This list of the top five mind blowing financial scams will make your blood boil. These nefarious deeds caused many innocent individuals to lose everything. To make matters even worse, some of these scams have had governmental approval while the perpetrators going free. In addition, the full financial ramification of these scams may never be calculated.
Libor price fixing -The London interbank offer rate is the benchmark interest rate for many commercial and mortgage loans. The scam involved traders at banks such as JPMorgan Chase, Citibank, and others. They would change their interest rates giving the impression of adequate solvency. Estimates show that anywhere between $300 trillion to $800 trillion dollars are tied to the Libor rate. This affected you by changing your interest payment on a house, or commercial loan. You should be angry because even a slight increase in your interest rate can significantly raise your monthly interest payment.
Full Tilt Poker – During the boom of Texas No-Limit Poker, Full Tilt Poker was the place for online poker. Poker professionals such as Chris “Jesus” Ferguson, Howard Lederer were at the tables. Unfortunately, Full Tilt owners decided to help themselves to the collected money and not repay the winners. Eventually the federal government stepped in and closed all accounts and all money was frozen. As of now, over $350 million is owed to United States players.
Bernie Madoff – Bernard Madoff started an investment company with $5,000 dollars back in 1960. After gaining positive returns for his clients, Bernie continued to attract well-known individuals. His scheme was simple – attract new investors to pay off old investors. This scheme works until no more investors join and the money stops. At the height of the scam, Bernie controlled over $50 to $65 billion dollars. Today, only a fraction has been reclaimed for investors. Many clueless investors lost their entire life savings to the con-artist who has shown little remorse.
T.A.R.P. – The Troubled Asset Relief Program authorized over $700 billion in tax payer money to banks, Fannie Mae and Freddie Mac, bailing out General Motors, AIG, and various other entities. Many of these bailed out companies had risky loans, poor leadership, and not profitable. Basically, the federal government picked certain companies to rescue while allowing others to fail. This should trouble you because your tax dollars may have to once again bail out insolvent companies.
Federal Reserve – Instituted in 1917 under Woodrow Wilson, the Federal Reserve’s role is: “to promote sustainable growth, high levels of employment, stability of prices to help preserve the purchasing power of the dollar and moderate long-term interest rates.” It has done anything but that. The Federal Reserve has devalued the purchasing power of the dollar by 95%, allowed massive debt, fueled the boom-bust business cycle, eroded away savings, and created worthless paper money. This scam has put the power of the dollar in the hands of a few secret individuals.
Let these scams cause you to question critically anything that seems too good to be true.