Exploring Global Issues: Financial Crimes

The spread of financial crimes committed over the years.

Financial crimes are a huge problem in corporate America. The problem is that people of power, or even people that want to gain power, take advantage of citizens and the money they possess. There are many famous cases, like the Bernie Madoff case, in which people have gotten extremely wealthy off corruption and large financial crimes. There are also some smaller cases, like the Wendy Beauchat case, in which people got wealthy in our area of Adams County. Some of the main financial crimes include different kinds of fraud, embezzlement, identity theft, tax evasion, bribery, inside trading, money laundering, and many other types of financial crimes. Examples of fraud are insurance fraud, corporate fraud, securities fraud, mortgage fraud, credit fraud, and many more. Fraud is the wrongful deception intended to result in personal gain.

The prosecutions of financial crimes have begun to drop during the Obama administration.

The most common type of fraud in the United States is money laundering. Money laundering is the process of taking money that was gained illegally and make it seem as if the accusation of this money was legal. Often times, this money comes from illegal transfers from other countries or legitimate businesses. The criminal will then take this illegal money and put it into their bank accounts, businesses or assets in order to help it look like a legal means of profit. The criminal hides these transactions from government and policing agencies.

Fraud/Theft was the third most common crime in America in 2009.

One of the most incredible financial crimes ever was the case of Bernard “Bernie” Madoff. Famous pictures of Madoff in handcuffs have been the epitome of crime on Wall Street that have caused problems leading up to the 2008 Depression. Bernie Madoff is infamous for his Ponzi scheme that was worth about 64 billion dollars. A Ponzi scheme is a form of fraud in which the investors believe the business is successful because of quick returns on investments that is actually money from later investors. Bernie Madoff was found guilty for his crimes in 2009 and sentenced to 150 years of prison and a restitution of about 170 billion dollars. The incredible part about this Ponzi scheme is how long it lasted without anybody finding out about it. First of all, there is no way that one man could run such a large operation by himself. Bernie Madoff obviously had help, but nobody knew who exactly was helping him. Through further investigation, it was discovered that Bernie Madoff was working directly with one of the largest banks in the world: JP Morgan. JP Morgan was using their broad spectrum of power to help Bernie Madoff conceal his illegal Ponzi scheme and stay working on this awful, but genius, form of fraud.

Bernie Madoff getting arrested in 2008.

Another form of fraud that has been used in the past is embezzlement. Embezzlement is the “fraudulent taking of personal property by someone to whom it was entrusted,” according to the Legal Information Institute in the Cornell Law School. This awful form of stealing and fraud has even happened close to home in Adams County. There is a big case that was resolved in the last year, in which Wendy Beauchat, a mother and lawyer in Gettysburg, PA, embezzled over 6 million dollars from her investors. She embezzled the money from a group of elderly people. Financial crimes are often overlooked by governments and are a problem in society. These crimes give evil businessmen and other people profit by stealing and other fraudulent ways in getting somebody else’s money or assets. Two of these awful crimes are money laundering and embezzlement. We have no room for financial crimes in America.