The Black Diamond Ponzi Scheme

During the time of the scandal, which broke in mid-2005, PBS&J had 4,000 employees in 75 offices in 24 states (Barnett, 2007). A number of high-profile projects were under construction with FDOT, OOCEA, and TxDOT. The funds from these projects were being brought into the firm at a rapid rate; however, PBS&J contained a flimsy internal controls system which facilitated the embezzlement that eventually took place. The major players of the scandal were located in the firm’s Miami office. They were Scott DeLoach, then chief financial officer (CFO); Maria Garcia, an accounting employee who was in charge of the office’s database and bank reconciliations; and Rosario Licata, a bookkeeper who maintained the firm’s benefits bank account (Eubanks, 2016).

Richard Scrushy defrauded, stakeholders, stockholders, and the community out of millions of dollars. His deceptive, unethical, and commanding behavior was the stone that caused the biggest misappropriation avalanche of all time. We must consider this question, how is corporate cheating happening and who is heading the deception? Behind every crime, there is a ringleader or a group of individuals "calling the shots." In this case, Scrushy was the one who told his "family meeting members" to "fix" financial records, so HealthSouth to meet or exceed the business financial goals. A person from the beginning may have the objective to cheat; others get sucked into the whirlpool of white-collar crime.

Overview of the Case: The Securities and Exchange Commission claims Mark D. Begelman misused proprietary information regarding the merger of Bluegreen Corporation with BFC Financial Corporation. Mr. Begelman allegedly learned of the acquisition through a network of professional connections known as the World Presidents’ Organization (Maglich). Members of this organization freely share non-public business information with other members in confidence; however, Mr. Begelman allegedly did not abide by the organization’s mandate of secrecy and leveraged private information into a lucrative security transaction. As stated in the summary of the case by the SEC, “Mark D. Begelman, a member of the World Presidents’ Organization (“WPO”), abused

Well one red flag is that his performance appraisal has decline in every form especially his management skills. But when you look at the Syntech System’s articles of incorporation many red flags appear. One being that the addresses of Brian and Syntech Systems are identical. Also the name of the board of directors and his wife is Debra. So she must have used her maiden name to create a shell company to get money from Excursion Airlines.

Facts: In November 2008, the parties signed an employment agreement providing that Relator was to serve as the director of the school for the 2008-09 school year. The title of the agreement states the dates July 01/2008-June 30/2009. "The first sentence of the agreement lists the administrative positions to which the agreement applies and states, "This is a general at will agreement."(Ellis vs. BlueSky, 2010). Yet the agreement provides that "[p]ositions will automatically

17, 2014, in Salt Lake City, Utah, Robert L. Holloway, of San Diego, California, was sentenced to 225 months in prison and ordered to pay $15.2 million in restitution for orchestrating a $33 million Ponzi scheme resulting in $15.2 million in losses to investors. Holloway recruited investors by making false representations, including that US Ventures used proprietary trading software that was consistently profitable. Holloway also generated and distributed reports to investors showing false daily returns on their investments (IRS)

Also, it was reported that he purchased an estimate of $200,000 in cash for new cars alongside his hoe upgrade. These purchases came out from several bank accounts that were from different banks to help pay off his mortgage that cost over 80,000 dollars. This brought up red flags because the annual salary for the Director of Finance was estimated to be 80,000 dollars and he had no other income reported. Thus, this brought suspicion from the Government, which forced him to plead guilty due to fraud of receiving illegal federal funds. As a result, he is facing five years in federal prison. As for Sharika Allison, she has been guilty for fraud because her annual salary as a Controller was 62,000 dollars and she had no proof of additional income reported. Thus, she pleaded guilty of committing fraud upon receiving illegal federal funds and was sentenced to three years to federal

BMIS engaged in three different operations, namely investment advisor services, market making services and proprietary trading. Bernard Madoff conducts certain investment advisory business for clients that are separate from the BMIS proprietary trading and market making activities. Bernard Madoff has been conducting a Ponzi-scheme through the investment advisor services of BMIS, and through their scheme have defrauded investors out of monies estimated to exceed $50 billion. When a senior employee was told by Madoff that there had been a request from clients for approximately $7 billion in redemption and he was struggling to obtain the liquidity necessary to meet those obligations. Madoff also told another employee on December 9, 2008 that he wanted to pay bonuses to employees of the firm. This was earlier than bonuses were paid, and also with another employee admitting that his investment advisory business was a fraud that it’s all just one big lie and that it was basically giant Ponzi scheme. Bernard Madoff also informed employees that he planned to surrender to the authorities but before he does that he had approximately $200-300 million left and planned to use that money to make payments to certain selected family and friends. Madoff would make people believe that BMIS was a legitimate enterprise engaged in the lawful brokerage and sale of investment securities, when BMI

Conrad black is in a company hollinger international he purchased in interest in daily telegraph along with other purchase throughout the following 15 years charge were laid against black for tax evasion and racketeering. In 2007 black was convicted of four of the thirteen charges against him 78 months in prison which he served only 42 he was released in 2012. He was announced guilty and fraud of obstructing justice and was charged with eight counts of mail fraud and wire fraud. His fine was $250,000 in the U.S. and after he got out of prison it went all across america and he also threw a $42,000 birthday for his wife. Black is being sued in $71 million (U.S.) in back taxes. The other people

The non-existent revenues reported from these contracts convinced banks to lend money to ZZZZ best, who then used the funds to pay salaries and expand the company’s legitimate business. However, first the funds were sent though a financial loop so that they would appear to be revenue. First, ZZZZ best would hire Marbil Management, a bookkeeping from owned by ZZZZ Best's senior vice president Mark L. Morze, to supply labor and materials for the job. However, these funds would only stay in Marbil’s account for approximately 20 seconds before being transferred back to Padget who would falsify additional contracts. (Murphy, 1989).

On April 21, 2001, Lee Farkas, the former chairman of a private mortgage lending company, Taylor, Bean, & Whitaker (TBW), was convicted for his role in a more than $2.9 billion fraud scheme (Schoenberg, 2011). This action contributed to the failures of Colonial Bank, one of the 25 largest banks in the United States, and TBW, one of the largest privately held mortgage lending companies in the United States. According to court documents and evidence presented at the trial, Farkas and his co-conspirators engaged in a scheme that misappropriated more than $1.4 billion from Colonial Bank’s Mortgage Warehouse Lending division and

In april 15, 2014, SEC filed charges against Telexfree, Inc.. The charges were filed with the commission’s request of immediate asset freeze against Telexfree and eight other individuals, and this request secured millions of dollars of funds and prevented the potential loss of investor assets. Also other than the charges against the company itself, SEC charged several Telexfree officers, promoters, and several entities related this pyramid scheme based on their receipt of investor funds.

A Ponzi scheme is an illegal business practice in which new investor’s money is used to make payments to earlier investors. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses, instead of engaging in any legitimate investment activity. The returns are repaid out of new investors’ principal, but not from profits. This can continue as long as new investors line up with cash, and old investors don’t try to withdraw too much of their money at once.

Steve Starr, a Tampa Bay-based RV dealer was going slow with his sales in 2008 when he was approached by a  Spyker Telemarketer, a fraudulent investing company. According to a story on CNBC, The company manipulated Starr to invest $25000 in precious metals through a sales pitch. Spyker also validated Starrs investment to be profitable through misleading statements.

The illegal construction of the Bernie Madoff securities pyramid scheme grew to preposterous proportions from legal, auditing, and regulatory weaknesses of the Securities Exchange Commission, the designated regulatory body of the U.S. financial markets. The required expertise, authority, and relevant penalties needed to deter management from committing ethical breaches lacked substance in the case study of BMIS (Crews 11). Even after the wake of the Enron and WorldCom scandals that occurred in the early 2000s, the SEC unexplainably revoked provisions created to help avoid fraud. The provision the SEC revoked specifically mandated firms structured like Madoff’s to be audited by accounting firms registered and audited by the Board. By revoking the provision, BMIS was allowed to continue its Ponzi scheme for another half a decade with the aid of utilizing an unregistered, small accounting firm called Freihling & Horowitz (“Madoff’s Jenga”