White-collar crime has once again sparked attention following the sentencing of Sam Bankman-Fried to 25 years in prison by a judge on Thursday (March 28, 2024) for his role in one of the largest financial crimes in U.S. history.
Bankman-Fried was found guilty in November on seven counts of fraud totaling $8 billion from customers of the FTX cryptocurrency exchange, conspiracy, money laundering, and other conspiracy charges related to fraud in commodities and securities.
Even Bankman-Fried faced a potential sentence of up to 110 years in prison based on federal sentencing guidelines, prosecutors asked Judge Lewis Kaplan to impose a sentence of between 40 and 50 years for what they described as "historic fraud."
In addition to Bankman-Fried's case, there have been several other prominent white-collar fraud cases.
From notorious corporate frauds to high-level financial crimes, these have left long-lasting impacts on the United States.
The Enron scandal remains one of the most famous corporate fraud schemes in history. In the late 1990s and early 2000s, Enron was considered one of the most innovative and successful companies in gas, electricity, and communications. However, it was later revealed that Enron had manipulated its accounting practices to conceal massive debts and losses.
Next, the infamous Ponzi scheme by Bernie Madoff that lasted for decades, resulting in thousands of victims and causing significant financial losses in the United States.
This scheme began to unravel when the financial crisis occurred in 2008. As investors clamored to withdraw their funds, Madoff could no longer sustain the charade.
Additionally, in the early 2000s, Tyco International, a global leader in the manufacturing industry, with a reputation for innovation and success. However, in 2002, the company became embroiled in a scandal that exposed significant corporate corruption and embezzlement.
The scandal involved CEO Dennis Kozlowski and his accomplice Mark Swartz, who were found guilty of stealing hundreds of millions of dollars from the company through fraudulent means.
The Tyco International scandal had a significant impact on the manufacturing industry and corporate governance as a whole. It highlighted the need for increased transparency and accountability in corporate practices, as well as the importance of strong codes of ethical behavior.