Be Cautious with Your Money, Fraudsters are Everywhere. Do not Let All These People Have Your Money


Finance might be the most difficult thing to be understood. Many people learn it in the college but only a few are successful enough to make money out of their knowledge. Sometimes, they are too desperate with their fucking life. Thus, when the money is right in front of their face, they start losing their mind get away with other people’s money.

Fraud and corruption are the worst moral hazard in the financial world. Fraud is almost undetectable because some organizations, especially companies always argue that fraud won’t happen inside their organization. The companies frequently neglect until the case burst out to the media. However, it is a strong and rational reason why external auditor like PWC, Ernst & Young or KPMG get their reputation. Because of what? Because fraud usually happens because the culture and environment are supportive to it.

Fraud among us
[/media-credit] Fraud among us – Global Fraud Survey

Fraud maybe as old as human civilization itself. There is an evidence for it. Back in 1772 B.C, people has known Code of Hammurabi, or code of law. The law is to stop the spread of counterfeit coins among the society. See? There are already fraudsters in that era!

The advancement of technology today make it easier for people to defraud money they do not deserve. According to the report of Association of Certified Fraud Examiners (ACFE), there were 5% losses of organization’s revenues every year to fraud! The losses even reach $3.7 trillion globally in 2013 alone. Wow, it is a big money, man.

Many people combat the fraud but many more people commit it every day. Some of them even people, who really trust them suffer, make their worst than before. These people below even transform into biggest criminal mastermind. Maybe even be worst fraudster like Jin Hyun-Pil in Master.

Charles Ponzi

Charles Ponzi
[/media-credit] Charles Ponzi

This man is well-known for his moral hazard. His name even becomes the name of the most famous fraud scheme in the world. This Italian-born businessman put all of his investors, – the victims actually, under his very attractive investment scheme. He promised the scheme will make a profit of up to 400 percent. But, it is just a promise. Ponzi successfully over $4.5 million in a few short months, for just himself! Because of it, six banks are in disrepair and many investors lose up to $20m of their investment.

Kweku Adoboli

Kweku Adoboli
[/media-credit] Kweku Adoboli

Kweku Adoboli is the other worst fraudster after Ponzi. He was The Ghanian national and Nottingham University graduate but he used the knowledge to make a short-term success. Kweku Adoboli had engaged in various off-the-book during his work in UBS’ British investment arm. He put nearly $2.3 billion in unauthorized trades and turn his annual salary £30,000 to £200,000. However, his manipulation was still under the name of his company thus write off $50 billion in bad mortgage loans.

Barry Minkow

Barry Minkow
[/media-credit] Barry Minkow

I think Barry Minkow is a wonder-kid in business. At the age of 21, he and his company ZZZZ Best were worthed about $110 million. The company basically sold carpet cleaning and restoration but somehow, they decide to enter stock market manipulation. The truth was more horrible than that. The company was not doing cleaning and restoration but elaborating Ponzi scheme. He defrauded about $100 million of investors’ money. stock market manipulation

Bernie Madoff

Bernie Madoff
[/media-credit] Bernie Madoff

If you aware enough to the news, in 2009, there is a person, a former Wall Street trader who is sentenced 150-year punishment behind the bars. That person was Bernie Madoff and he has defrauded his clients up to $65 billion – the worst fraud case in American history! Again, Ponzi scheme is the backbone of his crime. He actually did not attract investors with a very high potential return. Instead, he just offered his “goodwill” as an experienced asset manager on Wall Street. In addition, his firm was well-known with its punctuality in returning money to the investors.

Fraud is a very serious crime. It can make people lose their faith in overall financial institutions and regulations. If that really happen, I cannot imagine what will happen next. Banks will bankrupt and companies will lose their valuations and yeah, the financial crisis happens all over again.

I know the fraud, especially is very hard to understand. So, I have planned to dig deeper about it I will deliver it to you soon. Just always check this website out and be safe with your money.


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