The money that can be obtained through an embezzlement scam that spans years or decades can be massive. When one hears the amounts of money that were stolen in some of these embezzlement crimes, it is difficult to believe that these crimes were not discovered much earlier. These scams often involve companies of different sizes and different dollar amounts, but each case is instructive in that one can see the level of crime that people may attempt.
The examples below are high profile, high dollar embezzlement cases from across the country. Each embezzlement case includes important details about the company and or executive in charge at the time.
First, we note the name of the company that was the victim of the crime, and the possible dollar amount of the crime committed. Next is the position of authority the criminal had at the time of the embezzlement.
Below that are details of the crime that was committed and the violations that were involved. They are listed from the highest to the lowest dollar amount.
#1 Enron - $11 Billion
- Founder, CEO, and Chairman
- Corporate abuse and accounting fraud
The Enron scandal first hit national headlines in October 2011. It was revealed that the 7th largest company in the world was involved in serious corporate corruption and accounting fraud. The embezzlement scandal surrounding Enron included major political implications because the company’s leaders were tied to the White House. The deregulation of the company allowed it it work largely without government oversight. There was serious misrepresentation in earnings reports, and a fake energy crises and serious embezzlement of retirement funds by executives of the company. The corporation went bankrupt and shareholders lost $74 billion. The CEO of Enron, Jeff Skilling received 24 years in federal prison. (american-historama.org).
#2 Stanford Financial Group of Companies - $8 billion
- Owner and CEO
- Major fraud involved in Ponzi scheme, violated US securities laws
If the country did not know the name ‘Bernie Madoff’ so well, Allen Stanford would most likely be known as the most infamous of all Ponzi schemers. His Ponzi scheme was huge. The chairman of the company which was an offshore bank in Anigua, started the 20 year embezzlement scheme. He sold certificates of deposit, pocketed much of the proceeds and used to rest to invest in dangerous real estate deals, his personal businesses and cricket tournaments. He was convicted on 13 of 14 counts by federal prosecutors. (forbes.com).
#3 Clients of Bernie Madoff - Billions of Dollars
- Investment Advisor
- Widespread frauds that squandered the investments of thousands of investors
Bernie Madoff was a highly respected Wall Street financier who was responsible for the largest Ponzi scheme in world history. He defrauded both large and small investors of tens of billions of dollars over 17 years and perhaps longer. Madoff claimed to be generating high steady returns in all markets with ‘split strike conversion.’ But in reality, he put all client funds into one bank account and he used that to pay other clients who wanted to get their cash out. He funded the redemptions by bringing in new investors who were attracted to his status and apparent investing success. But he could not keep the Ponzi scheme going when the financial markets turned south in 2008. Madoff pleaded guilty in 2009 to 11 federal felonies, including wire fraud, embezzlement, mail fraud, perjury and money laundering. He received a 150 year prison sentence with no chance of parole. (Investopedia.com)
#4 Peregrine Financial - $200 million
- Embezzled and reported false income statements
Russell Wasendorf, 64, was convicted in 2013 to 50 years in prison for embezzling more than $215,000,000 in customer funds from his business in the commodity futures business. He was convicted on charges of mail fraud, embezzling of customer funds, and making false statements to the Commodity Futures Trading Commission. He admitted during the trial he stole funds by taking money out from a segregated bank account and then omitted his withdrawals and boosted the balances on fake bank statements. (FBI.gov)
#5 Fry’s Electronics - $65.6 million
- Vice President of Merchandising and Operations
- Used vendor fraud and kickbacks in purchasing electronics inventory for store, including a dummy store he set up
Omino Siddiqui, 45 at the time of his crimes, was convicted in 2008 for embezzling at least $65 million from the company, which is an iconic chain store in Silicon Valley where he was groomed by the Fry family for 20 years. Legal experts said the man’s gambling addiction led to him obtaining aggressive commissions from Fry vendors and used the illegal kickbacks to pay his millions in gambling debts. He was arrested by the IRS in 2008 and fired from his job after an employee told the IRS there were accounting abnormalities in Siddiqui’s paperwork. (Mercurynews.com)
#6 Tenens Corp., dba Essex Street Associates - $61 million
- Chief Operating Officer
- Transferred funds from the trusts of heirs of industrialist Frederick Ayers, whose accounts he was managing, to his own personal accounts. Submitted false financial statements to not raise suspicions.
John Doorly, 60 was charged in 2009 in US District Court with counts of mail fraud and money laundering and faced up to 20 years in prison and a fine of $250,000. He stole the money from the company and spent it on family and friends. He bought three planes, cars, real estate properties and golf memberships by making loans to friends. (wickedlocal.com)
#7 NYC Laborers Sandhogs Union Local 147 - $42.6 million
- Employee Benefits Manager
- Embezzled through employee benefits plan, mostly money laundering
Melissa King, 60, was the administrator for Sandhogs Local 147 and was sentenced to six years in federal prison for stealing $42 million from union bank accounts so she could live like the super rich. Many of the workers had their retirement accounts emptied and have been left nearly penniless. King spent millions on private jets and $1 million in jewelry, as well as other jewelry worth hundreds of thousands of dollars. She spent $7 million on an American Express card and $300,000 on shopping sprees. (NYdailynews.com)
#8 Koss Inc. - $30 million
- Vice President of Finance
- Devised plan to commit wire fraud in order to keep up with compulsive shopping disorder
Sujata Sachdeva, 47, was a highly trusted and respected top executive of the Koss Corporation. But over five years, he stole an astonishing 50% of the firm's’ pretax earnings. The embezzlement scheme was found out when American Express noticed the woman’s credit card balances were being paid via large wire transfers that were coming from the company’s bank account. The criminal case concluded when she pleaded guilty to stealing $30 million. She received 11 years in prison and had to pay $34 million restitution. (accountingweb.com)
#9 First Security Bank of Malta- $3.7 million
- Vice President of Operations
- Created fraudulent credit cards at bank to cover personal debts
One of the biggest bank fraud cases in Montana ended in 2012 when Rhonda Lee DeVries was convicted of embezzlement after 10 years of complex credit card transactions that led her to steal nearly $4 million. DeVries received three years of probation and must pay back $3.8 million. (Billingsgazette.com)
#10 Dane Cook- Millions of Dollars
- Business Manager and brother
- Used position as brother and manager to steal through larceny, forgery, and embezzlement.
The half brother of celebrity Dane Cook pleaded guilty in 2010 to embezzling millions of dollars from the popular comedian while he worked as his business manager. He was sentenced to five to six years in federal prison. Darryl McCauley, 45, stole the money from the entertainer’s business and personal accounts between 2004 and 2008 and transferred them into his accounts. He also forged a $3 million check. (Boston.com)
#11 Woodruff Arts Center - $1.48 million
- Accounts Receivable employee
- Created company and assigned it a vendor number, and turned in invoices for it regularly
A low level accounts receivable employee stole $1.4 million five years from the largest cultural organization in Atlanta. The name of the employee was not released, but the money was stolen by submitting invoices for work that was never done. (Ajc.com).
All of the above criminals were eventually charged with embezzlement and received extensive prison sentences. In some of the most severe embezzlement cases, they received state prison sentences in excess of 100 years. This is how serious embezzlement crimes are considered.
These criminals did not merely receive state and federal prison sentences. Most of them were required to pay retribution, which means to pay back all of the money they stole from those it was stolen from. This allows the court handling the case to freeze all assets the criminal has or may have in the future.
This listing of high profile embezzlement cases should help you to understand the large dollar amounts that can be involved in this serious state and federal crime. Embezzlement crimes can be carried out by anyone from a CEO to accountant to a mere accounts receivable worker.
- Half Brother Guilty of Stealing Millions of Dollars from Dane Cook. (2010). Retrieved from http://archive.boston.com/news/local/massachusetts/articles/2010/10/14/half_brother_guilty_of_stealing_millions_from_dane_cook/
- Enron Scandal Overview. (n.d.). Retrieved from http://www.american-historama.org/1990-present-modern-era/enron-scandal.htm
- Peregrine Financial Group CEO Sentenced to 50 Years. (2013). Retrieved from https://archives.fbi.gov/archives/omaha/press-releases/2013/peregrine-financial-group-ceo-sentenced-to-50-years-for-fraud-embezzlement-and-lying-to-regulators
- Allen Stanford Convicted in $7 Billion Ponzi Scheme. (2012). Retrieved from https://www.forbes.com/sites/nathanvardi/2012/03/06/allen-stanford-convicted-in-7-billion-ponzi-scheme/#64ff87755388
- Ex-Frys Exec to Serve Six Years for Kickback Scheme. (2012). Retrieved from https://www.mercurynews.com/2011/12/08/ex-frys-exec-to-serve-6-years-for-kickback-scheme/
- Bernard Madoff Scandal. (n.d.). Retrieved from https://www.investopedia.com/terms/b/bernard-madoff.asp
- Melissa Rich Gets 6 Years in Prison for Stealing Sandhogs Union Money (2010). Retrieved from https://www.nydailynews.com/new-york/administrator-melissa-rich-6-years-prison-stealing-42-million-sandhogs-union-accounts-article-1.1100292
- How an Embezzler Stole Millions from a Small Company. (n.d.). Retrieved from https://www.accountingweb.com/aa/law-and-enforcement/how-an-embezzler-stole-millions-from-a-small-company
- Malta Bank Officer Sentenced in Embezzlement Case. (2012). Retrieved from https://billingsgazette.com/news/state-and-regional/montana/malta-bank-officer-sentenced-in-embezzlement-case/article_1fcd0c26-a300-5f05-8d19-5c2b0bc1d5ff.html