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In recent years, with the increasing number of people working and spending more time online, many scammers have started making money by preying on people over the internet. However, many of the biggest scams in history were carried out long before the internet revolution. Here are ten of the most famous scams ever. They are not listed in a specific order.
1. The Pfizer Scam
Pfizer received the biggest criminal fine in the history of the United States in 2009 for misbranding the painkiller Bextra and mispromoting this drug. The company put people at risk as the drug was not approved by regulators for the purposes Pfizer promoted it. The lawsuit brought against the pharma giant amounted to $2.3 billion. Bextra was not the only drug involved in the case. Other examples included Geodon, Zyvox, and Lycra.
2. The Ponzi Scheme
This is one of the most successful scams in history if we judge it by the profits it generated – $225 million in today’s economy and around $20 million back in 1920 when the famous con man Charles Ponzi committed fraud. Ponzi posed as an investor who promised people a get-rich-quick scheme. He told them he could help them achieve returns of 50% in approximately 45 days. Ponzi set up a pyramid scheme, one that managed to stay afloat for several years.
3. The Bernie Madoff Ponzi Scheme
Bernie Madoff remains in history as one of the biggest con men. He is the author of the biggest pyramid scheme in the history of the U.S. Through his Ponzi-style scheme, Madoff managed to get more than $65 million from investors, as well as different non-profit organizations. The scheme was carried out for approximately two decades, until 2008 when some of the investors started claiming their money back.
4. Barry Minkow and ZZZZ Best
Barry Minkow was only 21 years old back in 1988 when he was charged with fraud, racketeering, and money laundering. He was part of a larger group that ran ZZZZ Best, an industrial rug cleaning company. Theoretically, in documents, the company’s stock value was as high as $200 million. However, in reality, the company didn’t exist as it was only funded by credit card theft.
5. Frank Abagnale
Frank Abagnale became a professional scammer at only 16. He was an impersonator who posed as a doctor and professor. He managed to make more than $2.5 million before the age of 21, using different cunning schemes to commit money scams.
6. The Eiffel Tower Scam
Victor Lustig managed to create fake documents that attested he was entitled to sell the Eiffel Tower as scrap metal. He was able to do this after discovering that the tower needed some repair works. The con man practically managed to sell the Eiffel tower in 1925 and flee abroad.
7. Enron Bankruptcy
Enron is one of the biggest bankruptcy cases in history and the most renowned in America. This elaborate corporate scam took place in 2001 when the company filed for bankruptcy based on allegations of accounting fraud. This made the company’s shares drastically decrease. 78 billion of stock market value vanished, which meant huge losses for shareholders. Moreover, when the company filed for bankruptcy, more than 20,000 people lost their jobs. The Enron scandal was concluded with a sentence of 24 years for Jeff Skilling, its president, and a $7.185 billion class-action settlement.
8. The James Paul Lewis Jr. Scam
James Paul Lewis Jr. was the head of the Financial Advisory Consultants in Orange County. He lured people into an investment strategy he claimed would help them get a return of 18 to 40% in approximately a year. Investors’ money should have been used in insurance premiums, commercial loans, and other investment strategies, however, Lewis used it to buy himself luxury goods. He managed to earn $50 million.
9. Bernard Ebbers Scandal
Ebbers was the CEO of ‘WorldCom’, a famous US long-distance telecommunications company. He basically stole from his own company by letting it incur debts through different purchases. All the while, he kept the company’s operations in a normal range and avoided expanding the business. He was caught by his employees and thanks to an audit. His fraud amounted to nearly $4 billion.
10. The Baker Property Fraud
This scam revolved around Jacob Baker, a man who died in 1839, leaving behind a property that worth $3 billion. His inheritors created an association that targeted people with the surname Baker and asked them for a small fee to help return the estate of Colonel Jacob baker. People received nothing in return, but the authors earned over $25 million by 1936.
As new frauds and scams are periodically brought to light, we will probably continue to encounter plenty of new cases that will make history.
Written by Stratford Management Japan