The 5 Largest Financial Scams in History
Financial frauds and scams have led to shocking collapses and billions in losses throughout history. Here are 5 of the biggest cases that stunned the business world.
5. Wirecard
- Estimated Loss - $4 billion
- Year: 2020
- Location: Germany
Wirecard, once a rising fintech star in Germany, collapsed in 2020 due to a massive accounting scandal. Executives were found to have faked over $4 billion in profits and misappropriated customer funds, deceiving investors and regulators. The fraud revelations led to insolvency, legal charges, and exposed lacked financial oversight in Germany. Former CEO Markus Braun faces up to 15 years in prison if convicted.
4. FTX
- Estimated Loss - $7 billion
- Year: 2022
- Location: Bahamas
FTX, a crypto exchange founded in 2019, collapsed in November 2022 after a liquidity crisis exposed massive fraud. CEO Sam Bankman-Fried was found to have secretly diverted billions in customer funds to his inner circle for lavish spending and shady investments. The implosion destroyed the $32 billion company and led to charges against Bankman-Fried, who faces over 100 years in prison.
3. WorldCom
- Estimated Loss - $11 billion
- Year: 2002
- Location: United States
WorldCom was a massive telecom company that collapsed in 2002 amid an enormous accounting scandal during the dot-com crash. Executives had inflated profits by over $11 billion through fraudulent bookkeeping. The fraud led to bankruptcy, the loss of tens of thousands of jobs, and over a decade in prison for CEO Bernie Ebbers.
2. Bernie Madoff
- Estimated Loss - $65 billion
- Year: 2008
- Location: United States
The largest Ponzi scheme in history was a decades-long fraud perpetrated by Wall Street financier Bernie Madoff. By using new investments to pay old ones, Madoff cultivated the illusion of consistent profits. But in 2008 the scheme collapsed as investors sought withdrawals during the financial crisis, exposing the estimated $65 billion fraud and landing Madoff 150 years in prison.
1. Enron
- Estimated Loss - $74 billion
- Year: 2001
- Location: United Statess
Enron was an energy giant that shockingly collapsed in 2001 due to massive accounting fraud. Executives had inflated profits and concealed debts totaling billions. The company declared bankruptcy, causing substantial investor losses and pension defaults for thousands of employees. Enron became a notorious symbol of corporate greed and financial misconduct. CEO Jeffrey Skilling was convicted of fraud and conspiracy, receiving a 14-year prison sentence.