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Since the time, people
started using money, there have been numerous cases of scams and frauds because
money can do anything. History shows that scammers are expert in preying on
people’s gullibility. But even after stealing millions, the future for these
people does not bode well, and usually, their frauds are exposed around world.
In this article, we have collected the 11 biggest scams in history which left
the investors poor and sometimes even destroyed entire economies.
1. Rafale
Scam
In 2007, India began the process to buy a fleet of
126 Medium Multi-Role Combat Aircraft (MMCRA) after the defence ministry,
headed then by Congress leader A K Antony, cleared the proposal from the Indian
Air Force (IAF). After a long process, bids were opened in December 2012
and Dassault Aviation emerged as L1 (lowest bidder). In the original proposal,
18 planes were to be manufactured in France and 108 in India in collaboration
with the Hindustan Aeronautics Ltd. There
were lengthy negotiations between the then Congress government and Dassault on
prices and transfer of technology. The final negotiations continued till early
2014 but the deal could not go through. Details
of the negotiated price per Rafale deal were not officially announced, but it
was suggested by the then Congress government that the size of the deal would
be $10.2 billion. The Congress claimed that per aircraft rate including
avionics and weapons was zeroed in at INR 526 crore.
In 2014, Modi government came in power. During PM Modi visit to France on April
10, 2015, he announced India will purchase 36 Rafale jets in a
government-to-government agreement as per his arrogant belief. After the
announcement, questions were raised by the Opposition on how the PM finalised
the deal without the approval of the Cabinet Committee on Security.
A joint statement issued on April 10, 2015, after talks between Modi and
then French President François Hollande, said they agreed to conclude an
Inter-Governmental Agreement for supply of 36 Rafale jets on terms that would
be better than conveyed by Dassault Aviation as part of a separate process
underway. The
statement said the "aircraft and associated systems and weapons would be
delivered on the same configuration as had been tested and approved by Indian
Air Force, in clear reference to negotiations and testing process for the
Rafale jets under the Congress government.
India and France signed Euro 7.87-billion (INR
59,000 crore approximately) deal on September 23, 2016 for 36 Rafale jets. Additionally,
an accompanying offset clause was sealed through which
France will invest 30 per cent of the 7.8 billion Euros in India's military
aeronautics-related research programmes and 20 per cent into local production
of Rafale components.
PM Modi even did not say why only 36 Rafale jet instead of 126 jet as
per requirement of Indian Air Force. So all Opposition and specially Congress smell up corruption in deal and
asked Modi to discuss all details about deal but he refused as usual.
Reliance ADAG would have involved in the deal and operated as
per Narendra Modi’s advice. Even Ex France President Hollande revealed that
Narendra Modi told us to give contract to Anil Ambani group. So clear
cut Scam of 37000 Crore of Narendra Modi Government which is so big.
2. In 1996, a Canadian mining company, Bre-X,
announced a huge discovery of gold, and in the process went from a penny stock
to $280 per share, with a total value of $4 billion. In reality, it was all a
fraud and the lead geologist was shaving off gold from his wedding band to add
to drill-core samples.
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During the late 1990s, Geologist John Felderhof believed that a
property near the Busang River in Indonesia would produce gold after mining.
At his advice, David Walsh, the founder of Bre-X Minerals Ltd., bought the
property. The project manager of the gold
mining project was Filipino geologist Michael deGuzman. When deGuzman tested
the initial samples, he didn’t find any trace of gold, so he shaved off some
gold from his wedding band, added it to the samples, and declared the first
estimate of the total find to be about 62 metric tons. The news of the presence
of gold in Bre-X’s property soon spread like wildfire. The company claimed that it was going to be the richest gold mine ever
discovered. Mining investors rushed to invest and the stock price of Bre-X
started climbing, and it rose from pennies to $280 per share.
Michael
deGuzman kept on salting the samples, and that worked until 1997. In 1997, the
Indonesian government got involved, and from February 1997, the evaluation of
the site began. In March 1997, deGuzman
committed suicide by jumping from a helicopter. Bre-X and its mine’s
reputation started going downhill from then on. On March 26, 1997, an American
firm announced that its core sample collected from Busang contains a negligible
amount of gold. As a result, the Indonesian government postponed signing the
mining deal with Bre-X. Stock prices began to fall, and thousands of investors
lost billions. TSE and NASDAQ suspended trading of Bre-X stock, and it went
bankrupt on November 5, 1997.
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3. Founded in 1985, the Enron Corporation claimed
revenues of nearly $101 billion during 2000 and employed approximately 20,000
staff. But the real value of the company was exposed at the end of 2001, after
which the company was declared bankrupt. Enron was responsible for wiping out
over $78 billion in stock market value.
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The American company Enron came into focus after
1996 when it began reporting a steady increase in its sales each succeeding
year. From 1996 to 2000, the sales of Enron was
reported to increase from $13.3 billion to $100.8 billion. It was declared as “America’s Most Innovative Company” by Fortune magazine for six
consecutive years. But at the end of 2001, the actual financial condition
of Enron was revealed to public. The report stated its accounting fraud, also
known as the “Enron Scandal,” and the company filed for bankruptcy in 2001.
The Enron Scandal revealed the loopholes in accounting
rules in America. The company used to book revenue from huge energy-derivative
contracts at their gross value instead of their net value. Basically, Enron served as a middleman on deals. It
would put together a seller with a prospective buyer and take “delivery” of the
contract. Then it would book the entire “sale” as its own revenue. This was made possible due to a loophole in
the procedures approved by the Financial Accounting Standards Board (FASB).
According to the board, each company had a “free option” as to how to account
for the deals of energy contracts.
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4. In 1821, a Scotsman, Gregor MacGregor, invented
a fictional Central American republic called “Poyais” and convinced hundreds of
people in his home country of Scotland to invest in the non-existent country,
and even oversaw the deployment of a ship of 250 people hoping to start a new
life in Poyais. When their ship arrived, they found nothing but undeveloped,
inhospitable jungle.
Gregor MacGregor was born in 1786 at Glengyle,
Scotland. He carved out a place for himself in history by pulling off one of
the biggest frauds of the early 19th century, gaining over £200,000 in the
process. In the early 1820s,
McGregor invented an entirely fictional country and named it “Poyais” He
claimed it was located near the Black River in what is now present-day
Honduras. McGregor claimed that Poyais
covered eight million acres, and he was the prince of this land. He also
claimed that the land was rich in natural resources but required manpower to
turn it into a developed country.
MacGregor began an aggressive campaign to make
people believe in his fictional country. He printed advertisements and leaflets
and gave interviews in national newspapers. He
even had Poyais-related ballads composed and sung. In mid-1822, a 355-page
Poyais guidebook was being sold in London and Edinburgh which contained elaborate
maps and details about this fictional country. The official-looking book convinced many people, and they started
buying Poyaisian land certificates. By early 1823, about 500 people had bought
Poyaisian land.
After
that, McGregor began making arrangements to send interested people to Poyais.
On 10 September 1822, a vessel with 70 emigrants on board sailed towards the
non-existent country. Later, on 22 January 1823, another vessel sailed with
almost 200 emigrants aboard. Upon
reaching the land which was they believed to be Poyais, the emigrants realized
they have been duped. Few travelers were able to return, and most of them died
due to diseases like yellow fever and malaria. So it was dangerous for them.
5. In the early 1990s, the infamous Italian
criminal Charles Ponzi scammed investors out of about $7 million by passing on
new investors’ money to existing investors and presenting it as a sustainable
investment.
In the summer of 1919,
Charles Ponzi was living in Boston. The
idea for a scam began forming in his mind when he received a letter from a
Spanish company. The letter contained an international reply coupon (IRC).
This coupon could be redeemed by the recipient for postage to the sender’s
country. Ponzi realized that he can buy
the coupon in one country and then exchange them for postage in another country
with a higher value of postage. Soon, he set his plan into motion, but he
required a large amount of capital to buy the IRCs with cheap, European
currencies.
To raise the money, he went to his friends and
promised them double returns in 90 days. Some people invested and they got the
interest as promised. In January 1920, Ponzi
opened his own company to promote this scheme. In the beginning, 18 people
invested. They got the promised interest the next month. As word spread about
this unbelievable scheme, investments started pouring in.
By June 1920, the net total investment in Ponzi’s
scheme rose to $2.5 million. People began mortgaging their homes and even
invested their life savings in the scheme. But
no one realized that Charles Ponzi was paying the earlier investors with the
money invested by new investors. Ponzi’s
rapid rise drew suspicions, and his publicity agent found incriminating
documents related to the scam. The agent wrote an article for the Boston
Post which brought Ponzi’s scam into public view. From then on, things went
downhill for Charles Ponzi, and his investors lost about $20 million. In November 1920, Ponzi was sentenced to
five years in prison. So we have to
aware from this kind of scheme. There is no shortcut in life to become
successful.
6. After buying the financial institution Lincon
Savings and Loan Association, Charles Keating began investing savers’ cash in
high-risk ventures without informing the depositors. The scam was revealed in
1989 after the business failed leaving thousands of elderly investors with
worthless bonds.
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| Image Source: www.nytimes.com
Charles H. Keating was a champion swimmer,
activist, lawyer, banker, and real estate developer. But the thing he is most known for is his role in
the savings and loan scandal of the late 1980s. Charles Keating became the head of Lincoln Savings and Loan Association
in 1984. Immediately after joining the enterprise, he fired the existing
management. During those times there were quite loose restrictions on
banking investments. Taking advantage of this opportunity, Keating began
investing depositor’s money in high-risk investments. For the next four years,
Lincoln’s assets increased. It rose from $1.1 billion to $5.5 billion.
In 1989, Lincoln Savings’ parent company, American
Continental Corporation, went bankrupt. The day after American Continental
Corporation went bankrupt, Federal authorities seized Lincoln Savings. The scam
left 23,000 customers with worthless bonds.
7. In 1925, a Portuguese named Alves dos Reis
forged a government contract authorizing him to print money and “officially”
printed himself 100 million escudos, the equivalent of 0.88% of Portugal’s GDP
at that time, leading to the “Portuguese Bank Note Crisis.”
Image Source: commons.wikimedia.org
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In 1924, Alves dos Reis was in jail for embezzling
money from a company. During his 54-day stay in jail, he planned a scam which later came to
be known as the “Portugal bank note affair.” After being released from
jail, Reis forged a contract in the name of the Central Bank of Portugal, Banco
de Portugal. Then he posed as a representative from the bank and convinced a
London-based company that the bank had authorized him to print his own bank
notes. Reis further claimed that the
money they were going to print was a part of a secret project, and it would be
used to financially aid a struggling Portuguese colony, Angola.
According to Reis’s instructions, the London-based
company printed an equivalent of £1,007,963 of bank notes. The notes were then circulated into the Portuguese
economy. In June 1925, he created the Bank of Angola & Metropole to help
Angola. He even went on to buy the
controlling interest in the Bank of Portugal following which he hoped he would
be able to successfully hide his scam. But the low-interest rates of the
Bank of Angola & Metropole piqued the interest of journalists, and they
raised questions. Finally, the Bank of
Portugal noticed the bank notes with duplicate serial numbers, and Reis’s scam
was exposed. Five years later, he was sentenced to 20 years in jail.
8. In the 1920s, Ivar Kreuger, who owned banks,
film companies, newspapers, mines, telephone companies, and railways, decided
to form a monopoly to control all the world’s safety matches. International
banks begged him to let them invest, not knowing that his many companies
existed only on paper, profitable only because they were invested in each
other.
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The Swedish civil engineer Ivar Kruger began his
career by helping in building New York’s Plaza Hotel and other landmarks. After gaining experience, he opened a company in
Sweden in 1908. His company soon became the best construction firm in Sweden.
Then Kruger took over his father’s match business. In 1917, he founded the Swedish Match Company. In the post-depression
era after WWI, Kruger began to acquire match-making factories around Europe.
From 1925, Kruger began offering loans to insolvent
countries at a bargain that was hard to refuse. He would also provide loans to
countries that offered him a national monopoly on match production. Using his skills, he increased the sales in the
country. Since the governments taxed matches, the increase in sales would
increase tax revenues used to repay the loans. By 1931, the Swedish Match Company controlled 250 factories in 43
countries. But his empire collapsed during the Great Depression. On 12 March
1932, he committed suicide by shooting himself.
The death of Kruger led to the “Kreuger crash.” It
hit investors and companies all over the world, especially in America and
Sweden. After his death,
Kreuger’s forgery of Italian bonds amounting to $142 million was found out. In Sweden, Kruger owed more than the
country’s national debt. As a result, the suicide rate increased in Sweden and
the prime minister fell. In America, his shares collapsed taking with it the
life savings of thousands of people.
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9. Nigerian scammer Emmanuel Nwude once sold a fake
airport to a major international bank for $242 million, and the scam wasn’t
discovered until 3 years later.
Emmanuel Nwude is a Nigerian fraud artist who was
formerly the Director of Union Bank of Nigeria. In 1995, he defrauded a Brazilian man, Nelson
Sakaguchi, who was the Director at the Brazil’s Banco Noroeste. Nwude began his
scam by impersonating the then Governor of the Central Bank of Nigeria, Paul
Ogwuma. Posing as the governor, he convinced Sakaguchi to invest in a new
airport located in Nigeria’s capital, Abuja. In exchange, he asked for a $10
million commission.
The fraud remained undetected until 1997 when a
Spanish bank decided to take over the Banco Noroeste Brazil. When an official
from the Spanish bank enquired about the large sum of Noroeste’s money which
was sitting in the Cayman islands unmonitored, it led to a criminal
investigation. It was found that
Sakaguchi had paid $242 million in between 1995 to 1998 to Emmanuel Nwude who
promised him an airport which actually never existed.
10. When “Count” Victor Lustig discovered that the
famous Eiffel Tower was in need of repairs, he faked some government papers and
sold the tower to scrap metal dealers twice with a total of over $200,000 in
bribes to throw the multi-million dollar contract their way.
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Victor Lustig began his conman career through a “money-printing
machine.” The machine would produce a counterfeit bill of $100. His client
would buy the machine for a high price believing that it would provide them
with huge profit in the future, but the machine would produce $100 bills only
for the next 12 hours after which its supply became exhausted resulting in
blank notes. By the time the person realized the scam, Lustig was long gone and
hidden somewhere.
Lustig’s sale of Eiffel Tower began in 1925 when he
read about a repair and maintenance of the tower in a newspaper. He invited six scrap metal dealers and posing as a
government official said that Eiffel tower would be taken down. Then he asked
them to submit a bid and finally secured a deal with one of the dealers. For finalizing the deal, scrap dealer Andre
Poisson offered a large bribe and secured the deal. After receiving the money,
Lustig went away and Poisson was too embarrassed to lodge a police complaint.
A month later, Lustig returned back to Paris and repeated the same trick. His
second victim knew everything and directly went to the police, but Lustig
evaded arrested.
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11. From 1997 to 2002, over 4,000 people paid an
advance fee in order to receive new cars at a fraction of their value. The cars
supposedly came from the estate of a wealthy Christian man according to his
will. The scheme took in over $ 21 million, but neither the deceased, his
alleged will, an estate of any kind, or the cars ever existed.
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| Image Source: www.highlineautomotive.in
The “miracle car scam” began with a story
circulated by a man named Robert Gomez who claimed that he was the adopted son
of John Bowers, a wealthy executive of a food company. Three years later, just before Christmas Bowers
claimed in his church that he is now the heir of Bowers’ estate which is valued
at $411 million. He also said that Bowers had instructed in his will that a
fleet of 16 luxury cars would be given to fellow believers as a “gift.” The beneficiary needed to pay an amount of
roughly $1,000 to $1,100 as a conveyance fee for each vehicle. The news spread
through word of mouth and many church members showed interest in the deal.
People started depositing the conveyance fee, and in a course of four years,
from 1997 to 2002, 4,000 people deposited the advance fee.
The staggering number of car sales aroused
suspicion, and an investigation was launched. Investigators found out that a man called John
Bowers, as described, never existed and neither did his estate or cars. It was also revealed that in 2002, Gomez,
along with his accomplice, had collected $21.1 million from people. In 2003, he
was sentenced to 21 years and 10 months in federal prison.
So this types of Scam done by
scammer and cheated publics and government so be aware and spread awareness.
Be active & don’t show your so much trust to anyone because this type of
trust sometimes becomes Scam.
If you know other big Scam
then comment and share your idea and aware world. Disclaimer: We don't want to hurt any Person or Community by this Post. For Best and Secret Deal of the Decade, Click on below Sites: |
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