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5 most scandalous fraud cases of 2023

Every day, we see stories in the media of scammers and schemers, and their various attempts to take advantage of people for financial gain. But some reports are so brazen and shocking we must take note. Each year, the ACFE, along with our Advisory Council, selects those stories that we believe will live in infamy and serve as valuable case studies for fraud fighters for years to come.

We’d just filed our Most Scandalous Frauds story of 2022 when news of the implosion of multibillion-dollar crypto exchange FTX broke. It might’ve been a little too late for us to add what would become the biggest fraud scandal since Theranos to the 2022 list, but the FTX story didn’t disappear, and we had FTX founder Sam Bankman-Fried’s trial and eventual guilty verdict to keep us riveted. Of course, FTX wasn’t the only high-profile case that shocked us; there were many others that had a big impact on the anti-fraud profession. Here are the five fraud cases we found most scandalous in 2023.

01/ The fall of FTX

It took just over four hours for a jury to find FTX founder Sam Bankman-Fried guilty of seven counts of wire fraud, conspiracy and money laundering on Nov. 2, 2023. The once-celebrated cryptocurrency mogul faces a maximum of 115 years in prison when he’s sentenced in March 2024 for stealing nearly $10 billion from his customers to finance political contributions, venture capital investments and other extravagances. (See “Sam Bankman-Fried found guilty on all seven criminal fraud counts,” by MacKenzie Sigalos, CNBC, Nov. 3, 2023 and “Dramatic fall for Sam Bankman-Fried and ‘unkempt visionary’ persona,” by Victoria Bekiempis, The Guardian, Nov. 4, 2023.)

The guilty verdict was handed down almost a year after FTX’s bankruptcy in November 2022. The first hint that something wasn’t right at the company — that was once valued at $32 billion — came when the CEO of crypto exchange Binance signaled that he’d be offloading his holdings from FTX, citing an article from crypto news site Coindesk about problems at FTX’s sister hedge fund Alameda Research. The Coindesk article reported that Alameda’s main asset was FTT, FTX’s native token, and that FTX was using FTT as collateral on the balance sheet. When customers subsequently tried to withdraw their holdings from the platform, FTX was unable to meet the demand, and FTX’s collapse destabilized the crypto industry. The prices of bitcoin and ether sunk and crypto lender BlockFi suspended its operations because of FTX’s demise. (See “What Happened To Crypto Giant FTX? A Detailed Summary Of What We Actually Know So Far,” Forbes, Dec. 13, 2022 and “Embattled Crypto Exchange FTX Files for Bankruptcy,” by David Yaffe-Bellany, The New York Times, Nov. 11, 2022.)

Bankman-Fried was arrested by U.S. authorities in the Bahamas in December 2022. The government accused him of diverting funds from FTX investors to Alameda Research and giving Alameda an unlimited “line of credit” funded by crypto platform customers. The U.S. government also accused him of using commingled FTX customers’ funds at Alameda to buy real estate, make undisclosed investments and fund political campaigns. While misusing his customers’ funds, he was promoting FTX as a responsible crypto-asset trading platform with sophisticated risk measures to protect customer assets. (See “SEC Charges Samuel Bankman-Fried with Defrauding Investors in Crypto Asset Trading Platform FTX,” U.S. Securities and Exchange Commission press release, Dec. 13, 2022.)

Bankman-Fried’s trial provided plenty of drama — his top lieutenants at FTX, including ex-girlfriend and head of Alameda Research, Caroline Ellison, agreed to cooperate with the government and testify against him. During her tearful testimony, Ellison told the jury that Bankman-Fried directed her to commit crimes. She pleaded guilty to wire fraud, securities fraud and commodities fraud. (See “Sam Bankman-Fried ‘directed me’ to commit fraud, former FTX executive Caroline Ellison says,” by Kate Gibson, CBS News, Oct. 10, 2023.)

And Bankman-Fried himself took the stand, testifying for over five hours and downplaying what happened at FTX. He said that he “made a number of small mistakes, and a number of larger mistakes.” He blamed Ellison, saying that she failed to properly manage risk. (See “Sam Bankman-Fried Testifies That He Made ‘Larger Mistakes’ at FTX,” by David Yaffe-Bellany, Matthew Goldstein and J. Edward Moreno, The New York Times, Oct. 30, 2023.)

It is a clarion call to crypto platforms that they need to come into compliance with our laws.

The outsized promises of huge returns that lulled many to invest their money in FTX belied the risk-taking and hubris that went on behind the scenes. In the public eye, Bankman-Fried was a larger-than-life character who sported messy hair and rumpled clothes. He played the League of Legends video game during meetings and courted celebrities to endorse FTX. The company even purchased the rights to name the Miami Heat Arena the FTX Arena. Bankman-Fried, who made grand pronouncements about making the world a better place, donated millions to political campaigns as part of his philosophy of effective altruism. (See “Sam Bankman-Fried convicted of multibillion dollar FTX fraud,” by Luc Cohen and Jody Godoy, Reuters, Nov. 3, 2023 and “Silicon Valley May Never Learn Its Lesson,” by Lora Kelley, The Atlantic, Nov. 2, 2023.)

But the FTX story is also about something a bit more straightforward — a lack of compliance. Indeed, FTX didn’t employ a chief financial officer or have a human resources or compliance department or board of directors. As U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler stated when the regulator charged Bankman-Fried in 2022, “It is a clarion call to crypto platforms that they need to come into compliance with our laws.” (See “Sam Bankman-Fried Was a Grown Up Criminal, Not an Impulsive Man-Child,” by Ginia Bellafante, The New York Times, Nov. 3, 2023 and “SEC Charges Samuel Bankman-Fried with Defrauding Investors in Crypto Asset Trading Platform FTX.”) /01

02/ Fraud sparks a public health emergency

During an interview with NPR, Wendell Smith recounted the time he was approached by people offering to fly him to a sober-living home in Phoenix, Arizona. Smith, who was struggling with addiction, was living on the White Mountain Apache Reservation in New Mexico.

“I wanted to get sober, and I wanted to get back on my feet again,” Smith told NPR. He was promised help finding a job, but when he arrived at the facility, help was nowhere to be found. Instead of treatment, he says he witnessed residents at the facility drinking alcohol. (See “Fake ‘sober homes’ targeting Native Americans scam millions from taxpayers,” by Alice Fordham, NPR, Aug. 31, 2023.) Smith was just one of many Native Americans ensnared in a massive health care fraud scheme in which operators of fraudulent sober-living facilities exploited a loophole in an Arizona Medicaid program called the American Indian Health Program that allowed them to bill the state for services they never provided. Former patients of these programs, who were often recruited from reservations across the western U.S. with promises of jobs, shelter and help getting sober, reported being locked in rooms or barred from contacting family and friends while at the facilities. When the Arizona state government got wind of the scheme and cut off funding to these facilities, patients were released onto the streets of Phoenix. Several tribes declared a public health emergency; the Navajo Nation estimated that 5,000 to 8,000 tribal members in need of medical services were displaced by the facility closures. (See “Navajo Nation declares widespread Medicaid scam in Arizona a public health state of emergency,” by Anita Snow, Associated Press, ABC News, June 21, 2023.)

Stories of people recruited from reservations into sketchy treatment facilities had been circulating for about a year as Native American leaders began sounding alarms and law enforcement agencies, including the FBI, began investigating. In May 2023, Arizona Governor Katie Hobbs announced that the state had suspended 100 residential and outpatient treatment facilities providers that had allegedly defrauded the state’s Medicaid program out of hundreds of millions of dollars. Arizona Attorney General Kris Mayes told The Wall Street Journal it was one of the biggest government scandals in Arizona state history. (See “Fake ‘sober homes’ targeting Native Americans scam millions from taxpayers” and “Fraudulent Sober Homes Exploited Native Americans, Say Authorities,” by Dan Frosch, The Wall Street Journal, Sept. 11, 2023.)

Arizona’s American Indian Health Program directly reimburses clinics for whatever services they claim to provide unlike other Medicaid programs where recipients receive services through managed-care plans. People eligible for the program only need to attest to being a tribal member and they don’t need to be from Arizona to qualify. According to The Wall Street Journal, the reimbursement rate for substance treatments under this plan was 59% of what other providers billed, and there were no restrictions on what they could charge. Scammers subsequently set up fake sober houses throughout Phoenix and set their sights on Native Americans, a population with a high rate of addiction. Authorities think a Nevada-based criminal syndicate started the first sober-living scams. (See “Fraudulent Sober Homes Exploited Native Americans, Say Authorities.”)

According to The Wall Street Journal, the state first noticed something was improper when totals for substance-abuse treatments jumped from $53 million in 2019 to $668 million in 2022. So far, 45 people have been indicted in connection to the fraud. In one case, a provider billed Arizona for alcohol-rehab treatment for a 4-year-old. In another case, a woman who operated a fake recovery program in Mesa, Arizona, pleaded guilty to defrauding the state of more than $22 million. (See “Fake Arizona rehab centers scam Native Americans far from home, officials warn” and “Fraudulent Sober Homes Exploited Native Americans, Say Authorities.”)

Since the discovery of the scam, Arizona has instituted tighter controls on the health care program, such as a moratorium on enrolling new behavioral health clinics for billing. The state now also requires site visits and background checks for providers, and there’s a cap on reimbursements for outpatient rehab services. (See “Fraudulent Sober Homes Exploited Native Americans, Say Authorities.”) /02

03/ Human trafficking for fraud

When COVID-19 hit in 2020, public health measures and travel restrictions largely shut down the casinos and hotels that had proliferated throughout Southeast Asia in the years before the pandemic. Organized crime syndicates seized on the opportunity to turn all those empty casinos, hotels and other facilities into online fraud operations staffed with people smuggled into the region and forced to commit cyberfraud. According to a United Nations report released in August, hundreds of thousands of people have been trafficked to Southeast Asian countries such as Myanmar, Cambodia and Laos, and held captive to engage in various cyberfrauds, such as romance and investment scams and cryptocurrency schemes. The U.N. estimates that there are about 120,000 people in Myanmar, 100,000 in Cambodia, and tens of thousands in Lao PDR, the Philippines and Thailand being held in such conditions. When Philippine authorities raided several operators between May and August, they found over 4,400 people who’d been forced to engage in online fraud schemes. And, according to the U.N., these cyberfraud centers are generating billions of dollars in revenue. (See “Hundreds of thousands trafficked to work as online scammers in SE Asia, says UN report,” United Nations Office of the High Commissioner for Human Rights, press release, Aug. 29, 2023 and “They’re Forced to Run Online Scams. Their Captors Are Untouchable.” by Sui-Lee Wee, The New York Times, Aug. 28, 2023.)

People who’ve been trafficked for cyberfraud scams say they were lured with online job ads that promised high salaries and nice perks, but once they’d make it to their “new job,” they were forced to commit fraud. Many are held captive with threats of violence, and those who don’t perform well are often sold to other scam centers. Scam center operators beat those they catch who tried to escape. (See “They’re Forced to Run Online Scams. Their Captors Are Untouchable.)” According to the U.N. report, most of the people trafficked for these scam centers are often well-educated, tech-savvy men. Some even have graduate degrees and speak multiple languages. And while the scam centers mostly traffick men, women and girls are also victims. They’re often forced to provide sex as rewards to others at the scam centers. (See “Hundreds of thousands trafficked to work as online scammers in SE Asia, says UN report.”)

Experts who work on behalf of victims of human trafficking say that governments need to address the underlying problems that create the conditions for these cyber scam centers to flourish. Pia Oberoi, a U.N. senior adviser on migration and human rights for the Asia-Pacific region, told The Guardian that widespread corruption in the region is largely to blame.

“It’s so incredibly lucrative that there is very little political will to address this holistically,” says Oberoi. “We see no signs of it really slowing down — other than the actors relocating their operations when there’s some law enforcement pressure.” According to Oberoi, law enforcement authorities protect the scam centers. (See “Gangs forcing hundreds of thousands of people into cybercrime in south-east Asia, says UN,” by Kaamil Ahmed, The Guardian, Aug. 30, 2023.)

Indeed, the Center for Strategic and International Studies (CSIS) says that at the local level, poorly paid law enforcement officers, immigration officials and judges are subject to bribes from the criminal syndicates that run these scam centers. But CSIS also says that high-level government officials benefit from the economic growth generated by these scam centers, and thus they see no reason to fight them. Profits from massive cyber scam centers in Myanmar have enriched the military junta that currently controls the country.

CSIS says that social media and tech companies must step up to address the problem by validating employers that advertise on their sites and to remove fraudulent job advertisements. (See “Cyber Scamming as a New Destination for Human Trafficking Victims,” by Lauren Burke, Liam Hamama and Marti Flacks, CSIS, Aug. 17, 2023.)

In his address to ACFE’s 2023 Fraud Conference Asia-Pacific, Matt Friedman, a human-trafficking expert and CEO of the Mekong Group, said that the private sector has a key role to play in fighting these human rights abuses. Organizations must do their due diligence to determine that their supply chains aren’t tied to human trafficking, assess potential suppliers before entering any contracts and have policies in place to address vulnerabilities to human trafficking in their supply chains.

But Friedman also told attendees that one of the biggest problems in confronting human trafficking is a lack of funding. The money available to fight trafficking is just no match for the excessive profits that these cyber scam centers reap. (See “Modern Slavery’s Threat to the Economy, Society and More,” by Stefanie Hallgren, Fraudconferencenews.com, Sept. 27, 2023.) /03

04/ Vish attack

In September, an alleged collective of Gen-Z hackers caused major upheaval for two of the biggest casino chains in the world with a social-engineering tactic called vishing. First, Caesars Entertainment, which runs more than 50 resorts, filed a breach report with the SEC on Sept. 14, saying it was hacked on Sept. 7. According to Caesars’ filing, hackers infiltrated its loyalty program database, which includes customers’ driver’s licenses and Social Security numbers. In its SEC filing, Caesars reported that it quickly activated its incident response plan to contain the attack. (See “MGM reeling from cyber ‘chaos’ 5 days after attack as Caesars Entertainment says it was hacked too,” by Bill Hutchinson, ABC News, Sept. 14, 2023 and “Titans in crisis: unraveling the MGM and Caesars ransomware timeline,” by Stefanie Schappert, Cybernews, Nov. 15, 2023.)

As Caesars reportedly worked to pay the hackers millions in ransom money, MGM Resorts, which owns 31 casinos around the world, was hit with a hack that caused its operations to come to a halt. Beginning on Sept. 11, and over the course of 10 days, MGM slot machines and ATMs were shut down, elevators were out of order, and guests had to wait hours to check into rooms. Even if they could check in, they were unable to get into their rooms because key cards were inoperable. MGM Resorts acknowledged the attack and said it shut down systems to protect its data. MGM later announced in October that hackers accessed guests’ personal information, driver’s licenses, passports and Social Security numbers. In all, the attack cost MGM about $100 million. (See “The chaotic and cinematic MGM casino hack, explained,” by Sara Morrison, Vox, Oct. 6, 2023.)

Two ransomware gangs took credit for the attacks on MGM and Caesars. The first group, Russian-linked ALPHV/BlackCat (ALPHV) is a ransomware-as-service operator that takes a cut of ransom payouts for infiltrating networks to find and extract data. The second group claiming responsibility is a gang mostly made up of people ages 17 to 21 called Scattered Spider. A representative of Scattered Spider told the Financial Times that it stole and encrypted MGM’s data and was demanding payment in crypto to release it. The representative also claimed that the data hack was a backup plan. Scattered Spider said it initially planned to hack MGM’s slot machines but couldn’t. (See “The chaotic and cinematic MGM casino hack, explained.”)

Both attacks on MGM and Caesars were carried out by a social-engineering tactic called vishing, a portmanteau of “voice” and “phishing.” In the MGM case, hackers found an employee’s information on LinkedIn and impersonated them to call MGM’s IT help desk to obtain the credentials they needed to access its systems. According to Caesars, hackers targeted an “outsourced IT support vendor” in its social-engineering exploit to obtain sensitive data about the members of its customer loyalty program. (See “ The chaotic and cinematic MGM casino hack, explained” and “‘Power, influence, notoriety’: The Gen-Z hackers who struck MGM, Caesars,” by Zeba Siddiqui and Raphael Satter, Reuters, Sept. 22, 2023.)

According to Vox, vishing as a social-engineering method for hackers doesn’t get enough attention, but it’s a much easier tactic than phishing, which requires a lot more technical know-how such as setting up emails or text messages that look convincing enough to gather the information they want. All a hacker needs to pull off a successful vishing attack is studying publicly available information about a company’s structure and leadership, whether that information comes from employee posts on social media or an organization’s website. Organizations, especially ones that store massive amounts of consumer data and bring in millions of dollars a day the way casinos do, can’t afford to overlook vishing in their cybersecurity training for employees.

“It makes the job of an attacker so much easier. Things like LinkedIn and different types of people search engines, that is the first step into making a successful vish,” IBM’s hacking expert, Stephanie Carruthers, told Vox. (See “The chaotic and cinematic MGM casino hack, explained.”) /04

05/ From riches to fraud

Exiled Chinese billionaire Guo Wengui made a name for himself as an outspoken critic of Communist China after coming to the U.S. in 2015. He assembled an impressive following of thousands on social media, many of whom were fellow Chinese dissidents. But U.S. authorities say that Guo used this massive online following as a source of funding for a lavish lifestyle, selling a scam that allegedly bilked more than 5,000 people in the U.S. and abroad out of $1 billion. In March 2023, he was arrested at his multimillion-dollar Manhattan penthouse apartment on multiple charges of wire fraud, money laundering, securities fraud and bank fraud. (See “Exiled Chinese Billionaire Charged in New York With Financial Conspiracy,” by Benjamin Weiser and Michael Forsythe, The New York Times, March 15, 2023 and “Guo Wengui, Chinese billionaire and Steve Bannon associate, to go to trial in 2024 in fraud conspiracy,” by Chloe Atkins, NBC News, June 7, 2023.)

In 2014, Guo, a real-estate tycoon, fled China after officials there accused him of bribery and fraud. He first went to London, where he donated money to a foundation run by former British Prime Minister Tony Blair, who subsequently wrote Guo a recommendation letter for the New York penthouse from which he was later arrested. Once in the U.S., Guo formed alliances with the politically powerful — in 2017, he found his way into the orbit of then-President Donald Trump. He joined Trump’s Florida club Mar-a-Lago and soon befriended Steven K. Bannon, onetime advisor to the president. Bannon and Guo bonded over their mutual dislike of the Communist government in China and appeared on each other’s podcasts and online videos. It was on Guo’s yacht in 2020 that Bannon would be arrested for a fraud scheme. (Bannon was later pardoned by Trump for that scheme.) But before that, Bannon and Guo had teamed up to form a media company called GTV — the subject of Guo’s fraud charges. (See “Exiled Chinese Billionaire Charged in New York With Financial Conspiracy” and “Guo Wengui: How a Chinese tycoon built a pro-Trump money machine,” by Mike Wendling and Grace Tsoi, BBC, March 24, 2023.)

According to the federal indictment, beginning in 2018, Guo and his business partner, Kin Ming Je, used GTV as a fictitious investment opportunity to solicit and misappropriate money from Guo’s social media network. They allegedly promoted GTV as the “first ever platform, which will combine the power of citizen journalism and social news with state-of-the-art technology, big data, artificial intelligence, blockchain technology and real-time interactive communication.” (U.S. authorities haven’t implicated Bannon in this case.) About $452 million of GTV common stock was sold to 5,500 investors; Guo told them that the company was worth $2 billion. The reality was that GTV had no revenue, and U.S. prosecutors say that Guo funneled his investors’ funds into a risky hedge fund, expensive properties, a yacht, sports cars, $1 million worth of rugs and a $140,000 piano. The U.S. government has since seized $634 million in alleged fraud proceeds from 21 bank accounts and other assets such as a Lamborghini Aventador. Guo declared bankruptcy in 2022, claiming less than $100,000 to his name. (See “Exiled Chinese Billionaire Charged in New York With Financial Conspiracy” and “Guo Wengui, Chinese billionaire and Steve Bannon associate, to go to trial in 2024 in fraud conspiracy.”)

The U.S. government also accused Guo of another scheme in the indictment in which he allegedly got people to invest more than $250 million in G|Clubs, which claimed on its website to be “an exclusive, high-end membership program offering a full spectrum of services.” According to the indictment, G|Clubs didn’t deliver on its promise of services and experiences to its members. (See “Exiled Chinese Billionaire Charged in New York With Financial Conspiracy.”)

One of Guo’s investors told the BBC that she was drawn to his opposition to the Chinese government. She said that she invested $6,000 and that one of her friends invested more than $100,000. “I watched his livestreams every day,” said the investor. “The videos are very sensational … and we trust[ed] him completely.” (See “Guo Wengui: How a Chinese tycoon built a pro-Trump money machine.”)

Guo pleaded not guilty to 11 counts of fraud and has remained in jail since he was arrested. His trial is scheduled for April 2024. (See “Guo Wengui, Chinese billionaire and Steve Bannon associate, to go to trial in 2024 in fraud conspiracy.”)

Interestingly, the U.S. charges against Guo resemble the fraud accusations against him in China, according to The New York Times. The SEC’s Director of Enforcement Gurbir S. Grewal called Guo a “serial fraudster” who “took advantage of the hype and allure surrounding crypto and other investments to victimize thousands and fund his and his family’s lavish lifestyle.” (See “Exiled Chinese Billionaire Charged in New York With Financial Conspiracy.”) /05

Dishonorable mentions

Here are a few scandalous frauds that weren’t big enough to make it into the top 5, but still deserve a little extra shame.

Imposter syndrome

Ozy Media’s descent began in 2021 when The New York Times reported that the company’s chief operating officer, Samir Rao, impersonated a YouTube executive during a prospective investor call with Goldman Sachs. The Times story inspired numerous other reports of malfeasance at the news media company, including misleading tactics to amplify audience metrics. And then, just days after Rao pleaded guilty to securities and wire fraud charges in February, founder and CEO Carlos Watson was arrested. According to court filings, Watson, a former banker and TV host, told Rao what to say during that 2021 call with Goldman Sachs. U.S. prosecutors also allege that Watson lied to investors about his company’s financial health and falsely claimed that celebrities and high-profile companies had invested in Ozy. (See “Goldman Sachs, Ozy Media and a $40 Million Conference Call Gone Wrong,” by Ben Smith, New York Times, Sept. 26, 2021; “Ozy Media founder Carlos Watson arrested for fraud scheme,” by Madeline Halpert, BBC, Feb. 23, 2023; and “Ozy CEO arrested after former exec pleads guilty to fraud,” by Sara Fischer, Axios Media, Feb. 23, 2023.)


Fraud bridged partisan divides in 2023 when Democratic Senator Robert Menendez (N.J.) and Republican Congressman George Santos (N.Y.) were both indicted for various charges. In May, Santos was arrested on 13 charges of wire fraud, money laundering, making false statements to Congress and theft of public funds. Santos, who’d previously been called out for embellishing his résumé and personal life like a real-life Talented Mr. Ripley, was subsequently indicted on 10 new charges in October, including wire fraud, identity theft, false statements to the Federal Elections Commission and falsifying records. In November, the U.S. House Ethics Committee said it found substantial evidence that Santos committed federal crimes, and the U.S. House of Representatives voted to expel Santos from Congress. (See “George Santos charged with fraud, money laundering and more crimes in New York court,” by Melissa Quinn, CBS News, May 10, 2023; “Santos Faces New Charges Accusing Him of Lies and Credit Card Fraud,” by Michael Gold and Grace Ashford, The New York Times, Oct. 10, 2023; and “New York Republican George Santos expelled from Congress,” by Eric McDaniel, NPR, Dec. 1, 2023.)

The U.S. House Ethics Committee said it found substantial evidence that Santos committed federal crimes.

In September, the U.S. Department of Justice charged Menendez, head of the U.S. Senate Foreign Relations Committee, with bribery, honest services fraud and extortion. And, just as his colleagues started calling for his resignation, a federal grand jury in New York indicted Menendez for being a foreign agent of Egypt. According to the indictment, Menendez provided sensitive government information and took other steps to aid the Egyptian government. (See “Sen. Bob Menendez and his wife, Nadine, indicted on bribery charges,” by Rebecca Shabad, Jonathan Dienst, Tom Winter and Dareh Gregorian, NBC News, Sept. 22, 2023 and “Sen. Bob Menendez faces new charges accusing him of working for foreign government,” by Jonathan Dienst, Tom Winter and Summer Concepcion, NBC News, Oct. 12, 2023.)

Down on the consent farm

In 2023, the U.S. Federal Trade Commission (FTC) took aim at illegal telemarketing with its Operation Stop Scam Calls initiative, focusing its sights on “lead-generation consent farms” that use deceptive tactics to get consumers to give up their telephone numbers for robocallers. Perhaps the most notorious of these farms was Fluent LLC, an outfit the FTC sued in July for allegedly tricking people into providing personally identifiable information and consent to receive telemarketing calls. As far back as 2011, Fluent used deceptive ads and websites to falsely promise free rewards to brands such as Amazon and Walmart and interviews for jobs that didn’t exist, all with the intent of selling those leads to telemarketers. Telemarketers then flooded people with robocalls, texts and emails about auto warranties, debt-relief-reduction services, pain creams and for-profit schools. According to the FTC, Fluent collected and sold more than 620 million leads, generated $93.4 million revenue from its alleged scheme, and possibly deceived tens of millions of people. (See “FTC, Law Enforcers Nationwide Announce Enforcement Sweep to Stem the Tide of Illegal Telemarketing Calls to U.S. Consumers,” FTC, July 18, 2023 and “US sues ‘consent farm’ operator for ‘massive’ telemarketing deception,” by Jonathan Stempel, Reuters, July 17, 2023.)

Highest dishonors

In January, Charles McGonigal earned a distinction few FBI officials have ever achieved: one of the highest-ranking bureau officials to be accused of corruption. McGonigal, the former director of counterintelligence for New York’s FBI field office, was indicted on charges related to taking $225,000 in secret cash payments from a former Albanian intelligence officer for arranging business deals and agreeing to help infamous Russian oligarch Oleg Deripaska get off the U.S. sanctions list. He was also charged with money laundering. In September, McGonigal pleaded guilty to concealing the cash payments while he was an FBI agent, and prosecutors agreed to drop the other charges against him. He faces up to five years in prison. (See “Former Senior F.B.I. Official in New York Charged With Aiding Oligarch,” by Benjamin Weiser and William K. Rashbaum, The New York Times, Jan. 23, 2023 and “Charles McGonigal, ex-FBI official, pleads guilty to concealing $225,000 in payments,” by Robert Legare, Caitlin Yilek, CBS News, Sept. 22, 2023.)

Jennifer Liebman, CFE, is assistant editor of Fraud Magazine. Contact her at jliebman@ACFE.com.

*Image source: FTX photo by Michael M. Santiago/Getty Images