United States Navy Veterans Association claimed that it was operating since 1927, was registered with the IRS, run by ex-military men, and had dozens of chapters and 66,000 members nationwide. A media investigation revealed that this charity was not in operation until 2002 and had only one member or charity official that could be located. It was run out of an individual's duplex in Florida and appeared to have consisted of one man using a fake name for whom no record of U.S. military service could be found. A man named Bobby Thompson was arrested for created this fake charity and bilk donors out of nearly $100 million over a seven-year period.
2. The donation of Constantine is a forged document supposedly written by the 4th-century emperor Constantine on his deathbed that transferred the whole western part of the Roman Empire, including Rome, to the Pope. This decree has been used for centuries by the Church to justify its authority over most of Europe and it wasn't proved wrong to be a forgery until around 1450 by the Italian humanist and priest Lorenzo Valla. The legitimacy of this document caused a lot of problems in relations both within the Church (ultimately causing the schism between west and east) and with other secular powers.
3. South Sea Company in 1711 managed to get pretty much all of England, including the royal family, investing in it using shady and illegal tactics, getting the company valued higher than the GDP of England, without actually producing any product. It collapsed and almost destroyed England's economy. When the company collapsed in 1720, it defaulted on £9 million in debts. In today's terms, that is £1,205,000,000. However, this is not a very accurate amount. In real terms, as in how much this would actually be worth in real terms of goods, as in purchasing power, this would be £23,960,000,000.
This is still not the true number either, as this date is far enough back, and so large, that it is not the same percentage of the GDP it is now. For example, if you owned $5 million, but there was only $5.5 million in the whole economy, you would have a much higher relative wealth, and that's the number that really matters in this case.
If we were to make the amount the same percentage of GDP now (with the real/purchasing parity included), that $9 million is the same as £152,700,000,000 now. This is $227,512,311,000 in US dollars. It was a Ponzi scheme on a scale never seen before or since.
4. The first ever Roman fire brigade of which we have any substantial history was created by Marcus Licinius Crassus in 2nd century B.C. He used to purchase buildings on fire for a very low price and then put the fires out with his trained army of 500 slaves and rebuild them. If the owners refused to sell their property, he would not engage in firefighting. There are records indicating that some of these fires were started by his own firefighters.
5. Germany wanted a small car close to the price of a motorcycle. When it became apparent that it wasn’t possible, the German State stepped in. Adolf Hitler sponsored a savings scheme involving German workers to pay "five marks a week" to get a car. Workers were also promised a vacation at a luxury resort, gym and club memberships, and even food perks. This plan sounded amazing to Germans who were used to hyperinflation and really couldn’t afford a car. 336,000 German workers entered into the savings program. In the end, very few got their cars, and the luxury resort was later turned into housing for the slave laborers who were used to build the V2 rocket. Rest of the money was used for the war effort. The Russians took the remaining savings at the end of the war.
De Beers was created by British financiers who were worried that they'd lose money in diamond mines when even more mines were discovered in 1870 and took control of supply by becoming a cartel. To control demand (since prices collapsed in the 30's, only 10% of engagement rings had diamonds, and in Europe, diamond engagement rings were not a thing), their ad men at NW Ayer pushed free diamonds onto celebs/socialites, coined "A Diamond Is Forever" in 1947 even though diamonds can be shattered/chipped/discolored, and invented an idea that a ring should be a month or two's salary. Then small diamonds from the Soviet flooded the market, so De Beers invented "eternity rings." To prevent second-hand supply, retailers will not repurchase diamonds and due to the markup being 100-200%+, it wouldn't be profitable to do so. Furthermore, diamonds have varying grades, cuts, color, and quality, so they are nowhere near as fungible as metals like gold and price consistency is non-existent. So even thieves are surprised by the low prices they're offered.
7. It is a common wisdom that Better Business Bureau is a consumer advocacy group. Better Business Bureau is not run by the government but is a non-profit company that made $200 million in 2013. They are a business, nothing more, and have long been known to take money for ratings. Yelp's extortionate business model was basically ripped off from them.
8. In 1993, a small Canadian mining company Bre-X announced a huge discovery of gold at a site it purchased in the Indonesian Rain Forest. This site was estimated by a geologist initially to have 2 million Troy ounces of gold. This value steadily increased, rising by 3500% to 70 million Troy ounces in 1997. Over years the company shares went from penny stock to $280/share and in 1997 had a market cap of $6.6 billion dollars. Plenty of large institutional investors like retirement trusts were purchasing large amounts of stock.
In reality, it was all a fraud and the lead geologist was shaving off gold from his wedding band to add to drill core samples. An independent geologist test found that the site had little to no gold. After the news got out, the stocks went from a peak of $286 to $20 in a short time frame.
When the fraud was discovered, the original geologist committed suicide by jumping from a helicopter into the jungle, another partner died of brain aneurysm, and no one involved ever went to jail. The Ontario Teachers’ Pension Plan lost $100 million. The Ontario Municipal Employees Retirement Board lost $45 million. The Quebec Public Sector Fund lost $70 million.
9. In 1821, Gregor MacGregor invented a fictional Central American republic called "Poyais", convinced hundreds of people in his home country of Scotland to invest in the nonexistent country, and even oversaw the deployment of a ship of 250 people hoping to start a new life in Poyais. They expected to find a thriving city, complete with a cathedral, theater and opera house, surrounded by fertile farmland.
When their ship arrived, they found nothing but undeveloped, inhospitable jungle. They attempted to start a settlement there regardless, but over half of them died, in part due to diseases like malaria and yellow fever.
Gregor MacGregor not only did invent a fake country but invented a fake currency and had people exchange all their money for it, invented fake banks and issued fake land grants and bonds to investors. Not only did MacGregor raise £200,000 directly, the bond market value over his life ran to £1.3 million, or about £3.6 billion today.
10. Gary Bolton from the UK made £45 Million pounds selling bomb detection devices. He claimed his devices costing upwards of £10,000 each could find explosives, drugs, cash, tobacco and even people at distances of up to three miles. It was nothing more than a retractable antenna mounted on a plastic box. It had no scientific basis and did absolutely nothing for governments around the world. He was sentenced to 7 years in prison and had to pay a fine of £1.5 Million.
11The gold accumulator
In 1896, Reverend Prescott Ford Jernegan in Connecticut claimed he could get gold out of seawater. He showed everyone and sold millions in stocks. It turned out he was a professional scuba diver with money and put gold flakes in them every night. He fled the country with a lot of money.
12. The savings and loan crisis of the 1980s and 1990s (commonly dubbed the S&L crisis) was the failure of 1,043 out of the 3,234 savings and loan associations in the United States from 1986 to 1995. In the late 70s, the Federal Reserve Chairman, Paul Volcker, let banks treat the liabilities they were required to keep from depositors (savings, and to a greater extent the mortgaged loans everybody had out on their houses) as assets, and to invest, sell ownership of and sell the "dividends" from (in the form of mortgage payments).
Banks basically got greedy and were eaten alive by firms like Salomon Brothers, who treated them like the Fool On The Market they were. In sort of a prelude to the housing crises 20 years later, the banks and Wall Street firms overextended, couldn't meet obligations, doubled down knowing the government would bail them out rather than let millions of constituents lose their homes, and they ran the whole train into the ground. In the end, everyone paid out of the taxpayer's wallet, and the small time banks got shut down.
In 1996, the General Accounting Office estimated the total cost to be $160 billion, including $132.1 billion taken from taxpayers.
13. The ENRON Scandal is considered to be one of the most notorious scams within American history and many historians and economists consider it to be an unofficial blueprint for a case study on White Collar Crime. By misrepresenting earnings reports while continuing to enjoy the revenue provided by the investors not privy to the true financial condition of ENRON, the executives of ENRON embezzled funds funneling in from investments while reporting fraudulent earnings to those investors. This not only proliferated more investments from current stockholders but also attracted new investors desiring to enjoy the apparent financial gains enjoyed by the ENRON Corporation.
Due to the actions of the ENRON executives, the ENRON Company went bankrupt. The loss sustained by investors exceeded $70 billion. Furthermore, these actions cost both trustees and employees upwards of $2 billion; this total is considered to be a result of misappropriated investments, pension funds, stock options, and savings plans – as a result of the government regulation and the limited liability status of the ENRON Corporation. Only a small amount of the money lost was ever returned.
14. Someone, probably not the founder, Mark Hughes, figured out that ephedrine was an amazing drug. It was legal in the 80s, found in a Chinese plant called Ma Huang. It is a stimulant. He himself, and friends found that it was a really potent aid in weight loss, helped give a strong perception of energy boost and vitality. You could say that it is a chemical analog of amphetamine. So, he had this great product, Green Herbalife, and he was selling it out of the trunk of his car. It really worked. The customers were actually becoming very big fans of the product. Some would even say that they were addicted to it. Mark didn't want to hire salesmen, so he offered a partnership buy-in scheme. The customers who loved the product were some of his best customer, spreading the word and demanding more and more ephedrine. At some point, recruiting sales help become just as profitable as selling the drug itself.
The weight loss and entrepreneur sales pitches worked hand-in-hand, sweeping the country like wildfire. The product was eventually matched by commercial products like mini-thins, leaving the Herbalife business opportunity as the top selling point. First salesmen into new territories made a lot of money. Mark Hughes got very rich and died of an overdose. Then ephedrine became illegal to sell in some states, so the product was changed and diversified. The company got busted for being responsible for all those "Work at Home, full time/part time $15,000-$5,000/ month" signs in every corner of the USA.
15. The funny thing about Charles Ponzi is that he didn’t actually know what he was doing was actually a pyramid scheme in the beginning. He started the company that would later be a Ponzi scheme with the intent to invest in an arbitrage dealing with international relay coupons (which were almost like postage paid envelopes that were bought in one country but could be redeemed in another for cash). He thought he could make so much money doing this that he promised the first investors close to 50% interest and as he was trying to figure out how to make the original plan work, he just started paying out the original investors with money that came in from new investors. Those people spread the news so that more and more people were giving him money, so he kept it up. He hired other people to bring in more investors and it got to the point where he was receiving $1 million a day (in 1920) in investments (about $12.5 million in today's dollars). It all collapsed before he could figure out a way to make the original plan, or any other scheme, actually work. Ponzi's investors lost about $20 million in 1920 dollars ($225 million in 2011 dollars).
16New York Federal Reserve
In 2016, a group of hackers almost stole $1 billion from the New York Federal Reserve but were discovered when they spelled “foundation” as “fandation” in money request transcripts. They still managed to get away with $81 million.
17. The city of Vernon, Florida has been nicknamed "nub city" because so many residents have intentionally amputated limbs, disguising the injury as an accident, as a means of insurance fraud. One man had 25+ open insurance policies and collected over $1,000,000 after amputating his left foot
18. In 2014, two brothers from Girona, Spain sold a fake Francisco de Goya painting to a purported Sheikh for €1.5 million. The con artists realized they had been tricked when they tried to deposit 1.7 million Swiss francs (€1.5 million) in a Geneva bank and were told that the banknotes were mere photocopies.
19. The "teacup pig" fad was just a scam that sold baby piglets to unsuspecting buyers. Paris Hilton bought one off the internet and now owns a massive mama hog.
20. Albania's economy was wrecked in the 1990s when 2/3rds of the population was lured into government-backed pyramid schemes which then failed. It is estimated that close to $1.5 billion was invested in companies offering monthly interest rates ranging from 10%-25%, while the average monthly income was around $80. A significant number of Albanians sold their homes to invest, and immigrants working in Greece and Italy transferred additional resources to the schemes. After the schemes fell through, the country was in chaos which led to 6 months of anarchy with disgruntled citizens, army deserters, and even mafia syndicates seizing control of much of the country.
21Billionaire Boys Club
Billionaire Boys Club was a Ponzi scheme started in 1983 by young boys from rich families. Money contributed by investors was spent supporting lavish lifestyles. When funds ran short in 1984, club members turned to murder & at least two people were killed as they tried to raise more money.
22. In the most extensive case of health care billing fraud in US Department of Justice history, 243 people were busted for fraudulent billing to the tune of $712 million. One Doctor alone had billed for 205 hours in a single day.
23. Ren Xiaofeng, a manager of The Agricultural Bank of China, stole $26,000 from the bank with the intention of buying lottery tickets, winning, and repaying the initial theft. Against all odds, he won enough to repay the $26,000, so he tried this again with $6.7 million. He lost all but $95,000 and was sentenced to death.
24. In 2014, a woman named Tarshema Brice was arrested for printing $20,000 fake bills at home. She took $5 bill with specific watermark, soaked them in degreaser, used a toothbrush to scrub off the ink and then printed scanned images of $50 or $100 bills over them.
25. In 1989, Chamoy Thipyaso was given the world's longest sentence for corporate fraud according to Guinness World Records. In the late 1960s, Thipyaso started a chit fund called the Mae Chamoy Fund (Mae being the Thai word for Mother), which was made to look like an oil share with high returns. Due to Thipyaso's connections with the Air Force and Petroleum Authority, the fund was able to sustain itself for a remarkably long time. Connections to the military was a huge factor into one's political and business power, and so by appearing to have the military's backing this scheme seemed more legitimate to people.
She defrauded more than 16,000 people of $204 million. She was sentenced to 141,078 years in prison. However, the Thai law of the time specified that those convicted of fraud could not serve more than twenty years in prison, and she was released after only eight.