Zack Childress guidelines explains the real estate scandals recorded in the history in this article.
1.The Enron Company
It is located at Texas was started in the year in 1985 which was filed under bankrupt in 2001. The corporation was considered to be one among the 5 largest audit companies and later it got renamed as one of the biggest company that faced an audit failure. The SEC commenced its investigation procedures and accepted to sign a deal with the company which later failed on December 2, 2001. The assets possessed by the bank were 64 billion worth. The financial statements confused the analysts, economists and investors which led to the downfall of the company. The former president of the country was sentenced imprisonment for 24 years.
2.The Ponzi scheme
It is a fraudulent operation where income is generated through the new investors and the collected revenue is paid to senior investors.
3.How it worked?
The promoter takes all the money once he gets all the invested money. The scheme stops or halts temporarily when the revenue generated slows down as high returns are required throughout. The activity recorded worth 65 billion became widely popular which happened in the year 2008 and was given a 150 year imprisonment.
An investment bank Lehman which had accumulated assets for 600 billion worth faced a bankrupt on September 15, 2008 and it is considered to be one of the largest ever scam in the history of real estate, and still there is no accusation filed on any of them.
A collaborative effort of CUC international and HFS made it possible to start a company called Cendant in December 1997 which dealt mainly with real estate and tourism. The fraudulent activity took place for about a decade and a massive sum of money was accounted under scam. The estimated cost was about 14 billion dollars. The scandal took place immediately after the collaboration and recorded to be largest fraudulent activity in 1990’s. The accused was charged for imprisonment. In October 2005, the collaboration got broke up officially.
It was formerly known as Man official and faced a bankrupt on October 31, 2011. The company dealt with trading, foreign exchange and betting. In December 2014, the company agreed to pay 1.2 billion dollars and 100 million dollar fine as customers faced financial loss. They had 41 billion worth assets.
It is newly renamed as MCI; it is a telecommunications company which is considered to be the second-largest phone company. They paid 750 million dollars to SEC owing to the bankrupt filed in 2002 and many investors were affected due to the scam. Around 11,000 employees were laid off. The company has nearly 103 billion worth assets. The CEO got convicted and was kept in a federal prison.
Fannie Mae is actually FNMA paid 400 million dollars to SEC as their financial statements got misinterpreted until 2004.
To know more about historic scams, check out part 2 in REI quick cash system