Do you know the difference between a fraud and a scam? Many believe they are the same thing, as they both cause harm to innocent people. A scam is usually a scheme or transaction costing a victim to lose money or assets. Examples are asking for money for a charity that doesn’t exist, or tries to sell something that don’t belong to them. People who do these type of scams are referred to as Scammers. Fraud on the other hand is more of a deception. Fraud is when someone’s trust or confidence is breached. People who commit frauds do it for money, to discredit others with lies, or to gain prestige, these people are known as fraudsters. Fraud is considered a serious crime where a scam is considered minor in comparison. An example of a fraud is to create a scheme to take someone’s life savings.
Some of the biggest scams were, The Mona Lisa; this is where a man paid a thief to steal the Mona Lisa; then sold copies of the painting. With the painting missing the buyers thought they were getting the real painting. Since they couldn’t tell anybody they bought the painting this scam worked well for Argentinean, Eduardo de Valfierno who paid to have the masterpiece stolen. The selling of New York Landmarks; George Parker convinced tourist that they could buy famous landmarks such as Madison Square Garden, the Statue of Liberty, and the Brooklyn Bridge; Parker was eventually caught and sentenced to life in Sing Sing Prison. The selling of the Eiffel Tower; it was well-known that France was having difficulties keeping up the maintenance on the Eiffel Tower, Victor Lustig convinced a scrap dealer he could buy it; the dealer gave him a huge down payment. When the Dealer found out he had been scammed, he was too embarrassed to turn the scam into...
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...he same. Anybody that would play on the weak and vulnerable and destroy lives fall into the same class of evil and unethical predators.
Works Cited
"#2: Bernard Madoff - In Photos: The 10 Biggest Frauds In Recent U.S. History." Forbes. N.p., n.d. Web. 2 Mar. 2014.
"'Nigerian 419' scams." SCAMwatch home. N.p., n.d. Web. 2 Mar. 2014.
"10 Greatest Imposters in History (Con Artists, Impostors) - ODDEE." Oddee. N.p., n.d. Web. 2 Mar. 2014.
"10 Ways to Avoid Fraud Consumer Information." N.p., Web. 2 Mar. 2014.
"7 of the Greatest Scams Ever | LiveScience." LiveScience.com. N.p., n.d. Web. 2 Mar. 2014.
"Log In - The New York Times." The New York Times - Breaking News, World News & Multimedia. N.p., n.d. Web. 2 Mar. 2014
"FBI — Common Fraud Schemes." FBI. N.p., n.d. Web. 2 Mar. 2014.
"Tax Scams/Consumer Alerts." Internal Revenue Service. N.p., n.d. Web. 2 Mar. 2014.
“Bernie Madoff began investing in penny stocks in 1960, and due to his impressive work ethic, received several big breaks. The first of which was his father in-law loaning him $50,000 to invest, and soon after, Carl Shapiro, a man who made his fortune in women’s clothing gave Madoff $100,000 to invest on his behalf” (Collins 2011). With this kick-start, Bernie quickly began making a name for him, especially as he promised clients a guaranteed 20% annual return on investment. This, coupled with his firm’s adoption of the latest technology made them a tour-de-force in the investment world. But what makes his eventual downfall more interesting is that he was not just a crook, Madoff did manage a successful, and legitimate brokerage firm. To some extent, the credibility he earned from these legitimate busines...
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.
A fraud is a wrong action, which is basically deprivation of the legal rights from an individual. Fraud is seen at various instances of life. There are a number of frauds that occur and every case has different rights being deprived from an individual. When frauds take place, some legal authority has to intervene and take the necessary action. The legal authority is granted with the power to decide the right that has been taken from the victim and identify the compensation to be given to the individual on behalf of the party, which has made the fraud. In this report, I will discuss some cases in which fraud caused some issues and deprivation of the basic legal rights of an individual thus resulting in
2 Blaylock, Bob and Seanette Blaylock., Pyramid Schemes, Ponzi Schemes, and Related Frauds. 1997 www.impulse.net/~thebob/pyramid.html
Bernie Madoff is one of the greatest conman in history. The Bernie Madoff scandal takes the gold as one of the top ponzi scheme in America. Madoff started the Wall Street firm, Bernard L. Madoff Investment Securities LLC, in 1960. Starting off as a penny stock trader with five thousand dollars, earned from his workings as a lifeguard and sprinkler installer, his firm began to grow with the support of his father-in-law, Saul Alpern, who helped by referred a group of close friends and family. Originally, his firm made markets by the National Quotations Bureau’s Pink Sheets. However, in order to compete with the bigger firms that were trading on the New York Stock Exchange floor, his firm started to use very intelligent computer software that help distributed their quotes in second’s rater then minutes. This software later became the NASDAQ that we know today. In December of 2008 Bernard Madoff confessed that he had embezzling billions of dollars from investors. It is estimated to have lasted nearly two decades, and stolen approximately $64.8 billion. On December 11, 2008 he was arreste...
Fraud is usually comprehended as deceptive nature calculated for advantage. And usually this kind of people might be called a fraud. According to the U.S. legal system, fraud is a particular offense with specific features. Fraud must be proved by showing that the defendant’s actions involved five separate elements: 1. A false statement of a material fact; 2. Knowledge on the part of the defendant that the statement is untrue; 3. Intent on the part of the defendant to deceive the alleged victim; 4. Justifiable reliance by the alleged victim on the statement; 5. Injury to the alleged victim as a
Bernie Madoff, “a former American stock broker, investment advisor, non-executive chairman of the NASDAQ stock market, and the admitted operator of what has been described as the largest Ponzi scheme in the history of the world”. (Bernard Madoff, 2011, para. 1) Bernie was able to convince investors to give him large sums of money with the promise that they would received between eight percent to twelve percent return a year. Bernie ran a pyramid scheme where Bernie kept the large sums of money for himself, and then he used the new investors funds to pay off the o...
Hanson, J. R. (n.d.). Fraud or confusion - or a snub? RDH Magazine, 19(4). pp. 113-117.
Con artists are everywhere. They seem to sense when other are vulnerable, such as older people. Our elderly come from a time when people believed others. They truth their neighbors and friends. If they say they will do something, they mean they will do it. Our elderly are simply too trusting. It is hard for them to look another person in the eye and lie. It is hard for them to take something that does not belong to them. Unfortunately, the con artist does not have a problem with either lying to people or stealing from them. He has his chosen profession down to the art he has practiced. He is good at what he does because he works at being good at it. The con artist is an actor. He should win an Oscar for his performances. He is able to change personalities like a chameleon changes colors. The con artist can be anything he needs to be for whatever “job” he is working on at the time. He usually is a very likable person who is able to blend in with others on any occasion or any given situation. Sadly, if these swindlers had chosen to work an honest job, they probably would have been very good at what they did. It requires more planning and convincing to rip people off than it takes to work at a legitimate career.
Unattributed, (2009, April 187). Combat Fraud of Almost $1 Trillion, Retrieved March 03, 2014 from Internet site http://ethicaladvocate.blogspot.com/
Fraud in charitable organizations occurs when legitimate organizations or the individuals working for the organization misuse donations, or when illegitimate organizations or individuals collect donations on behalf of a sham organization. Perpetrators of charity fraud prey on the generosity of their donors through a variety of means. Some individuals may try to get the attention of a passerby on the street requesting cash for the hungry or disabled while others may use telemarketing scams in which the perpetrator tries to convince the potential donor of their legitimacy and the immediacy of financial need for a worthy cause. Yet, the most u...
A Ponzi scheme is an investment fraud that involves the payment of returns to previous investors from funds paid by new investors.With little or no legal earnings, Ponzi schemes require a consistent flow of money from new investors to operate. Ponzi schemes tend to collapse when the operator is unable to recruit new investors ,when a large number of investors ask to cash out or if the operator disappears.These types of financial fraud have had a tremendous affect on the accounting profession, in the form of forensic accounting.
Zero in on a 45 year-old mother of 13. A man comes to her with a proposal. Invest in his company, and he can guarantee 100%, 200%, possibly even 300% returns on what she gives in mere months. For her this means taking out a second mortgage on her house; the same house she hopes to pay off entirely with the promised large return on her investment. Two years later, the windows of the house are boarded up and the woman recounts to reporters the chilling details behind the reason her family has no place to spend Thanksgiving this year. Her money is gone, along with her hopes of ever retiring from the two jobs she works. Stories like this are heard all too often from victims of white-collar crime. “Lying, cheating, and stealing. That’s white-collar crime in a nutshell. The term- reportedly coined in 1939- is now synonymous with the full range of frauds committed by business and government professionals” (FBI, n.d.). White-collar criminals are not holding a gun to anyone’s back demanding wallets and valuables. Instead, they gain the trust of those they prey on. Worse, they use their status in society to build comfort in their victims’ minds. A few of the best-known schemes in U.S. history are Enron, WorldCom, and the massive Bernie Madoff Ponzi scheme. These three cases alone amount to losses upwards of 70 billion dollars. The victims in each case are the same, American citizens. White-collar crime in America is insufficiently controlled due to weak laws, a broad pool of victims, and the enormous power scale of those involved.
Fraud is defined as someone try to act with intention to cheat other people in order to acquire an unfair or illegal advantage. The fraud happens due to management override the internal control of the organisation and fraud will affect the financial reporting. The main categories of fraud that can affect financial reporting are fraudulent financial reporting and misappropriation of assets.
Smith, Aaron, “Five things you didn't know about Bernie Madoff's epic scam” (December 11, 2013) http://money.cnn.com/2013/12/10/news/companies/bernard-madoff-ponzi/ (March 31, 2014)