We Are Going To Discuss 5 Corporate Fraud Cases that has shaken the Business World
Are you a regular roamer of Wall Street? If yes, you probably know almost all the secrets of the corporate world. However, there are a few recent Corporate Fraud cases that were a secret until last year.
Those corporate and accounting scandals have shaken the foundation of business ethics. We have rounded up some of the infamous corporate fraud cases in 2019. It will make you surprised to understand their extent of fraudulent and dishonesty.
What is Corporate and Accounting Fraud
Any kind of dishonest or illegal activities at the corporate level is Corporate Fraud. If an individual or organization is engaged in any unlawful activities to give advantages to a perpetrating organization or person, it is Corporate Fraud
Accounting Fraud is a subset of Corporate Fraud. In this case, a company’s financial documents are altered to conceal the net loss, plummeting sales, or slow revenue. These are done to represent the organization as more profitable to potential buyers or investors.
5 Most Famous Corporate Fraud Cases
5 Most Famous Corporate Fraud Cases GIven Below
1. Data breach in 100 Million Capital One Credit Card accounts
In July 2019, the Capital One Bank had suffered the most significant data breach of its history. A hacker named Paige Thompson broke into the bank server and gained access to around 100-million customer data.
The data includes Social Security Number, Credit Card Number, Bank Account Number, names, addresses, and many more. Thompson, a former employee of Amazon Web Service, shared the data with others through online communication.
2. Trade secret theft by Huawei
The Chinese telecom technology giant Huawei was charged with multiple corporate fraud and wire fraud charges in 2019. The U.S. authorities blamed the tech giant for misleading the U.S. government to operate the business in Iran.
Huawei was also charged with stealing telecom technology from T-Mobile. This indictment alleges Huawei took the smartphone durability testing technology. The Chinese company was also indicted with the charge of obstructing justice.
The Canadian authorities arrested Huawei’s CFO Meng Wanzhou at the request of the U.S. Department of Justice.
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3. Steinhoff $7.4-Billion Accounting Fraud
Steinhoff is an International Retail Holding of South Africa. This South African company has businesses in Asia, Europe, Africa, Australia, and New Zealand. It mainly deals with household goods and furniture.
Instead of a good business reputation, the company made a headline in the business community for a $7.4-million in Accounting and Corporate Fraud. A small group of executives in the company materialized the fraud scheme by overstating the profit.
The group that pleaded guilty of the illegal accounting practice did a $7.4-million irregular transaction to inflate the assets and profits of the group. After the revelation of this famous corporate fraud case, the CEO and other top executives exited the company.
4. Bribery in Undergraduate College Application in 2019
Undergraduate admission processes in the top tier universities are supposed to be fair and straightforward. However, in the middle of 2019, a large scale admission scam was exposed where the parents bribed the athletic coaches to influence the admission of their children.
The U.S. federal Government exfaposed the scam and found the top-ranked schools involved in it. However, neither the students nor the university administration was involved in it. The illegal transaction was between the parents and the athletic coaches.
The parents bribed the coaches with millions to establish the eligibility of their children as a promising athlete. Nevertheless, none of the students involved in this admission fraud were engaged in any professional level sports.
Renowned business leaders like William E. McGlashan Jr. and famous Hollywood celebrities like Lori Loughlin and Felicity Huffman were involved in this bribery. They had spent millions of dollars to represent their children as promising sportsmen falsely.
According to the New York Times report, U.S. Attorney Andrew E. Lelling felt compassion for the real admission candidates, saying, “The real victims, in this case, are the hardworking students.”
5. Medicare Fraud of $1-Billion
How do you feel if a doctor prescribes you medical equipment that you don’t require? Well, the same happens with hundreds or thousands of elderly, and make them pay from their Medicare plan worth around $1-billion.
At least two-dozens of doctors and a few professionals from the medical equipment manufacturing firms were involved in it. These doctors unnecessarily prescribed neck, knee, or back braces to the elderly through call centers in the Philippines and Latin America.
That scammed money was laundered to international shell companies and was used again to buy luxury items like yachts, villas, and exotic cars in the U.S.
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Corporate Fraud cases sometimes make headlines and make us reorganize the management and financial strategies. Knowing about the recent corporate fraud cases may help us to prevent and prepare for any future wrongdoings.
We Had Discussed 5 Corporate Fraud Cases that has shaken the Business World In this Article