The Top 5 Frauds of 2013


Mandy Moody, CFE
ACFE Social Media Specialist

As we say farewell to one year and look ahead to a new one, we would like to look back and take note of the top fraud cases that brought many people, cities, states and countries together. While these top five fraud stories of 2013 seemingly highlight the “bad guys,” we would like to pay tribute to all of the “good guys” out there who saw these cases through investigation, prosecution and, for some, sentencing. So here’s to all of the investigators, fraud examiners, attorneys, auditors, accountants and government officials who worked behind the scenes to get these stories where they belong: on the front pages of Financial Crime sections all over the world.

Here are our top five frauds of 2013:

  1. Cars, Houses & Horses
    Dubbed as “one of the worst abuses of public trust” in the state of Illinois’ history, the embezzlement case involving a devoted city bookkeeper stole international headlines when it was finally settled in February. Rita Crundwell was sentenced to almost 20 years, the same duration as her fraud, for stealing $53 million from the small town of Dixon, Ill. Crundwell used her home town’s hard-earned money almost as a weekly allowance to pay for vacations, properties, cars and an extravagant horse-breeding hobby. Thankfully, even all bad things must come to an end.
  2. Ahab’s Whale Wounded
    The Hunt for Steve Cohen began years ago, but it wasn’t until July that his company, SAC Capital was officially indicted on four counts of securities fraud and one count of wire fraud for insider trading dating back to 1999. The future looks grim for the already shrinking company facing some long and grueling legal battles.
  3. The Citadel Falls
    In June, a cyber gang responsible for creating a massive network of malware came crashing down. “Citadel,” the name of the network of botnets, stole more than $500 million from the bank accounts of more than 5 million infected computers over an 18-month period. Microsoft led the coordinated effort with more than 80 other entities worldwide to take down one of the largest cyber crime rings in the world. Lights out, Citadel.
  4. The GlaxoSmithKline of 2013 Award Goes To…
    Last month, Johnson & Johnson, one of the U.S.’s biggest pharmaceutical companies, settled one of the largest health care settlements in the country’s history. J&J agreed to pay $2.2 billion ($1.72 billion for civil settlements and $485 million in criminal fines and forfeited profits) for promoting three drugs not approved by the Food and Drug Administration (FDA). This quote from Zane Memeger, U.S. Attorney for the Eastern District of Pennsylvania, pretty much sums it up: “J&J's promotion of Risperdal for unapproved uses threatened the most vulnerable populations of our society - children, the elderly and those with developmental disabilities.”
  5. Biggest Mortgage Fraud Settlement Ever
    Also last month, JPMorgan Chase settled the U.S.’s largest-ever mortgage fraud case for $13 billion. Picking up Bear Stearns and WaMu might have seemed like a great idea in 2008, but the ghosts of the financial crisis’ past came back to haunt JPMorgan. Oh yeah, and they were also responsible for millions of faulty mortgages. One victory in a battle sure to go on longer than the Game of Thrones.

Want to read other stories from 2013? You can find more of the year’s top fraud headlines on our news blog,