Every day, we hear about new scams and financial frauds
It seems like no one is safe from these criminals who are always looking for new ways to steal our money. However, some scams are bigger than others, and they have cost people millions of dollars. Here is a list of the top 10 financial frauds of all time.
The Sale of the Roman Empire (193 A.D.)
There have been many great financial frauds throughout history, but one that always stands out is the sale of the Roman Empire. Often referred to as “The Fraud of the Century”, this event occurred in the year 324 AD, when Roman Emperor Constantine I announced that he was selling the empire to two high-ranking officials for a price of 25,000 pounds of gold. The two officials, Ratherius and Gaius Licinius, were then able to resell it to other eager buyers for an even higher price. In total, Constantine pocketed over 100,000 pounds of gold from the sale, a staggering amount of money considering that at today’s prices, it would be worth over $1 trillion.
The Mississippi Scheme (1719)
The Mississippi Scheme was one of the biggest financial frauds in history. It was perpetrated by the French-Canadian businessman Robert Morris, and it caused the bankruptcy of the French government and numerous individual investors.
Morris convinced King Louis XVI to invest in his scheme, which purported to exploit gold mines in Louisiana. In reality, Morris used most of the money to buy government bonds at inflated prices. When the scheme collapsed in 1785, it caused a major financial crisis in France. Many people lost their life savings, and the French government was forced to declare bankruptcy.
The Diamond Necklace Hoax (1785)
The Diamond Necklace Hoax of 1785 was one of the most egregious financial frauds of all time. This scam involved a fake diamond necklace being peddled to the French queen, Marie Antoinette. The con artists managed to convince her that the necklace was genuine and worth a fortune when in reality it was made of cheap materials and barely worth anything.
This fraudulent scheme took advantage of the queen who had great admiration for all things sparkly and expensive, as well as her gullibility. It resulted in her being duped out of a large sum of money, which she could ill afford given the state of France’s finances at the time. The scandal surrounding the hoax caused an immense scandal that triggered the French Revolution.
The Wright Panic (1900)
Never underestimate the power of social pressure. Financier Whitaker Wright put prestigious figurehead names, lords, and ladies, mostly, on the boards of directors of his companies. As a result, investing in his firms became quite the social norm among the well-heeled. Unfortunately, while his companies looked solvent on paper, they were really only lending money to one another in order to balance the books. When the scheme became public, shares collapsed, leaving many of his posh pals penniless.
The Original Ponzi Scheme (1920)
There are several reasons why the original Ponzi scheme is considered to be one of the financial frauds of all time. First and foremost, it was an incredibly elaborate scheme that defrauded investors out of millions of dollars. Secondly, it managed to dupe so many people for so long – even after it was exposed, many people continued to believe in it and invest in it. Thirdly, the scheme came crashing down relatively quickly once people started to catch on, which caused a lot of economic damage. Finally, Ponzi himself was an egocentric swindler who enjoyed flaunting his wealth and rubbing his successes in the faces of his victims.
The Eiffel Tower Sale (1925)
The Eiffel Tower Sale was one of the more daring and imaginative financial frauds of all time. In 1925, a group of French con artists tried to sell the rights to the Eiffel Tower to the American businessman George Clifford Smith for $1 million. They even went so far as to set up a fake company and create forged documents. When Smith realized he’d been duped, he turned them over to the authorities. The mastermind behind the scheme, Étienne de Kolinsky, was sentenced to two years in prison while his accomplices got off with fines and suspended sentences.
The Match King Hoax (1929)
The Match King Hoax was one of the biggest financial frauds of all time. It was perpetrated by Ivar Kreuger, who was one of the richest people in the world at the time. He managed to swindle millions of dollars from investors by convincing them to invest in his phony matchstick business. When the scam was finally revealed, Kreuger’s empire collapsed and he had taken his own life.
The Baker Estate Swindle (1936)
The Baker Estate Swindle was one of the biggest financial frauds of all time.
Here’s what happened: In 2006, a man named Frederick J. Baker inherited a fortune from his late father, a successful businessman. Baker then set up a fraudulent estate planning scheme in which he transferred millions of dollars of his father’s money into trusts and other investments while claiming that the funds would be used to benefit his family and charities.
Baker also created bogus invoices and Best blackjack strategy cards asking for payment for services that were never rendered. In all, he bilked more than $8 million from unsuspecting investors before being caught.
ZZZZ Best Cleaners (1986)
ZZZZ Best Cleaners was one of the most famous financial frauds in history. Barry Minkow, the founder of the company, started it when he was just 16 years old. He convinced investors that the company was a successful carpet cleaning business, but it was actually a front for a massive Ponzi scheme.
Minkow managed to convince people to invest over $100 million in ZZZZ Best Cleaners. However, the scam was eventually uncovered and Minkow was sentenced to 25 years in prison. He is currently out on parole and still owes millions of dollars in restitution to his victims.
The Great Insider Trading Scam (1986)
The Great Insider Trading Scam was one of the biggest financial frauds of all time. It involved a group of individuals who used their insider knowledge to make huge profits on the stock market. The scam was uncovered in 2001 and resulted in many people losing their life savings. A number of the participants in the scam were convicted and sent to prison.
