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Few crimes pay off better for corrupt financiers and CEOs like embezzlement. This form of financial fraud is well-used by the heads of companies and financial institutions. Historical Cases of Embezzlement have shocked the world, with dozens of these scandals marking our history books.
What is embezzlement? Investopedia says it is the “misappropriation of funds by a financial advisor or corporate executive.” This trusted financial figurehead intentionally misuses the assets lent to their care and uses them for personal gains.
Private jets, mistresses, and secret bank accounts are just the tip of the iceberg.
Look at this list of the 14 most shocking embezzlement scams in history.
1. The Girl Scout Organization ($300,000+)
1. The Girl Scout Organization ($300,000+)It is not the biggest case of embezzlement on this list. Still, the world was stunned when it discovered that the Girl Scouts of America was dealing with dozens of embezzlement cases. Yaasmin Hooey, a former Girl Scout finance director, embezzled around $310K from the organization. Another executive later pleaded guilty to embezzling $370K from the Girl Scouts. Over the years, it’s been thought that members of the Girls Scouts organization and their related branches have stolen millions of dollars.
2. Woodruff Arts Center ($1.48 Million)
In 2014, the Woodruff Arts Center made the history books when an employee was convicted of embezzling from the organization. Over five years, Ralph Clark stole money from the community arts center by submitting bogus expense invoices to the Woodruff Arts Center. These included inflated invoices from his wife, who set up a fake cleaning company. The company helped her husband embezzle more than $1.4M from the Atlanta arts center.
3. Charles Ponzi ($10 Million)
The first Ponzi scheme happened in 1920 when American Charles Ponzi originated the scam. Ponzi purchased postal vouchers in one country and shipped them abroad for a modest profit. He soon took the idea to investors. He sold them the scheme with the promise of a 50% return. Initial investors were paid with money from new investors. When he was discovered, Ponzi fled the country. It’s estimated he made $10 million on the scheme. Charles Ponzi inspired characters like Bernie Madoff decades later.
4. First National Bank of Chicago ($20 Million – $70 Million)
In 1988, the FBI thwarted the biggest case of near-embezzlement in U.S. history. Charges were filed against four First National Bank of Chicago employees when their plan to transfer $70M to dummy accounts was revealed. The four would-be embezzlers were almost successful. When Merrill Lynch discovered $20M missing from their account, they made a report. The FBI ended the scam at the First National Bank of Chicago before the money could be embezzled.
5. Koss Inc. ($30 Million)
No one was more respected at the Koss Corporation than Sujata Sachdeva. The 47-year-old executive was trusted and had a strong reputation in the organization. That ended when it was revealed that she had embezzled more than $30 million from the company. The crime was discovered when American Express flagged a credit card belonging to Sachdeva. After her conviction, Sachdeva was sentenced to 11 years and restitution of more than $34 million.
6. NYC Laborers Sandhogs Union Local ($42.6 Million)
Melissa King lived a super-luxe lifestyle until she was sentenced to 6 years in federal prison for embezzlement. King, the NYC Sandhogs Local Union administrator, funded her lifestyle through stealing. As head of the union, she embezzled more than $42 million out of retirement accounts belonging to union members (leaving them penniless). King spent the money on expensive jewelry, private jets, and a whopping $7 million credit card bill.
7. Tenens Corporation ($20 Million)
In 2009, John Doorly earned himself a spot in the history books when he embezzled $20 million from the Tenens Corporation. While acting as their COO, Doorly took millions from the corporation’s bank accounts and used them for personal purposes. This included paying for mistresses and private jets and purchasing houses and cars for family and friends. Doorly was convicted of the scam and sentenced to 17 years in prison.
8. Fry’s Electronics ($87 Million)
Fry’s Electronics was a well-known chain in Silicon Valley. In 2008, it made headlines for an embezzlement scandal. Omino Siddiqui, the vice president of merchandising for Fry’s Electronics, was arrested by the IRS for embezzling more than $87 million. Sidiqqui did it by inflating the commissions he received from vendors and offering kickbacks. Most of it paid for his outrageous casino debts. In 2008, Sidiqqui took a 6-year plea deal and agreed to pay $65 million in restitution to his victims.
9. Day-Lee Farms ($100+ Million)
In 1997, Day-Lee Foods CFO Yasuyoshi Kato broke U.S. records. It was discovered he embezzled the single largest amount of money stolen from an employer. Kato was the only employee with access to the Japanese-owned company’s bank accounts. He wrote modest checks to himself and hid his crimes for many years. The company’s location in California, however, attracted the eye of the IRS. Anomalies were noted, and Kato was discovered. He was sentenced to serve time in a California jail.
10. Peregrine Financial ($215 Million)
Russell Wasendorf was a powerhouse in the commodity futures business. His clients trusted his company, Peregrine Financial, with their assets and futures. They were devastated when Wasendorf stole $215 million from them. The finance mogul was tried and convicted in 2013 for embezzling customer funds and making false statements to the Commodity Futures Trading Commission. Wasendorf committed his crimes using fake bank statements and collecting money from segregated accounts.
11. Robert Vesco ($224 Million)
In 1971, Detroit-born Robert Vesco was given control of the Swiss-based Investors Overseas Services (IOS). The group ran and sold funds that were invested into other funds. Vesco looted these funds for his personal use. He embezzled more than $224 million from the organization in just one year. The SEC launched a lawsuit against Vesco, but he fled to Cuba, which refused to extradite him. Vesco never faced justice for his crime and died in 2007 under mysterious circumstances.
12. Stanford Financial Group ($8 Billion)
Allen Stanford was a leading financier. The world was shocked when Allen, CEO of Stanford Financial Group, was convicted of 13 counts of financial fraud. The head of the financial group became a historic criminal, however. It was revealed Stanford embezzled more than $7 billion through an elaborate Ponzi scheme involving an offshore bank in Antigua. Stanford’s crimes harmed millions of people. He was sentenced to 110 years in prison and currently serves in Florida.
13. Enron ($11 Billion)
Enron was the 7th largest company in the world when its embezzlement scandal made international headlines. Executives of the company, with ties to political figures, had worked together to embezzle the retirement funds of employees. Worse, they faked energy crises and misrepresented their earnings reports seriously. The shareholders of Enron lost $74 billion in the scandal, and the CEO of Enron, Jeff Skilling, was sentenced to 24 years in federal prison.
14. Bernie Madoff ($ Billions)
In terms of embezzlement cases, there are few more infamous than Bernie Madoff. The respected Wall Street financial advisor was charged in 2008 when the economic downturn revealed his crimes. Madoff claimed he made millions for his clients with “split strike conversion.” It was a lie. Client funds were being put into one bank account to pay other clients and maintain Madoff’s lifestyle. In 2009, Madoff pleaded guilty to embezzlement charges (among others) and was sentenced to 150 years in prison.
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