It’s Not Just Madoff and Raju – UK Corporate Fraud Up To £1.2bn

What with Madoff, B Ramalinga Raju, that Special Ops guy who tried to fake his own death, and now this geriatric hedge fund manager making off with $350m of other people’s money, high-profile fraud cases have been angering investors and entertaining everyone else over the last couple of months. But it turns out everyone’s having a go at “riding the tiger” – accounting firm BDO Stoy Hayward released its FraudTrack report today, and it says that UK corporate losses to fraud were £1.19bn, 14% higher than last year.

And what with a global recession pinching hard, we can expect a lot more where that came from. “I don’t think it’s really hit yet”, said Simon Bevan, head of fraud services at BDO, to the FT. “There will be lots of massaging of the books to help people keep their jobs”. Got a failing business? Get your ass down the country club and start securing those investments for your Ponzi scheme!

Meanwhile, our busted chums Raju and Madoff carry on feeling the burn. Raju faces a few more days in jail as his bail hearing has been put back to the 22nd. Though he’s slept on the floor like any other remand prisoner, he’s at least been allowed to move to a more private cell after he became the “topic of discussion amongst other inmates”, which is a rather coy euphemism for what was probably all manner of Winstonian abuse.

Madoff, it emerges, may have never made a single trade with his investors’ money, instead preferring just to keep a hold of it and send them an email detailing where it had supposedly gone. Such purity and simplicity to his fraud! Doesn’t look like there’s going to be much of a pot to go round the hundreds of jewel-pawning investors – only $10m or so from the sale of the hot air that forms his company. He’s also keeping it gangsta and wearing a bulletproof vest, which has prompted a mini wave of fawning over his fashion choices. ABC News: “…wearing a blue bulletproof vest over a dark grey suit with his wavy elegant hair swept back over his collar”; New York Times: “Not only was the disgraced financier wearing a bullet-proof vest, it was color-coordinated with his dark suit”. Clearly taking a leaf from the Cheryl Cole school of image rehabilitation – dress well and sass everyone into submission.

Posted by Ben Beaumont-Thomas in Hot Money | January 19, 2009 1:45PM |