For over three decades Sonn Law Group has dedicated our practice to helping victims of financial fraud hold wrongdoers accountable, and recoup their losses.
We’ve achieved multi-million dollar settlements for victims involved in some of the most egregious cases of financial wrongdoing over the past 50 years.
Needless to say, we’ve seen it all when it comes to financial fraud. In this post, we’ll look at examples of the most notable financial fraud cases in US history, examples of fraud cases that have been in the news recently, and a handful of examples of Ponzi schemes, which are among the most common style of financial fraud.
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5 of the Most Famous Financial Fraud Cases in History
There have been many famous financial fraud cases in US history, but some of the most notable ones include the following:
Enron: Enron was a large energy company that was based in Houston, Texas. In 2001, it was revealed that the company had engaged in widespread accounting fraud and had inflated its profits and assets in order to mislead investors and boost its stock price. The scandal caused the company to go bankrupt and led to the conviction of several of its top executives.
Bernie Madoff was a former chairman of the NASDAQ stock exchange who ran a massive Ponzi scheme that defrauded thousands of investors out of billions of dollars. Madoff was arrested in 2008 and was later sentenced to 150 years in prison.
WorldCom was a telecommunications company that was based in Mississippi. In 2002, it was revealed that the company had engaged in accounting fraud in order to inflate its profits and mislead investors. The scandal caused the company to go bankrupt and led to the conviction of several of its top executives.
Lehman Brothers was a large investment bank that filed for bankruptcy in 2008 during the global financial crisis. The bank had been heavily invested in subprime mortgages and other risky assets, and its failure was a major contributor to the financial crisis.
Tyco was a large conglomerate that was based in New York. In 2002, it was revealed that the company’s CEO and CFO had engaged in widespread accounting fraud in order to inflate the company’s profits and stock price. The scandal led to the conviction of both executives and the restructuring of the company.
4 Financial Fraud Cases in the News in Recent Years
There have been many financial fraud cases that have made the news in recent years. Some examples include the following:
Wirecard was a German payment processing company that was once worth billions of dollars. In 2020, it was revealed that the company had been involved in a massive accounting fraud that had inflated its profits and assets. The scandal led to the company’s bankruptcy and the arrest of its CEO.
Theranos was a healthcare technology company that claimed to have developed a revolutionary blood-testing technology. In 2018, it was revealed that the company’s technology did not work as advertised and that the company had engaged in widespread fraud. The company’s founder and CEO, Elizabeth Holmes, was indicted on criminal charges and the company was shut down.
Martin Shkreli was the CEO of a pharmaceutical company called Turing Pharmaceuticals. In 2015, he became infamous for raising the price of an HIV medication by more than 5,000 percent. In 2017, he was convicted of securities fraud and sentenced to prison.
Scott Tucker was a professional race car driver who owned several payday lending companies. In 2016, he was convicted of using his companies to engage in predatory lending practices and was sentenced to prison.
5 Examples of Famous Ponzi Schemes
Ponzi schemes are a type of financial fraud in which the perpetrators promise high returns to investors but instead use new investor funds to pay off earlier investors, creating the appearance of profits. Ponzi schemes often collapse when the perpetrators are unable to attract new investors and are unable to pay off existing investors.
RELATED: How a Ponzi Scheme Lawyer Can Help Victims Recover Investment Losses
Some examples of Ponzi schemes that have made the news in recent years include the following:
Allen Stanford was the chairman of Stanford Financial Group, a company that was involved in a massive Ponzi scheme. In 2009, Stanford was charged with fraud and later sentenced to 110 years in prison.
Tom Petters was the CEO of a company called Petters Group Worldwide, which was involved in a massive Ponzi scheme. In 2009, Petters was convicted of fraud and sentenced to 50 years in prison.
R. Allen Stanford
R. Allen Stanford was the chairman of Stanford Financial Group, a company that was involved in a massive Ponzi scheme. In 2009, Stanford was charged with fraud and later sentenced to 110 years in prison.
Scott Rothstein was the owner of a law firm called Rothstein Rosenfeldt Adler, which was involved in a massive Ponzi scheme. In 2010, Rothstein was sentenced to 50 years in prison for his role in the scheme.
Nicholas Cosmo was the founder of Agape World, a New York-based investment firm. In 2009, it was revealed that Cosmo had been operating a Ponzi scheme that defrauded investors out of tens of millions of dollars. Cosmo was later convicted of fraud and sentenced to 25 years in prison.
Were You a Victim of Financial Fraud?
We can help. At the Sonn Law Group, our experienced financial fraud lawyers are committed to advocating for the rights of investors nationwide. If you believe that you were a victim of investment fraud, our legal team can help. Please contact our office today to get a free, no strings attached review of your case.