Fraud Fraud Fraud – Tasty Courses for Lawyers
It tends to be the case that when things start to fall apart it becomes clear that cracks have only been papered over; or to coin most commentators’ phrase of the moment, "when the tide goes out you can see who has been swimming naked". Indeed following the Madoff scandal, two more fraudulent schemes of similar structure have apparently been unsurfaced in the States. Florida investor, Joseph Forte, 53, routinely lost money, withdrew millions of dollars in personal fees (sounds …
It tends to be the case that when things start to fall apart it becomes clear that cracks have only been papered over; or to coin most commentators’ phrase of the moment, "when the tide goes out you can see who has been swimming naked".
Indeed following the Madoff scandal, two more fraudulent schemes of similar structure have apparently been unsurfaced in the States. Florida investor, Joseph Forte, 53, routinely lost money, withdrew millions of dollars in personal fees (sounds like a regular money manager so far), and he also used recent investors’ contributions to repay earlier backers (therein lies the difference). Richard Piccoli, an 82-year-old, ran a similar scheme through his companies, Gen See Capital Corp and Gen Unlimited having raised most of his money from local New York clergy!
Although no large scale frauds have yet been exposed in the UK during this financial crisis, lawyers over here believe it is only a matter of time. Incidents of fraud typically increase during a the hard times as management, investors, regulators and creditors begin scrutinising companies operations more closely. With legitimate businesses collapsing by the day and losses still mounting up in the financial industry, many will not be surprised if something pops up before long.
Whilst that is no fun for investors and regulators, there will doubtless be work for law firms as interested parties pick over the pieces. So naked swimmers watch out, the big fish will be circling…
January 13, 2009
Even if something comes up, Bernie really has topped the charts with this one.
January 13, 2009
suckers, have they never heard of due diligence
January 13, 2009
clearly not
January 13, 2009
good times for litigators
January 13, 2009
Fraud is just a small piece of the pie. When everything unravels you’d be amazed at the errors that come out of corporate deals. If things don’t work out, where corners have been cut on a rush job (in my corporate experience – when is it not a rush job), gaping holes appear. In to which jump the litigators of this world.
January 13, 2009
Why thank you for discussing this. Am a bit obsessed by the proliferation of Ponzi schemes and how they are (in some cases) relationship based. The Joseph S. Forte fascinates me and can’t wait to see this client list – Madoff’s is conveniently put together by WSJ online….will have to follow you on my blob
http://justsnarky.blogspot.com/
January 19, 2009
I think you are thinking like sukrat, but I think you should cover the other side of the topic in the post too…