TEN OF THE WORLD GREATEST FRAUDS

Victims of fraud can take some comfort, scant though it may be, in the knowledge that they are not the first people to be swindled in mega-frauds.

Here are ten of the most notorious frauds and swindles to have rocked the financial world in the last 100 years:

1. Charles Ponzi was one of the biggest swindlers in US history, and gave his name to the Ponzi "pyramid" scheme allegedly used by Bernard Madoff on Wall Street. Orchestrated after the First World War, Ponzi's fraud centred on "international postal reply coupons", designed to allow mail to be sent internationally. By acquiring these coupons abroad and exchanging them for higher value postage stamps in the US (essentially a form of arbitrage), Ponzi was able to make around a 400 per cent profit. Though this was not illegal, Ponzi advertised for investors to his scheme, promising them fantastic returns. He paid handsome windfalls to a handful of investors, which brought people flocking to his newly-formed Securities Exchange Company [SEC]. People mortgaged their homes and poured their savings into the company, which was accumulating colossal liabilities. Existing investors were paid off with the money of new investors. At the peak of his fraudulent scheme in 1920, Ponzi was making around $250,000 per day, an enormous sum for the time. The authorities slowly came to realize that, in order to cover all the investments made in the SEC, there would have to be 160,000,000 postal coupons in circulation. There were in reality only 27,000. Ponzi was indicted on 86 counts of mail fraud and sentenced to five years in prison in 1920.

2. Kenneth Lay was the founder of Enron, whose spectacular implosion in 2001 lead to one of the biggest fraud cases in history. Lay was convicted of fraud for duping investors over the health of Enron's finances before it plummeted into bankruptcy. Prosecutors accused lay of pocketing over £40 million of investors' money, and Lay was charged with 11 counts of securities fraud. Enron was worth $66 billion at its peak, and collapsed with billions of dollars of investors' money. Lay died before he could be sentenced in 2006.

3. Barings, the oldest merchant bank in London founded in 1762, collapsed in 1995 after the original "rogue trader", Nick Leeson, lost £827 million in speculative trading, mainly on the futures markets. Leeson was head derivatives trader in Singapore for the bank and was supposed to be arbitraging - profiting from the differences between markets by simultaneously buying on one and selling on another. Instead, it emerged, he had been betting on the future direction of the Japanese markets, and his unhedged losses snowballed as he tried to cover his bad gambles. He was sentenced to six and a half years in a Singapore prison, and is currently CEO of Irish football club Galway United.

4. Alves dos Reis perpetrated one of the biggest frauds in history in the 1920s by forging documents to print around 100 million Portuguese escudos (around $150 trillion in today's money) in official bank notes. While in jail for forging cheques, Alves dos Reis hatched a plot to convince a London-based printing company to make 200,000 500 escudo notes (around 1 per cent of Portugal's GDP at the time) for use in Portuguese colonies such as Angola. He then laundered the money and profited from 25 per cent of the proceeds. Rumours of fake banknotes were circulating, but, as the notes were not technically fake, the scheme flourished until journalists realised that Reis's newly-formed bank was offering low-interest loans without receiving deposits. He was jailed for 20 years in 1930.

5. Jerôme Kerviel nearly brought Société Générale to its knees with fraud worth £3.7 billion in early 2008. "Le rogue trader" made €50 billion of unauthorised trades and futures positions, but argued that SocGén knew what he was doing and turned a blind eye, a claim strenuously denied by the bank, who are pursuing Kerviel on charges of breach of trust, falsifying documents and computer abuse.

6. Bernard Ebbers, director of WorldCom, exaggerated the assets of his media company to the tune of $11 billion. He was sentenced to 25 years in jail in 2006 for falsely reporting the finances of WorldCom and cooking the books to cover the true nature of WorldCom's costs and losses. It was, in 2002, the largest ever Chapter 11 bankruptcy filing, only overtaken by the collapse of Lehman Brothers earlier this year. Ebbers cannot expect to be released from prison before 2028.

7. Ramón Báez Figueroa was arrested in 2003 for massive banking fraud in the Dominican Republic. He laundered money and concealed information from the Dominican government as part of a fraud scheme worth $2.2 billion, two-thirds of the national budget of the Dominican economy. The resulting bank bailout pushed inflation in the country to 30 per cent, and the devaluing of the peso triggered the failure of two other national banks. Báez Figueroa, who was famous for his allegedly shady relationships with high-ranking politicians and journalists, was sentenced to 10 years in jail.

8. Graham Halksworth would have been the world's biggest ever fraudster...if he had not been caught. The former Scotland Yard scientist tried to authenticate $2.5 trillion of US Treasury bonds that he claimed had been secretly issued by the US government in the thirties to undermine the Communist revolution in China. He was jailed for six years in 2003.

9. Sheridan Cox, the son of a British Army officer, allegedly defrauded investors around the world out of £520 million in an infamous "boiler room" scheme. He is still wanted for buying up dormant "shell" companies quoted on obscure stock markets and selling their shares through front companies to over 5,000 investors in Britain, Australasia and South Africa. He was convicted in absentia of a £30 million fraud in a Belgian court, and is wanted by the Taiwanese authorities for fraud worth over half a billion pounds.

10. Conrad Black, the disgraced media magnate, was convicted of nearly £30 million of fraud concerning newspaper firm Hollinger International, which used to own the Daily Telegraph. The peer was jailed for six and a half years for taking money owed to investors in the form of "non-compete" payments from the sale of newspaper titles. He last month made a plea to outgoing US President George Bush to commute his sentence, but can reasonably expect it to be refused.

TERMITE-MOUND VENTILATION

Termite mounds have been called marvels of engineering, and for good reason. These imposing structures made of soil and saliva can stand as high as six meters. Their 45-centimeter walls are baked by the sun until they are as hard as concrete. Some mounds have literally been built overnight.

Near the center of the mound re-sides the queen, which may lay several thousand eggs each day. Wingless and blind “worker termites” carry off the eggs to specially constructed cells. There they care for the larvae as they hatch. Perhaps the greatest marvel of the mound, though, is its ventilation system.

Consider: A series of chambers and galleries keep the interior of the mound at a constant temperature- despite varying conditions outside. For example, in Zimbabwe, Africa, the outside temperature can fluctuate from about 2 degrees Celsius at night to over 38 degrees Celsius during the day. Yet , the temperature inside mound remains at 31 degrees. Why?
Strategically placed ventilation holes at the bottom of the mound allow fresh air forced out the top. Cooler air enters the mound from an underground chamber and then circulates through the passages and cells. Termites open and close the holes to adjust the temperature as needed. A constant temperature is essential in order for the termites to farm the fungus that is their primary food.

So impressive is the design of the termite mound that a similar technology was employed by the architects of an office building in Zimbabwe. The building uses just 10% of the energy required by conventional buildings of the same size.

What do you think? Did the termite’s ability to regulate the temperature inside its mound come about by chance? Or is this evidence of design?
                                                                                                                                    Awake 2009

GLOBALISATION, WHO IS BENEFITTING?

The term globalisation is used to describe the growing worldwide interdependence of people and countries. This process has accelerated dramatically in the past or so largely because of huge advance in technology. Globalisation has been condemned by some set of people, they argue that it’s going to bring threat to the world, some even sees it as the mother of world’s ill.

Globalisation has encouraged free trade in terms of Economic Integration to help improve the economy of some countries (many examples are found in the developing countries) through Foreign Direct Investment. In West Africa, country like Ghana is now benefiting from ECOWAS trade liberalisation, but what this is likely to cause a country like Nigeria is that, it will turn the country into a dumping ground and its economy will fall as against its country counterparts like Ghana. No doubt, Economic Integration has increase the income of many families, compare the income of many families 50years ago with the income of families this decade, you will find out that the average income of many families is now thrice what was earn 50 years ago. But that has not reduced the numbers of people living under abject poverty, instead the number has kept increasing and the rich are getting richer.
Interchanging of ideas is an important feature of globalisation, this is symbolised through the internet. But unfortunately the internet is not merely used to spread beneficial information and commerce, some websites promotes pornography, racism, gambling and some even teaches on how to make bombs. It is believe that globalisation will make countries more reluctant to go to war because globalisation encourages making more money but what about those websites that teaches how to make bombs, which the builders will want to test and by so increases the rate of terrorism in the world. Even as Economic globalisation is driven by the desire to make more money, the profit motive rarely takes into account the poor and the disadvantages or the long term needs of the planet, when the world has an unregulated global economy dominated by self-interested countries who indirectly desire poverishing other countries or even humanity in real terms.
Many of African people wants to learn the western culture, especially the American culture; by so any products that comes from that part of the world is highly consumed by many Africans, even to the extent of wanting to live like an American, imagine in Nigeria many of Nigerian youths now form the habit of sagging their trousers. Another example is that of television which has an enormous influence on how people thinks, it promotes materialism, violence and immorality, all these are called cultural invasion. Many of African youths have thrown their mother culture away, some say it is old school, and this trend has been on the increase and one could wonder what will become the mother tongue in future.
Globalisation has brought about new challenges and new problems such as cultural-invasion, widen of the gap between the rich and the poor, job insecurity, bloody conflicts, increase poverty, huge social divide, environmental catastrophe, exhaustion of resources. One could start thinking that has this so called globalisation benefitted Africa and the world at large, come to think of it the problems it brings, it’s just like having honey on top of a bottle filled with bitter concoction. This is my view and will like to share your own opinion on this issue.
                                                                                                                 SANUSI BAYONLE S.