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Home > Fraud > Fraud Guides > A history of notable fraudsters

A history of notable fraudsters

Fraud is not a new phenomenon in the UK. In fact, inside the Old Bailey, you will find records dating back to the mid-18th century of cases involving sailors who were accused of sinking their own ships. In recent years, however, many substantial fraud cases have appeared in the headlines. Let’s take a look at five of the most notable fraudsters in the UK during the 20th and 21st century.

Robert Maxwell

Robert Maxwell was no stranger to the British media, and there are still many questions surrounding his death. Regardless of whether he accidentally slipped off of his yacht or committed suicide, Maxwell was a major fraud perpetrator in the 1980s and early 1990s.

After Maxwell’s death on November 5th, 1991, an investigation conducted by the Department of Trade and Industry found that he was heavily involved in the control of his employee’s pension funds. Maxwell was also the only signatory authorised to transfer an unlimited amount of money between the bank accounts of Mirror Group Newspapers and Maxwell Communication Corporation, his flagship companies.

The DTI report stated that Maxwell frequently used his employee’s pensions to fund investments, and he also manipulated the company accounts to make up for routine shortfalls. Most notably, he used the pensions of his employees to purchase Maxwell House in Holborn and London in 1986. During the same year, he lent £34 million to Mirror Group Newspapers. Although this was later exchanged for shares in Reuters, the pension fund did not realise significant profits from the rise in share prices that soon followed.

Nick Leeson

In one of the most high-profile cases of fraud in the history of Britain, Nick Leeson helped destroy Barings Bank in 1995. Although the cover-up secured his fate as one of Britain’s most notable fraudsters, it was actually designed to cover-up someone else’s mistake. Error account 88888 was established to disguise a £20,000 debt accumulated from the poor investment choices of one of the bank’s inexperienced employees.

However, Leeson soon began experiencing losses of his own and hid them in account 88888 as well. By the end of 1993, he had accumulated more than £500,000 in debt. In total, £1.3 billion was lost by Leeson in his shady dealings, driving Barings Bank into financial ruin. The tragedy could have been easily avoided if Leeson were not allowed to remain as a chief trader and settle his trades at the same time. Historically, the two roles have always been split.

The NatWest Trio

The NatWest Trio was comprised of three businessmen from the UK who were involved in the bankruptcy scandal of the American energy firm Enron in 2001. The U.S. District Court of Southern Texas accused the three men of conspiring to siphon money that should have gone to the company.

Enron had a partnership with LJM Cayman, which was overseen by the energy company’s chief financial officer. In June of 1999, the Enron CFO created a subsidiary called Swap Sub. Giles Darby, David Bermingham, and Gary Mulgrew were three London bankers who represented NatWest in the company’s dealings with Swap Sub.

In 2000, the NatWest Trio recommended that NatWest sell its Swap Sub stake for $1 million. This was much less than the stake was worth, because the three men decided to keep the substantial surplus money from the sale for themselves.

Kweku Adoboli

The times were better than ever for Kweku Adoboli in the beginning of 2008. Benefitting from a rapid rise up the ranks of UBS, a Swiss banking giant, Adoboli enjoyed penthouse parties and a £360,000 per year salary. Despite this, Adoboli found himself addicted to online spread betting sites, which caused him to resort to payday loans to pay off his mounting debts.

On September 15th of last year, Adoboli was arrested for a huge fraud scandal that was responsible for an astounding drop of £2.3 billion in UBS’s share price. The rising star of a trader, whose managers and friends had catapulted to the top of the game, had in fact become a gambling addict who quickly developed a reputation of recklessness in an effort to maintain his image as a superstar trader.

In reality, Adoboli nearly destroyed himself and the company responsible for his success in order to keep up appearances as a trader that could do no wrong. Unfortunately, Adoboli could not keep up the act for long, and his reckless trading caught up to him and UBS.

Hours before his arrest, Adoboli sent his bosses at UBS an email admitting to causing huge losses and apologising for the oncoming problems that the company would face. In the end, Adoboli gambled away £1.4 billion of UBS’s money and exposed the bank to £7.5 billion in market exposure before he was found guilty of committing the largest fraud in the history of Britain, making him the most notable fraudster in British history.

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