Allen Stanford, a financer from the state of Texas, was sentenced to 110 years in prison in June of 2012 after being convicted of running a $7 billion Ponzi scheme, in which the money he stole from his clients was used to live a prodigal lifestyle in the Caribbean. Stanford defrauded more than 30,000 investors living in various countries. U.S. District Judge David Hittner described Stanford’s crimes as being worse than the one’s committed by Bernie Madoff. Stanford was convicted of 13 charges connected to the Ponzi scheme, including fraud and “conspiracy for selling certificates of deposit from his bank in Antigua to thousands of investors in the United States and Latin America (Driver, O’Grady; Reuters). Stanford had a history of being a white …show more content…
The investigation of Allen Stanford for the crimes he had committed contained many complexities. The Securities and Exchange Commission (SEC) began investigating Stanford in 1997, yet he was not arrested until 2009. The SEC even publicly stated that it was likely Stanford was involved in a Ponzi scheme. The SEC conducted an investigation into the certificates of deposit that Stanford offered to his clients. The SEC’s Fort Worth examination found that, …” the CDs (certificates of deposit) could not have been “legitimate,” and that it was “highly unlikely” that the returns Stanford claimed to generate could have been achieved with the purported conservative investment approach” (FIN Alternatives). The major complexity in the investigation of Stanford was the SEC’s inability to get their Enforcement group in Fort Worth to investigate the assumed operations. The purpose of the Enforcement group is to monitor potential unethical or criminal activity within the companies registered with the SEC. In 1998, …show more content…
Stanford’s Ponzi scheme also caused harm, politically. Ralph Janvey’s attorney, Kevin Sadler of the Houston Law Firm “Baker Botts”, stated that the aftermath of Stanford’s operations led to a “worldwide tug of war over what was left of Stanford’s assets” (Kyger). There were many national governments involved in this fight over his assets, most notably in Antigua where Stanford International Bank was located. Antigua was hurt substantially by Stanford’s Ponzi scheme. The country is the most-tourism dependent nation in the Caribbean, generating more than 70% of economic activity (BBC). Many people in Antigua trusted Stanford because of his popularity, which led to many of them doing business with him. Because many of these people have lost their money and total assets, legal action has taken place against Antigua as its people are looking for more than $24 billion in damages. Antigua’s financial reputation has been severely impaired by Allen Stanford and has broken relationships established with the United States, both politically and
In recent years, it seems as if there is a new financial fraud being reported any given day. One could even say that fraud has become almost a much a surety as taxes. Given the opportunities and pressures, many will businesses will fall victim to human natures and suffer losses through fraudulent activities. This case study will follow one such fraud, following the crimes of Terry Scott Welch in his pursuit for happiness by indulging his passion of landscaping.
There are many crimes in America that people would consider to be major crimes. Some may say murder rape or child abuse but I think Ponzi schemes are the greatest crimes that people commit. A Ponzi scheme uses "investor money to find a productive business venture the con orders channels the proceeds from new investors to pay interest to only earlier ones"( Basu, 2014 pg.1). Ponzi schemes can come in many different shapes and sizes. Those types of disguises makes scheme hard to detect and make it hard for people to take legal actions against a company.
After 8 years the SEC finally found the scheme controlled by Madoff. In December 2008 Madoff was found guilty; however, stayed under house arrest by the until his trial in March of 2009. He was not arrested because of the 10-million-dollar payment which allowed him to stay under home surveillance until the trial. While at home, he and his wife, mailed valuables such as jewels and jewelry to family members. In March of 2009, Bernard Madoff was finally found guilty and was sentenced to 150 years in prison. On the day of his arrest, the FBI found 100 checks that totaled $173 million dollars that were made to friends, family, and
The Bernie Madoff Ponzi Scheme is a well-known case and is known as one of the biggest Ponzi scheme’s. In summary the scheme occurred for many reasons that I will some up into 3 points; A lack in competency by regulatory agencies, a lack of regulation, and finally a breach in ethics by Bernie Madoff himself. To explain further, the regulatory agencies like the lawyers and SEC are supposed to prevent schemes such as this one from happening but because they lacked the skills to correctly assess the situation, interpreting the number of tips they had received regarding scheme that had been filed, and to act on those in an efficient manner. One of the tips was made by Harry Markopolos in 2000, of who correctly predicted that Madoff was guilty of fraud. Even after this tip from Markopolos, Madoff was not arrested until 2009. Many family members were also a part of the fraud along with some non-family members such as Frank DiPascali and a team known as the 17th floor team, who helped Madoff carry out his fraud. The idea behind Madoff’s fraud was that he would produce false statements of their investments and when people wanted to pull out their investments, the money wasn’t actually there, which rightfully rose more than a few eyebrows and ultimately led to his arrest.
White collar crime is a term created by Edwin Sutherland in 1939 that refers to crimes committed by people of higher social status, companies, and the government according to the book “White-Collar Crime in a Nutshell” by Ellen Podgor and Jerold Israel. White collar crimes are usually non-violent crimes committed in order to have a financial-gain (Podgor and Israel 3). A very well known white collar crime that has even been taught in many history classes is the Watergate scandal. This is a white collar crime that was committed by government authorities. Watergate was a crime that shocked the nation.
E.). There are various costs of white-collar crime, although an accurate measurement is not easy, they are hard to asses as well as very complex. There are enormous financial losses, sometimes physical damage as a result of negligence, as well as social costs: weakened trust in a free economy, confidence loss in political organizations, and destruction of public morality. “White collar crime could also set an example of disobedience for the general public, with citizens who rarely see white-collar offenders prosecuted and sent to prison becoming cynical about the criminal justice system” (Conklin, J. E.). White-collar crime is undeniably a crime and often encompasses elaborate
Most people consider this crime to consist of CEO’s manipulating their way to making a large fortune. This of course, is true most of the time in high-profile cases. For example, in late 2001 Enron Corporation executives confessed to overstating the company’s earnings. This lead to artificially inflating what the company was worth and deceived the investors. It took some time to unravel all the fraud put behind this devious act but shows how sophisticated white-collar crime can be. Although it’s usually associated with upper management of corporations, people from all different levels and occupations can perform this crime ("How White-collar Crime Works").
Edwin H. Sutherland is credited for introducing the term in 1939 (Friedrichs, 2010), and his definition is "crime committed by a person of respectability and high social status in the course of his occupation" (Cornell University Law School, n.d.). A principle attribute of white collar
White collar crime can be a very complicated topic because of how fairly new it is. Edwin H. Sutherland helped coin the term white collar crime in December 1939, during his presidential address “The White Collar Criminal” (Friedrichs, 2010). Although white collar crimes had been happening throughout most of history, they didn’t get as much attention until more recently. Since white collar crime is still so new, all definitions have been under a lot of scrutiny. The definition that is currently most acknowledged comes from a group of criminologists that got together in a group, to come up with a definition for white collar crime and that would be accepted by the majority. This group defines white collar crimes as:
Enron and their accounting firm Anderson Accounting brought what we know as “white collar crime” to the forefront. White-collar criminals are not known to be dirty criminals, because they use their heads to get what they want from society. White collar criminals do not use their muscle; instead they use their brain for mischievous way to manipulate people. These criminals are just as dangerous as the bank robbers and murderers in my opinion. In these times, even the most trusted people are being convicted of white-collar crimes, your neighbor, the banker you have trusted for ten plus years, the closest of family friends, no one can be ruled out. White-collar crimes can differ in the sort and magnitude of the crime. There are always new scams coming out every day that society falls victim
In September 2008, Federal agents swarmed the offices of Tom Petters uncovering a billion dollar Ponzi scheme. A similar case in dimension and scale of the well-known Bernie Madoff case is Tom Petters; the mastermind of a 3.7 billion, fourteen-year long deceit, the second largest Ponzi scheme in the United States. Similarly, Robert Allen Stanford, whose scheme emerged in February 2009 and is thought to have lasted ten years, involving the enormous sum of $8 billion, as well as S. Rothstein, who admitted to managing an approximate 1.2 billion dollars Ponzi scheme at the end of 2009. According to Maglich (2014) Ponzi schemes continue to thrive and leave a trail of financial destruction. “In the first six months of 2014, at least 37 Ponzi schemes were uncovered, with a total of more than $1 billion in potential losses” asserts Maglich (2014). Even though Ponzi schemes eventually collapse, Ponzi schemes remain
One of the most recent stories involving white-collar crimes in the United States involves the Wells Fargo. Wells Fargo is banking and a financial institution that offers financial services to very many people in the United States as well as around the world. As reported by the Washington Post, Wells Fargo as banking and a financial institution was involved defrauding its customers millions of dollars through their employees. It was reported that the employees were involved in the opening of close to 2 million bank accounts with Wells Fargo and proceeded to offer credit cards towards the same as a way of attracting the huge bonuses that were being offered (Merle, 2017). The white-collar crime perpetuated by Wells Fargo falls under the Corporate
This case illustrated that there were real consequences to white collar crime. In addition to paying the fifty million dollar fine, he relinquished another fifty million dollars of his illegal trading profits. (He still had millions remaining, however, from his illegal gains.) His actual prison sentence was three years, yet he served only twenty-two months in the federal prison at Lompoc, California, which was known to have a “country-club” atmosphere.
Many times white collar criminals play a prominent role in society, especially in smaller communities, such as the college town of Penn State. Because this educational institution is so beloved by those who go there and the local community, many people cannot even see that an actual crime was committed and that not just Sandusky is guilty. This case is a white collar crime due to the fact that it was at an institutional level. While he may have committed the actual act, several people at different levels were notified, and the act covered up. This is not only a failure at this educational institution, it is a crime. Sandusky was in a position of power where he had gained the trust of his coworkers and the people around him. Therefore, he took advantage of this gained trust to commit unspeakable crimes upon those children around him. Penn State is a trusted institution; well know university that many people love and support. Jeff Anderson said, “Well, in our practice across the count...
There is a common belief within our society that white-collar criminals commit crimes and never suffer consequences for their actions. The public’s understanding of white-collar crime can often be attributed to the media’s portrayal of white-collar crimes. A basic definition of white-collar crime is “nonviolent crime committed by individuals or corporations to obtain personal or professional advantages.” White-collar crime is a part of the property crime category and it is in the subcategory of fraudulent crimes. Crimes that fall under white-collar crime include embezzlement, fraud, bribery, and insider trading. The federal government tends to prosecute most white-collar cases, therefore they can shed light on the true