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Worst frauds of 2009

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8th Jan 2010
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MacIntyre Hudson's director of counter fraud services, Jim Gee highlights some of the worst frauds of the past 12 months.

Last year proved to be a bumper one for fraud, with 292,799 reports of various scams reported by media outlets and the biggest fraud ever - involving Bernard Madoff's $65bn ponzi scheme - dominating the headlines. The recession sparked a major increase in fraudulent activity in almost every area of the economy, so here's our pick of the biggest, strangest, most wicked and just plain embarassing frauds of the year.

Bernard Madoff
Madoff will forever be famous for having perpetrated what could be the largest fraud ever undertaken, running a ‘Ponzi’ scheme which defrauded investors of up to $65 billion. The investors who lost out included Zsa Zsa Gabor, who lost at least $7 million. Madoff had around 100 signed cheques totalling more than $173 million in his office desk at the time of his arrest. In June he was sentenced to serve 150 years in prison, the maximum sentence allowed.

Pfizer Inc

The pharmaceuticals giant was ordered to pay $2.3 billion in America’s largest healthcare fraud settlement, for making false claims about four prescription medications. The payout – a $1.3 billion criminal fine and a $1 billion civil settlement – includes $102 million to be divided among 11 whistleblowers.

Veronica Hyland
Hyland was a lawyer who conned a dying millionaire out of more than £90,000 and put his blind wife in a nursing home (where her guide dog was not allowed) while she lived in luxury on their money. She forged a power of attorney document and used blank cheques to cheat cancer patient Les Carrier and his wife Doris, who had Alzheimers. The good life ended when Hyland was jailed for 28 months after admitting 16 charges of fraud, theft and false representation.

Wayne Gouvela

Gouvela pretended he was an MI5 agent, conned his girlfriend into believing he was a real-life James Bond and defrauded her of nearly £14,000. Whisky shop assistant Gouvela stole the money after convincing Leanne McCarthy that her boss was trying to poison her with anthrax powder in her mail. Fearing for her life, the teenager let her boyfriend take charge of her post, so he could “decontaminate it”, effectively giving him access to her bank accounts and pin numbers. Gouvela was given an 18-month prison sentence.

Howard Manoian
Howard Manoian was a local hero in the Normandy village to which he had retired. The American was happy to tell how he was wounded in action twice after parachuting into nearby Sainte-Mere-Eglise in the fierce World War 2 battle later depicted in the film ‘The Longest Day’ starring John Wayne. However, his unit was not the fabled 82nd Airborne Division, but the 33rd Chemical Decontamination Company. In fact, after arriving at Utah beach by supply ship, Manoian and his company spent the rest of the war minding a supply dump in Northern France and providing showers for war weary soldiers. His Legion d’Honneur has now been rescinded, his name and photo removed from official records and museums, and ‘feeling poorly’ he has returned to America.

Allen Standford
Allen Stanford, the Texas magnate and billionaire cricket impresario, was served with legal papers detailing the alleged $9.2 billion fraud charges against him. The U.S. Securities and Exchange Commission sued Stanford, two associates and three of his businesses in February, alleging they perpetrated a $7 billion fraud scheme involving the sale of certificates of deposit through Antigua-based Stanford International Bank Ltd. Stanford, who also faces criminal fraud charges, has denied any wrongdoing.

Enid and Lorraine Bell

Enid Bell and her daughter Lorraine defrauded £612,475 in benefits to fund an extravagant lifestyle. They bought eight houses and luxury cars with the fortune that they swindled. Enid, who masterminded the scam, used at least eight different identities and addresses and set up separate bank accounts to make it difficult to trace the bogus claims. They have been ordered to repay every pound defrauded to the Department of Work and Pensions and received prison sentences of four and a half years and two years.

Stefano Arrighetty, 63 municipal police commanders, 39 local government officials, and 7 managers of private companies.
An engineering student from Genoa, Arrighetti created the “T-Redspeed” system, which was adopted all over Italy to detect vehicles jumping a red traffic light and to store their number plates on a connected computer system. With 108 other people he is under investigation for allegedly rigging the cameras to unjustly trap innocent motorists and in the process rake in fines of 150 Euros (£130) a time. More than one million Italian drivers were wrongly snared on red and landed with flat fines after the lights did not stay on amber for the regulation five or six seconds.

Cath Wiles
Wiles was a trusted member of her council’s finance team, but she invented a children’s home to siphon off £620,000 that was meant to help disadvantaged youngsters and their carers. She carried on the fraud for five years, using the money to fund an extravagant lifestyle that included exotic foreign holidays and expensive cars. Wiles later admitted 24 counts of theft and fraud and was jailed for two years and eight months.

Anthony Webster
Anthony Webster systematically siphoned £455,000 from the bank account of the then Chairman of Lloyds Bank, Sir Victor Blank. Webster was a high flier who had been rapidly promoted after joining Barclays at 16, having been voted the bank’s ‘best team player’. Webster was jailed for three years for helping to steal the cash – and a further £150,000 belonging to two other customers – but it was also a little embarrassing for Sir Victor that his account was found to be with Lloyd’s rivals at Barclays.

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By tysonn
13th Jan 2010 15:01

worst frauds

Jim

An interesting read as usual.

Cheers

Neil

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