most people are in it for all of the right reasons. Innovators, entrepreneurs and inspiring thinkers make the headlines everyday for the positive steps forward they make in the world of business. There are some people, however, who aren’t quite so trustworthy. Using business scams as a means to an end, some people in history have fronted some of the most notorious schemes and in the process, have got away with a whole lot of trouble. It’s undeniable that where there’s business, there’s money to be made and for these people, making a professional mark is all about how much can be gained at the end of it all.
See Also: 10 Most Horrifying Scams
While business scams are in no way to be condoned or celebrated, they can teach us that interesting things are the way that the professional world works. By working in retrospect, our top companies can adjust their approaches and methods, to ensure that future scams don’t take place. The more that the scammers operate, the more we are able to understand their ways of thinking and by probing further some of the world’s most notorious underhand schemes, we might be able to banish them once and for all.
Unsurprisingly, one of the most common types of business scam is fraud and embezzlement and despite pushes in the law to solve this problem, schemes pop up every year, in every kind of business. The United States’ largest operator of inpatient rehabilitation services, HealthSouth, was the site of one of the most notorious embezzlement schemes in the world in the early 2000s. The company’s CEO, Richard Scrushy, was found to be responsible for directly creating fictitious transactions and accounts to bolster the company’s accounts. Between 1996 and 2003, the company embezzled a figure of $1.4 billion, which, unsurprisingly, came to official attention in the mid-2000s.
Before it ceased trading, Enron was one of the biggest American energy, commodities and services companies running. In 2001, however, the company suddenly went bankrupt following an outpouring of fraud claims and money issues emanating from the business. Enron was accused of wiping out a massive $78 billion from its stock market value as a result of accounting fraud. Unsurprisingly, the company never sprung back from its charges, and following a settlement of $7.185 billion and a 24 year prison sentence for former president Jeff Skilling, Enron shut down for good.
Once upon a time, Lance Armstrong was a beacon of health and hope across the world, proving to people everywhere that just because fate dealt you a bad card, it didn’t mean that you couldn’t make things right. Things recently, however, have not been so good for the former cycling champion and as well as being revealed to have been involved in years of drug doping, Armstrong suffered a huge blow to his Livestrong corporation. After allegations of cheating turned out to be true, Armstrong’s value decreased dramatically, and he faces the very real possibility of losing all of his sponsorship and business deals. The Livestrong brand has fallen so low, in fact, that he might also be required to sell back his company shares, and lose everything that he previously owned.
4. Bernard Madoff
Sometimes, it’s the work of one individual that causes the downfall of a business empire. Bernard Madoff was once one of the most successful New York money managers but once his eyes got too big for his stomach, things took a downward turn. In 2008, Madoff was accused and convicted of arranging a $65 billion Ponzi scheme, the largest ever attributed to a single person. The crime was so huge, in fact, that Madoff is currently in the process of serving a 150 year life sentence for his actions, and he will never see the light of day again.
5. Lehman Brothers
An investor’s worst nightmare, bigtime investment bank Lehman Brothers was shut in 2008 following a massive bankruptcy. Despite seeming to come out of nowhere, the company’s sudden demise was later suggested to be at the hands of its top executives and auditor Ernst & Young. Claiming to have a total of $600 billion in assets, the bank’s downfall was one of the worst in history, and has still not been fully explained.
6. HIH Insurance
One of the most scandalous business scams to have hit Australia, the corporate downfall of insurance firm HIH Insurance hit professionals and insiders like a tonne of bricks. Incurring losses of $5.3 billion, the company was soon liquidated in 2001 and disbanded altogether. Its director, Rodney Adler, was largely believed to be culpable for the company’s collapse and as a result, was sentenced for four and a half years in prison. Accused of obtaining money by misleading statements and working against the company’s best interests, Adler was royally dethroned, and it is unlikely that he will re-enter the business community any time soon.
7. Martha Stewart
For a long time, Martha Stewart was the epitome of clean, wholesome living but in 2002, her public image was very suddenly besmirched. A hugely successful business woman, Stewart was owner of one of the biggest and most successful empires in the world, and was only set to do great things in the future. In 2002, however, things changed when she became embroiled in the ImClone insider trading affair. Indicted of nine counts of fraud and the obstruction of justice, Stewart was soon arrested and subsequently imprisoned for her behaviour. Amazingly, she regained possession of her company in 2012 and is well on the road to recovery.
8. Deutsche Bank
Business scams aren’t all about embezzlement, however, and German bank Deutsche Bank was discovered to be involved in something altogether more insidious. The banking and financial services firm was discovered to be spying on its board members and even some of its investors. Things only got worse for the company, however, and in 2006, Deutsche Bank hired an external detective agency to probe relations between board members and media magnates. The bank’s paranoia caused the German government to issue a change in the law and offer workers privacy protection from their bosses.
Telecom agency WorldCom was involved in a number of business scandals of its own, after it was involved in a fraud and subsequent bankruptcy debacle. Convicted of massive fraud in 2002, the company was revealed to have been involved in less than legal activity and as a result, saw its $103.9 billion assets wiped out completely. The former CEO is currently serving a 25 year federal prison sentence, on grounds of fraud and embezzlement.
A pinnacle in German motor design, Volkswagen has suffered a number of scandals over the years at the hands of some of its employees. Most notoriously, its personnel manager Klaus-Joachim Gebauer was involved in a huge uproar in which he hired a number of prostitute services for the firm’s representatives under the guise of company business. Unsurprisingly, Gebauer’s underhand activity came under the intense scrutiny of the world media and as a result of a court case, he was convicted and jailed.
Business scams go on under our noses every single day and despite the very serious consequences that they might face, many company heads see no issue with taking their chances. Looking back at some of the most notorious cases over recent years, industry insiders can watch out for potentially underhand activity and over time, battle attempts to create business scams entirely.