Probation officer gives office BJ to boot-camp teen
Top 5 White Collar Crimes: Goldman Sachs Settles Largest Fraud Case In US History For $550 Million
Friday, July 23, 2010 at 9:00 am
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Considering the sorts of financial giants on today's list -- and the crimes they've committed -- Lucy Jo Mikolai's sins seem almost inconsequential. Almost.
In the end, it isn't so much what Mikolai stole or for what purpose.
What makes Mikolai's story so appropriate for today's list is the fact the the 37-year-old had once been a fraud investigator for Blue Earth County in Minnesota. And it's Blue Earth County from whom she stole.
In 2009, Mikolai, who'd left her investigator job to take a position as a financial assistant specialist with the county, enrolled her mother in three different public assistance programs that she was ineligible for.
Not only did Mikolai violate the county's law that no employee is to file public assistance paperwork for relatives, but she also did so fraudulently.
In the end, Mikolai stole little more than $1,700.
Still, she did it, and for that reason, on Tuesday, she pled guilty to one felony count of theft and a gross misdemeanor charge of misconduct by a public employee. In exchange for her plea, she'll receive five years of probation.
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4. Alec and Mike Sou
Alec Souphone Sou and his brother Mike Mankone Sou own and operate Hawaii's second-largest fruit and vegetable farm, Aloun Farms.
The secret to their success? Slave labor.
Last August, the two brothers were busted along with William Khoo, a "Thai labor recruiter," for attempting to lure 44 Thai nationals into slave labor on their farm.
Apparently, the brother's used Khoo's services to entice workers with the promise of lucrative jobs and were even charged high recruitment fees that workers often paid by promising their family's property as collateral.
Once in Hawaii, the brothers then confiscated the workers' passports and refused to pay them for their work. They were often threatened with being sent back to Thailand, where their houses would be taken away.
Not only did the Sou brothers scam poor workers, but the American government, too, by making up false documents in order to gain visas for their workers.
Both brothers pled guilty to the charges in January, but their sentencing has now been delayed another two months.
That's because they are now asking that their prison terms be staggered so that their business won't be damaged.
The judge presiding over the case isn't too impressed by their request, concerned that they don't actually stand by their guilt. What recourse she takes is yet to be seen. But saving their business -- sustained by slave labor -- is certainly not her concern.
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3. Dell
This past week was certainly a big one for the Securities and Exchange Commission, which brought in over $650 million in settlement money from just two different companies.
One of those was Dell, the computer giant that was recently busted after it was caught cooking its books in order to appease investors.
Apparently, the PC maker wasn't doing such great business over the last decade -- at least not as good as it had promised its investors it would do.
But instead of coming clean on its shortfall, the company fudged its numbers to show that it was meeting its earning targets and even lied about cutting operation costs.
That's not all. The company's head honchos also failed to mention to investors that it had received huge payments from Intel in exchange for a promise that it wouldn't use its rival's processors.
While the SEC is taking on Intel in a separate antitrust case, Dell finally agreed to cough up $100 million as part of its settlement agreement. $4 million of that is coming directly from the company's former CEO, Kevin Rollins, as well as $3 million from former CFO James Schneider, and another $4 million from founder and chief executive Mike Dell himself.
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2. AIG
While Goldman Sachs holds the title for the biggest fraud case in US History, the American International Group comes in at a close second, claiming the throne to the biggest class action settlement ever.
The company -- which is now nearly 80 percent owned by the US Government -- paid out a whopping $725 million to three different Ohio public pension funds.
The settlement stems from three separate suits that the state brought against the company in 2004, claiming that it had engaged in accounting fraud, bid-rigging, and stock price manipulation.
The company was contracted by the Ohio Public Employees Retirement System, the State Teachers Retirement System of Ohio, and the Ohio Police and Fire Pension Fund. Charged with investing the retirement savings of thousands of Ohio workers, AIG did little more than spend the last eleven years squandering their money, causing huge losses and securing its contracts through illegal means.
Despite all of its blatant malfeasance, the federal government bailed the company out when it was on the verge of collapsing in 2008 with a $182.3 billion taxpayer-funded rescue package. Now, the company is largely owned by the US government.
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| Fabrice Tourre |
1. Goldman Sachs
Despite the magnitude of AIG's payout to Ohio workers, it was Goldman Sachs's recent settlement with the Securities and Exchange Commission that dominated the headlines this past week.
That's because the Wall Street firm's settlement agreement marks the end of one of the highest profile fraud cases in American history.
Not only did the company agree to pay out a whopping $550 million for its sins, it even acknowledged that it failed to properly inform its investors about the dangers of buying up subprime mortgages -- the very scheme that led to the collapse of the housing market.
The company had been in negotiations with the SEC for a while now over allegations that it purposely misled investors to buy up loans that the company knew were no good. The SEC still has a separate lawsuit against the company's former vice president, Fabrice Tourre, the only individual accused in the case.
While the company's settlement amount is only the third largest in SEC's history -- the largest was $800 million paid out by AIG in 2006 -- it is the largest ever for a Wall Street firm like Goldman Sachs.
Of the $550, $250 will go to harmed investors, while the rest will go directly to the US Treasury.
Read last Friday's Top 5 White Collar Crimes: Eugene Gentsch Posed As Vet, Butchered Pets For Profit.
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