Fraud at work.

Newman Noggs said:
I believe there was a guy at an American motor manufacturer who took a huge bung to commit the company to a sponsorship deal on non-commercial terms with a company operating outside the US in a country where they hardly did any business. The guy got paid off, of course, but that sponsorship deal had to run its course.
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Wasn’t a football club in the north west of England by any chance was it?
 
Many years ago, when I worked in the world of accountancy, one of our biggest clients was a large stockbroker. The senior partner was very wealthy, with an estate in Cheshire, chauffeur-driven Rolls & all the other trappings of vast wealth. He was also one of the leading figures in the Equestrian world, one of the judges who Harvey Smith famously gave a v-sign to when they marked him down. All in all very much a member of the Establishment. As, an example, he'd be in the Royal Enclosure at Royal Ascot every year, flying there by helicopter from the roof of the Dorchester, where he had a suite.

Most of the staff were great but there was a small group of arseholes who were responsible for ensuring all the trades were recorded correctly. They had the first computerised accounts I'd come across, with all the transactions on that old, lined computer print-out paper you used to get. 2 of us were on it full-time with others called in as we needed help.

Getting to the end of the audit and it was just the two of us and we both had the feeling that there was something not quite right and that the arsehole group were taunting us. We'd done all the work we needed to but still had a few days left so Martin, the audit senior, suggested we looked through some of the senior partners personal expense accounts,of which there were loads. I picked up the binder of computer output that contained some of these and something caught my eye.

There was an account that was supposedly for the expenses connected with his horse boxes and there really shouldn't have been much going through it. But there was transaction after transaction comprising an eye-watering amount, into six figures (this was 1980 so well over £1m in today's money). Clearly something going on so we traced these transactions back to where they'd originated from, which was a suspense account where they'd normally put share trades there was some dispute over and hadn't been settled. It was all computerised so relatively easy to trace everything but we had to be careful not to arouse suspicion. Many of the trades were linked to a specific figure, a member of a well known banking family working as a fund manager at a merchant bank. Another very Establishment figure.

In the end, we cornered the company accountant, who got his job via our senior partner, was pretty new to the firm and probably got treated like shit by their senior partner. He spilled the beans and told us that the fund manager knew what shares his firm were going to buy, in such quantities that the price would naturally go up. He bought some privately in advamce, via our client, made a nice profit which was then siphoned off into this private account. This was used to pay for the Royal Ascot trips and distribute large amounts of cash.

We had to report back to our own firm and alert them there was a problem and then spent the last few days at the client, keeping out of the way and going for long boozy lunches. Naturally the arsehole group had been putting all these transactions through so it was now clear why they were taking the piss. We took great delight in being extremely nice to them.

Some time later the Stock Exchange banned all the traders from dealing, which effectively shut them down. Turned out that this wasn't the only dodgy stuff they were doing. Turned out that the fund manager was all for coat and no knickers and a living well behind his means, hence why he ended up insider trading. He lost good job of course & ended up blowing his brains out. Even that turned into a court case as he did that the night his life insurance policy expired and the insurance company tried to avoid paying out on the grounds he'd killed himself after midnight, when the policy was no longer in force. They lost and the woodies got the payout.

The senior partner of the stockbrokers was ruined for what was, for him, pin money. He ended up having a severe stroke and was in pretty much a vegetative state for the rest of his days. It was the first big insider trading scandal and mainly came to light because we had a few days to kill on the audit.
 
Prestwich_Blue said:
Many years ago, when I worked in the world of accountancy, one of our biggest clients was a large stockbroker. The senior partner was very wealthy, with an estate in Cheshire, chauffeur-driven Rolls & all the other trappings of vast wealth. He was also one of the leading figures in the Equestrian world, one of the judges who Harvey Smith famously gave a v-sign to when they marked him down. All in all very much a member of the Establishment. As, an example, he'd be in the Royal Enclosure at Royal Ascot every year, flying there by helicopter from the roof of the Dorchester, where he had a suite.

Most of the staff were great but there was a small group of arseholes who were responsible for ensuring all the trades were recorded correctly. They had the first computerised accounts I'd come across, with all the transactions on that old, lined computer print-out paper you used to get. 2 of us were on it full-time with others called in as we needed help.

Getting to the end of the audit and it was just the two of us and we both had the feeling that there was something not quite right and that the arsehole group were taunting us. We'd done all the work we needed to but still had a few days left so Martin, the audit senior, suggested we looked through some of the senior partners personal expense accounts,of which there were loads. I picked up the binder of computer output that contained some of these and something caught my eye.

There was an account that was supposedly for the expenses connected with his horse boxes and there really shouldn't have been much going through it. But there was transaction after transaction comprising an eye-watering amount, into six figures (this was 1980 so well over £1m in today's money). Clearly something going on so we traced these transactions back to where they'd originated from, which was a suspense account where they'd normally put share trades there was some dispute over and hadn't been settled. It was all computerised so relatively easy to trace everything but we had to be careful not to arouse suspicion. Many of the trades were linked to a specific figure, a member of a well known banking family working as a fund manager at a merchant bank. Another very Establishment figure.

In the end, we cornered the company accountant, who got his job via our senior partner, was pretty new to the firm and probably got treated like shit by their senior partner. He spilled the beans and told us that the fund manager knew what shares his firm were going to buy, in such quantities that the price would naturally go up. He bought some privately in advamce, via our client, made a nice profit which was then siphoned off into this private account. This was used to pay for the Royal Ascot trips and distribute large amounts of cash.

We had to report back to our own firm and alert them there was a problem and then spent the last few days at the client, keeping out of the way and going for long boozy lunches. Naturally the arsehole group had been putting all these transactions through so it was now clear why they were taking the piss. We took great delight in being extremely nice to them.

Some time later the Stock Exchange banned all the traders from dealing, which effectively shut them down. Turned out that this wasn't the only dodgy stuff they were doing. Turned out that the fund manager was all for coat and no knickers and a living well behind his means, hence why he ended up insider trading. He lost good job of course & ended up blowing his brains out. Even that turned into a court case as he did that the night his life insurance policy expired and the insurance company tried to avoid paying out on the grounds he'd killed himself after midnight, when the policy was no longer in force. They lost and the woodies got the payout.

The senior partner of the stockbrokers was ruined for what was, for him, pin money. He ended up having a severe stroke and was in pretty much a vegetative state for the rest of his days. It was the first big insider trading scandal and mainly came to light because we had a few days to kill on the audit.
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Wow...job well done or regrets..??
 
Tuearts right boot said:
Wow...job well done or regrets..??
Click to expand...
It was extremely sad that some great people lost their jobs. But not in the case of the three or four arseholes. And not the arrogant senior partner, who thought he was so high and mighty. But even then, nobody really deserves the fate he suffered. I also felt sorry for the guy who killed himself, and his family. He must have been under awful pressure.

But I'd be lying if said I didn't have a great sense of satisfaction that we'd finally cracked open what was going on.
 
Prestwich_Blue said:
Many years ago, when I worked in the world of accountancy, one of our biggest clients was a large stockbroker. The senior partner was very wealthy, with an estate in Cheshire, chauffeur-driven Rolls & all the other trappings of vast wealth. He was also one of the leading figures in the Equestrian world, one of the judges who Harvey Smith famously gave a v-sign to when they marked him down. All in all very much a member of the Establishment. As, an example, he'd be in the Royal Enclosure at Royal Ascot every year, flying there by helicopter from the roof of the Dorchester, where he had a suite.

Most of the staff were great but there was a small group of arseholes who were responsible for ensuring all the trades were recorded correctly. They had the first computerised accounts I'd come across, with all the transactions on that old, lined computer print-out paper you used to get. 2 of us were on it full-time with others called in as we needed help.

Getting to the end of the audit and it was just the two of us and we both had the feeling that there was something not quite right and that the arsehole group were taunting us. We'd done all the work we needed to but still had a few days left so Martin, the audit senior, suggested we looked through some of the senior partners personal expense accounts,of which there were loads. I picked up the binder of computer output that contained some of these and something caught my eye.

There was an account that was supposedly for the expenses connected with his horse boxes and there really shouldn't have been much going through it. But there was transaction after transaction comprising an eye-watering amount, into six figures (this was 1980 so well over £1m in today's money). Clearly something going on so we traced these transactions back to where they'd originated from, which was a suspense account where they'd normally put share trades there was some dispute over and hadn't been settled. It was all computerised so relatively easy to trace everything but we had to be careful not to arouse suspicion. Many of the trades were linked to a specific figure, a member of a well known banking family working as a fund manager at a merchant bank. Another very Establishment figure.

In the end, we cornered the company accountant, who got his job via our senior partner, was pretty new to the firm and probably got treated like shit by their senior partner. He spilled the beans and told us that the fund manager knew what shares his firm were going to buy, in such quantities that the price would naturally go up. He bought some privately in advamce, via our client, made a nice profit which was then siphoned off into this private account. This was used to pay for the Royal Ascot trips and distribute large amounts of cash.

We had to report back to our own firm and alert them there was a problem and then spent the last few days at the client, keeping out of the way and going for long boozy lunches. Naturally the arsehole group had been putting all these transactions through so it was now clear why they were taking the piss. We took great delight in being extremely nice to them.

Some time later the Stock Exchange banned all the traders from dealing, which effectively shut them down. Turned out that this wasn't the only dodgy stuff they were doing. Turned out that the fund manager was all for coat and no knickers and a living well behind his means, hence why he ended up insider trading. He lost good job of course & ended up blowing his brains out. Even that turned into a court case as he did that the night his life insurance policy expired and the insurance company tried to avoid paying out on the grounds he'd killed himself after midnight, when the policy was no longer in force. They lost and the woodies got the payout.

The senior partner of the stockbrokers was ruined for what was, for him, pin money. He ended up having a severe stroke and was in pretty much a vegetative state for the rest of his days. It was the first big insider trading scandal and mainly came to light because we had a few days to kill on the audit.
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If often happens this way. You pick up on stuff when you are not really looking for it. I'm pretty sure most financial fraud is discovered by accident.

Once I'd fallen across the scam I ended up sifting through reams and reams of 15"x11" green bar continuous print when I was digging through the accounts looking or anomalies. It's almost always easier to spot patterns in the physical printouts.

I've done a bit of financial auditing as an aside in my current job. Not big corporate stuff, just charitable funds. A lot of the time folk tend to try and use their own DIY Excel spreadsheets to run their cashbooks, but I always preferred they used hard copy ledger. With Excel, you can always slip in some cheeky calculation into one of the cells or a macro to make it appear like it all adds up at first glance. Because it's a computer you almost get lulled into thinking it isn't wrong.
 
I worked in The City when I first moved to London. A fund manager took a shine to me after I did some laborious work for him and took me out on the piss after work. He paid for everything. He began to open up after champagne and gave me advice about how to succeed. I could sense he’d kissed arses and schmoozed his way through with pathetic Mockney schtick (he was from rural Essex) but there was something deeper too. I suspect he’d carried out unethical and borderline illegal practices to make money on the side and I wanted nothing to do with it. I was glad for redundancy. It’s a vile industry.
 
I heard about this guy who inherited a load of cash but through bullshitting about his business prowess would get other investors to take all the risks in his projects. The projects usually failed and the investors would lose all their money. This guy would use the business losses to offset his personal taxes and as a result didn’t pay tax for years. He also used to employ illegal immigrants so he could pay well under the market rate and wouldn’t pay contractors unless they sued him which they usually didn’t. He also conned a bank into lending him so much money that they couldn’t afford to foreclose without damaging the bank. It gets much worse.
 
west didsblue said:
I heard about this guy who inherited a load of cash but through bullshitting about his business prowess would get other investors to take all the risks in his projects. The projects usually failed and the investors would lose all their money. This guy would use the business losses to offset his personal taxes and as a result didn’t pay tax for years. He also used to employ illegal immigrants so he could pay well under the market rate and wouldn’t pay contractors unless they sued him which they usually didn’t. He also conned a bank into lending him so much money that they couldn’t afford to foreclose without damaging the bank. It gets much worse.
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Ah, you've met Mr Trump then?
 
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