Learn more about financial crimes such as fraud, money laundering, and Ponzi schemes, and what you can do to avoid them.
Frequently Asked Questions
  • What happened to Enron?

    After years of logging expected profit as realized profit and using special purpose vehicles (SPVs) to move debt and losses off its balance sheet, Enron found itself subject to an SEC probe in October 2001 and filed for Chapter 11 bankruptcy on Dec. 2, 2001. Between 2004 and 2011, the reorganized Enron paid creditors about $21.7 billion.

  • How are cryptocurrencies used to launder money?

    Cryptocurrencies have attracted the scrutiny of the U.S. Financial Crimes Enforcement Network (FinCEN) for their utility in money laundering. FinCEN noted in a June 2021 report that criminals making illegal transactions or transferring dirty money with cryptocurrencies can use mixers or tumblers to obscure the connection between the sender and recipient of crypto. Cryptocurrency networks are particularly useful for money laundering due to their global nature, decentralization, and under-regulation.

  • What did Bernie Madoff do?

    Bernie Madoff operated a simple but large Ponzi scheme. He used his Wall Street connections and reputation to attract high-net-worth clients, whose investments he promised to manage. But instead of investing their money, he’d put it in a bank account that generated nearly no return. When a client wanted to cash out, he simply withdrew their initial investment plus a respectable “return” that was actually just a portion of another client’s investment. The scheme collapsed when clients scrambled to cash out at the onset of the 2008 financial crisis.

  • What does ‘cook the books’ mean?

    Cook the books is a slang term for accounting fraud, which is the act of manipulating a company’s financial results to inflate revenue and/or deflate expenses.

Key Terms

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