With the recession unraveling nearly four times as many Ponzi schemes as 2008, “Ponzi” turned into an active buzzword once again. According to an AP analysis of scams in 50 states, tens thousands of investors watched more than $16 billion go up in smoke resulting in many losing life savings. Even though the frequency was greater than 2008, total losses were lower mainly since Madoff was arrested in December 2008. In all, 150+ schemes collapsed in 2009 with 40 subcoming in 2008 ranging in size from a few hundred thousand dollars to the $7 billion international banking scheme by Stanford as well as Florida Attorney Rothstein’s $1.2 billion scheme, even though both have pleaded not guilty. While enforcement efforts have ramped up, the reason for the incresed detection is the devastation that has occurred in the financial system. While schemes are sometimes partially legitimate, they are most often completely fictional with no reserve fund for when investors start demanding return of funds.
Of 3,037 organizations from 54 countries around the globe participating in a survey, approximately 30% have become victims of economic crime during the previous twelve (12) months. Of these victims, 43% stated that “incidences of fraud” in their companies had increased during the period.
For further information, please refer to the “Fraud Prevention” page.
The measure that was approved last week by the House Financial Services Committee to change “Sarbox” audit rules will lead to a higher incidence of fraud and an increase in fraud related losses according to the world’s largest anti-fraud organization headquartered in Austin, Texas.
Please refer to the Fraud Prevention page for further information as well as access to the “press release”.
As the featured energetic speaker at the Youngstown/Warren Regional Chamber’s Governmental Affairs Council meeting, which I attended, Ohio Auditor of State, Mary Taylor discussed the serious problem of fraud and the State’s determination to monitor spending of funds including nearly $8.0 billion in federal stimulus money.
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Please Click Here to Review the Complete Summary of this Special Report: Worker, Homeownership & Business Assistance Act of 2009