Today we look at five well-known cases of financial fraud in recent years.
FTX
The amount involved： more than $8 billion
The famous crypto exchange FTX launched in May 2019, and it filed for bankruptcy last year. As the founder and former CEO of FTX, Bankman-Fried (SBF) has been accused of scams. For many years, SBF and the company he founded, FTX, have built an impressive career in the crypto world, which makes him a billionaire. However, with the collapse of FTX, that all went up in smoke. According to Reuters, the crisis at FTX came after SBF secretly transferred $10 billion of FTX client money to Alameda Research, his proprietary trading firm. At least $8 billion of money is missing. Later on, Bankman-Fried was arrested, but the American federal magistrate later ordered Sam Bankman-Fried released on a $250 million bond.
Black Diamond Capital Solutions
The amount involved：$35，000，000
The “Black Diamond” fraud ran from 2007 to 2010. Keith Simmons and Deanne Salazar worked with other partners to trick clients into investing in foreign exchange markets by running several hedge funds. until their dirty laundry has been aired, 240 clients invested $35 million over several years. Keith Simmons has been charged with fleecing investors in his hedge fund to the tune of $35 million.
Black Diamond Capital Solutions was exposed as a pyramid scheme in which clients’ money was never actually used in the foreign exchange market, giving investors no return.
Keith Simmons and Deanne Salazar were sentenced to 40 years and 4.5 years in prison, respectively, after the CFTC, America’s financial regulator, launched a full investigation into the fraud in 2011.
The amount involved： unknown but massive
FVP Trade is an online forex broker that is a Ponzi scheme. Many traders who invested in the broker had their funds frozen. The broker still uses various methods to keep customers trusting it, such as holding offline seminars and claiming to have received so-called third-party funding. On August 8, 2022, the head of the FVP Trade Representative Office in Quang Binh, Vietnam, was arrested.
Forex-3D
The amount involved：1.9 billion Thai Baht
Thai police revealed the Forex-3D Ponzi scheme in 2019. Forex-3D, a brokerage that offers short-term, high-return products to investors, counts celebrities and government officials among its clients. Fueled by celebrity benefits, thousands of people fell victim to the scam. Famous Thai actress Savika “Pinky” Chaiyadej, her mother Sarinya Chaiyadej, and her elder brother Surayuth Chaiydej were among 19 people arrested for allegedly defrauding people of money via a “Forex-3D scam.” The scam persuades people to invest their money in foreign exchange through the website forex-3d.com, claiming that they will make 60–80% profit on their investment. However, once people invested, they didn‘t get any profits in return as promised. According to the DSI, around 14,000 people were duped into the scam, investing an estimated 1.9 billion baht in total. Thailand’s Criminal Court summoned famous actress “Pinky” and 23 other defendants in the Forex-3D fraud case to court. “Pinky” faces up to 20 years in prison for fraud for her involvement in a Forex-3D “Ponzi” scam.
Oli Capital
The amount involved：$50,000,000
Established in 2018, Oli Capital is an Australian-based financial services company. According to the website of Oli Capital, the company invests in a number of stocks, gold, and hydrogen energy concept projects. Oli Capital recently collapsed, and its CEO is believed to have absconded with the money. In particular, an open letter purportedly from Qi Luo, CEO of Oli Capital, to all investors has brought the issue to the forefront. The letter was aggressive, even provocative, and angered many investors. The issue is still ongoing. We will keep an eye on the situation.