Frauds, Cons, Ponzis & The Importance of Due Diligence for Investors
The beginning of the trial of “Crypto King” Sam Bankman-Freid this month, has seen many analogies drawn with the 2008 Bernie Madoff ponzi case - the famous $65 billion fraud.
Like Madoff, Bankman-Fried inspired confidence. Madoff, once Chairman of the Nasdaq Stock Exchange, was a highly respected figure in the financial world for decades before the 2008 market meltdown heralded the collapse of the ponzi. Bankman-Fried’s FTX exchange, endorsed by high-profile figures, appeared to buck the trend as a trusted player in a sector riddled with bad actors. In both cases, the actual mechanics of the operation were shrouded in baffling pseudo-complexity. Investors acted on faith rather than hard evidence.
As Diana Henriques points out in her book on Madoff, ‘Wizard of Lies’, “The most essential gift of a con man is that they can inspire trust that never wavers, even in the face of red flags and worrisome details.”
Madoff survived no less than 6 investigations by the Securities and Exchange Commission. His con only unravelled when the global market crash triggered an attempted withdrawal of some $7bn (£6bn) by customers. According to the US Securities and Exchange Commission, the ‘rob Peter to pay Paul’ mechanics behind the collapse of Bankman-Fried’s FTX crypto exchange were similar. Like Madoff, “Bankman-Fried is accused of orchestrating a massive, years-long fraud; diverting billions of dollars of the trading platform’s customer funds for his own personal benefit and to help grow his empire.”
At Armour Intel we leverage specialist OSINT technology combined with human expertise to objectively analyse multiple data points and yield the kind of information that is crucial in evaluating risk and identifying fraudulent activities. We enable our clients to make informed decisions and conclude successful and safe investments in an increasingly complex world.
In the first three quarters of 2023, our investigations have covered sectors as diverse as medicine, mining, fishing, fintech, biotech, payment solutions, car hire, luxury hotels, blockchain applications, banking and more. We have protected the interests of clients around the world, working with large Private Equity Investment Funds, Alternative Investment Funds, Sector Specific Funds, Specialist Venture Capital Firms, Portfolio Management Advisors, Family Offices, Private Investors and Banks. In addition, our litigation support department has leveraged our global network to provide investigation services and litigation support to law firms across five continents.
Also, during the course of the past year, our investigation team uncovered two highly developed and cleverly crafted ponzi schemes, saving clients upper eight-figure potential losses as a result.
If you would like an update on our services, or have an enquiry on a new prospect, please get in touch on [email protected]. It costs nothing for an initial review and quotation.
Sebastian De Bono - the founder and CEO of Armour Intel - is an expert in the business intelligence space.
