Unfortunately, the world is not without large-scale financial scandals which were derived by individuals or companies with the intention of making more money at the expense of many others.

White-collar crimes feature some common practices such as forging, bribes to false licenses. Furthermore, they use their position to influence others into enhancing their wealth either through a shortcut or mispractice.

Ponzi Scheme

During the early stages of the 1920’s, Charles Ponzi – an Italian businessman who operated several businesses in the US and Canada become notorious for misleading people to invest with lucrative promises and providing returns through an unsustainable business model.

At the height of the Ponzi scheme, he was promising investors of the businesses a profit on their initial investment after 45 days.

At first, the scheme was derived to be successful and once potential investors discovered that the scheme was working, they quickly reinvestment their returns or additional money.

However, the business model did not follow good business practices whereby it was using money from new investors to pay a profiting return to old investors whilst Ponzi was taking a cut.

At one point, he was making $250,000 a day but once the scheme collapsed, a total loss of $20 million was reported and Mr Ponzi was imprisoned for the crime but his scheme has been used again.


One of the most famous bankruptcy cases occurred in 2001 when a merger when horribly wrong for Enron and resulted in the large energy tycoon to file for bankruptcy.

Once proceeding has been scrutinised, Enron was guilty of multiple crimes including money laundering and obstruction of justice for which many top executives were prosecuted.

Pyramid Schemes

Commonly confused with the Ponzi scheme due to their similarities and unsustainability in the long-term which caused people to lose their investments.

Following the mispractice of Pyramid Schemes, they are now considered illegal, however, these schemes do appear from time to time.

Pyramid schemes revolve around the basis whereby without offering products or services, they ask ‘investors’ to attract more customers and the ‘investors’ receive a fraction of the profit made.

Originating from Albania, there were pyramid schemes which returned three times the investment within a 3 month period. However, they are a quick scheme to make money and are unsustainable meaning that the most recent investors lose out which saw peoples assets and life savings disappear.

Wells Fargo Bogus Loans

In 2016, a US high street bank was reported to have spent the previous 5-years creating false accounts in the form of credit applications in order to rack up over $2 million in fees. Once this initial scandal was revealed, Wells Fargo was forced to pay $185 million in fines and ordered to make substantial changes to its practices and internal rules.

The ordeal is far from concluded with many bankers facing prosecutions, lawsuits and ongoing investigations whereby only in August 2018 was it revealed that the bank had stopped 400 customers to amend them mortgages, blaming an online glitch which resulted in the bank foreclosing and seizing every property.

PPI Scandal

Payment Protection Insurance was a devised type of insurance to help people keep up with their payments if their circumstances would prevent them from being able such as unemployment.

The scandal happened when many customers were mis-sold the insurance policy when it was unsuitable, unaware it was optional or were not informed it was being sold. This practice affected all types of loans and forms of credit.

In January 2011, when PPI was discovered to not provide any additional benefit, therefore, many financial institutions were forced to pay back the money from mis-sold policies.

Some policies were initiated 30 years ago, meaning many people are unaware that they were mis-sold a policy, so the government is encouraging people to inquire if they can claim mis-sold PPI. The final date to make a claim on the PPI scandal is 29th August 2019.

Most the crimes highlight involve a company purposely lying about a product or service to enhance their profits. Various scandals are still ongoing including the PPI and Wells Fargo which still could result in implications to existing customers.