Top 20 Most Shocking Corporate Corruption Scandals Ever

About thirty years after its founding, Texas-based Waste Management found itself in the crosshairs of the SEC. After decades of rapid growth, the company’s stock price had begun to stall. To sustain their expansion, executives resorted to accounting fraud, artificially inflating their profits by $1.7 billion. These unethical practices enriched the top brass at Waste Management with bonuses and perks, while defrauding their shareholders of over $6 billion. The accounting firm Arthur Andersen, notorious for its involvement in the Enron scandal, which we’ll get to later, had also assisted Waste Management in covering up the fraud. The firm paid an unprecedented $7 million penalty while Waste management coughed up over $450 million to settle a class-action lawsuit by its shareholders.

International sporting events like the Olympics and the World Cup are magnets for greedy individuals and corporations. The 2004 Olympic Games in Athens, Greece were no exception. In the years leading up to the games, Siemens AG - a huge German telecoms conglomerate - saw the opportunity to make mountains of money. The company allegedly bribed a number of Greek officials up to 100 million euros in order to secure lucrative telecommunications contracts. This scandal rocked the small Mediterranean country and resulted in the indictment of several Greek officials, although most were acquitted in 2022. It was the first domino in a series of corruption scandals, shattering confidence in the Greek government and triggering over a decade of political instability.

Financial investigations in the post-Great Recession era revealed shocking amounts of corruption across multiple sectors, particularly in Banking. A 2012 investigation into the London Interbank Offered Rate, or Libor, unearthed widespread market manipulation. Libor represents a set of interest rates based on submissions by big international banks. As it turns out, those banks - led by Barclays - colluded to manipulate those interest rates and by doing so, they increased profits and mitigated losses on derivative trading. After protracted negotiations with financial regulators in the U.K. and the U.S., the British bank was forced to pay nearly $550 million in fines and restitution. In the years that followed, other banks like UBS and RBS would face similar consequences.

Parmalat began as a small family Italian farm in 1961. By the end of the 20th century, it had over 200 subsidiaries in nearly 50 countries. Dealing with financial headwinds in 1990, they turned to white collar crime under the leadership of founder Calisto Tanzi. Parmalat engaged in various forms of fraud and money laundering. They created fake transactions through double billing, to inflate their profits, then leveraged these as collateral to borrow money from banks. Additionally, they colluded with investment bankers and auditors to hide their debt from investors. When auditor Deloitte & Touch refused to endorse Parmalat’s financial statements in November 2003, the writing was on the wall. A month later, the company was declared insolvent and Tanzi was arrested.

The mining arm of this Canadian company shot to prominence in 1995 when it claimed it had discovered a huge gold store in Indonesia. The resulting increase in stock price saw Bre-X Minerals Ltd. make over $6 billion in CAD, but the bottom line was that it was all based on a lie perpetrated by geologist Michael de Guzman. The fraud came to light when de Guzman reportedly took his own life in March of 1997. Further analysis of the mining site revealed there to be insignificant amounts of gold, which ultimately sent the company into bankruptcy. Although little money was recovered for those who were misled, the scandal did result in significant changes to Canadian legislation with respect to professional geology.

It’s hard to picture today, but Lance Armstrong was once an international sporting icon. The cyclist’s story was inspirational: he overcame testicular cancer to win the Tour de France seven years running. His non-profit, then known as the Lance Armstrong Foundation, raised $400 million to help cancer patients, mostly through their signature yellow wristbands. There was only one problem: it was a non-profit empire based on lies. Armstrong had admittedly used performance enhancing drugs for years and encouraged other cyclists to do so. He was stripped of his Tour de France titles and kicked out of the company, which rebranded as the Livestrong Foundation. Despite cutting ties, Livestrong lost many of their corporate sponsorships and have spent a decade trying to rebuild.

The major oil company known as BP may already have had a famously poor environmental record, but this disaster was the worst in the history of the petroleum industry. 11 people were killed in the initial explosion of the Deepwater Horizon oil rig in the Gulf of Mexico in 2010, but humans and animals continue to feel the detrimental effects of 210 million US gallons of oil flowing into the sea. The company was hit with charges that amounted to $20.8 billion in fines for their gross negligence and willful misconduct. However, whether this amount of money is capable of reversing the environmental damage remains to be seen.

If the housing market crash were a mining disaster, the Freddie Mac scandal was the canary in the coal mine. Freddie Mac is a federally-backed mortgage lender based in Virginia. Four years before the collapse of the entire industry, it was discovered that Freddie Mac lied about billions in earnings. As with many companies on this list, Freddie Mac’s leaders felt pressured to reflect impressive financial profits. Multiple executives including the CEO, COO, and CFO were in on the scheme, colluding to inflate the company’s earnings. The SEC investigation led to a consent decree, forcing Freddie Mac to reorganize their accounting practices. They were also forced to pay a fine of $125 million.

The rise and fall of Sam Bankman-Fried and FTX was one of the biggest stories of 2022. Bankman-Fried founded the cryptocurrency exchange in 2019 and rode the wave to immense wealth. Within three years, he had bought the naming rights to the Miami Heat’s arena. However, Bankman-Fried proved to be a less-than-reliable business man. He misled investors, lied to the government and secretly diverted customer money into a different firm, Alameda Research. These illegal practices didn’t last long; Bankman-Fried was arrested and put on trial, during which the scope of his fraud was revealed. He had lost billions of dollars, ruining his investors and customers alike. FTX eventually filed for bankruptcy and Bankman-Fried was convicted of multiple criminal counts including fraud and money laundering.

The death toll of this 1984 disaster in India is claimed to be more than 16,000, but it is unknown how many people actually suffered as a result of the gas leak at the Union Carbide Indian Limited pesticide plant. Former Union Carbide Corporation CEO Warren Anderson was charged with manslaughter by Bhopal authorities, but never had to answer for the disaster as the US refused to extradite him. In 1989, $470 million was paid by UCC to settle litigation, but a lawsuit seeking further compensation for crimes against humanity was dismissed in 2012. Anderson died two years later, with the Indian public still feeling as though justice had not been served.

Dennis Kozlowski and Mark H. Swartz were infamous for their extravagant lifestyles that were built through the success of the security systems company known as Tyco International Ltd. And in 2002, they were accused of stealing over $150 million from the business. The then-CEO and then-CFO contended that the board had authorized these payments as bonuses. The following trial was something of a sham, but eventually both men were sentenced to up to 25 years in prison during a retrial. Due to the duo’s falsification of records, Tyco was forced to pay almost $3 billion to defrauded, and likely very angry, investors.

The governing body for the most popular sport in the world has been dogged by constant accusations of corruption, but in 2015 these suspicions were confirmed: 18 individuals were indicted on charges including money laundering and wire fraud. Investigation by the FBI uncovered allegations that several FIFA officials had collected millions of dollars in bribes to award media and marketing rights for the games. There was also considerable evidence that similar bribery of top officials had been key in deciding what countries got to host the World Cup tournaments. As a result of the scandal, then FIFA president Sepp Blatter was suspended from the organization and subsequently issued an eight-year ban from any of their activities.

The twisted lies and warped reality of Theranos founder Elizabeth Holmes became the subject of multiple true crime documentaries. Her insane grift became a pop culture phenomenon, fascinating millions. Holmes was a charismatic figure, using her charm to convince top investors and spokespeople of her technical brilliance. She claimed to have invented revolutionary medical technology: a one-stop analysis machine for blood testing known as the Edison. It was an invention that would change the face of medicine. It was also a complete sham, sold on lies bought by business titans, former presidents, and cabinet secretaries alike. Holmes falsified data, and kept her lies up until her arrest. She was convicted of fraud in 2022 and sentenced to 11 years in prison.

After Donald Trump won the 2016 presidential election, a number of Russia-related scandals floated to the surface of public consciousness. One of the largest broke in 2018: personal data of about 87 million Facebook users had been obtained illegally by the political consultant firm Cambridge Analytica. A whistleblower from the firm confirmed that this data was shared with Russia. Mark Zuckerberg faced congressional inquiries in the U.S. and Europe about Facebook’s conduct on this matter. The company later admitted that they knew about Cambridge Analytica’s actions, and had done nothing to stop them. As a result, Facebook’s share price plummeted, and they eventually rebranded as Meta, partly to shake off the scandal. In 2022, Meta agreed to a $725 million settlement.

Charles Ponzi was an Italian businessman who invented the most famous fraud scheme in history. He’d lure people to invest in a product with promises of massive profits. But there is no product in a Ponzi scheme. New investors just pay off the old ones. Years after Ponzi’s death, Bernie Madoff would perfect his setup. Madoff spent decades building a reputation as one of the most successful financiers in the world. He also orchestrated the most elaborate Ponzi scheme in history, swindling thousands of investors of an estimated $65 billion. When his scheme collapsed, he’d destroyed numerous businesses and families, including his own. In 2009, Madoff received a sentence of 150 years in prison and forfeited $170 billion in restitution.

The 2008 Financial Crisis was a tough time for reckless investment banks as Bear Stearns found out, but the Lehman Brothers collapse was the economic event’s greatest victim. The financial services firm’s leveraging of borrowed money caused the biggest bankruptcy in US history in 2008. It didn’t take long for the company to fizzle out of existence in a rapid decline that enhanced the economic devastation of the ongoing crisis. News emerged that executives increased their pay just before the bankruptcy and that accounts had been altered to hide the bank’s poor financial position. This case stands as the perfect example of the culture of excess causing worldwide suffering for billions of people.

With enough greed, fraudsters can turn any industry into a criminal enterprise. In 1986, Aaron Beam and Richard Scrushy took their chain of rehabilitation hospitals, HealthSouth Corporation, public, after enticing Wall Street with promises of substantial growth. Over the next decade, HealthSouth expanded nationwide, boasting 40,000 employees and landing in the Fortune 500. As growth waned, however, Scrushy turned to fraud. He and his executives cooked the books and massively inflated the company’s earnings. Additionally, Scrushy sold $75 million in shares right before an anti-fraud law went into effect. He faced two criminal trials in the state of Alabama before being convicted and sentenced to nearly seven years in prison. He was eventually ordered to pay almost $3 billion in damages.

This telecommunication corporation held the record for biggest bankruptcy in 2002 before the Lehman Brothers collapse took its unwanted title 6 years later. Throughout the early 2000s, the company was utilizing a complex scheme of adjusting its books to hide the considerable losses. By 2003, it is thought that their total assets had been fraudulently inflated by around $11 billion. In 2005, former CEO Bernard Ebbers was convicted of various types of fraud that would keep him behind bars for 25 years, a sentence many would say was befitting someone who deceived so many.

In this case of fraud, it was discovered that one of the biggest car manufacturers in the world was using software to falsify emission test results, with an estimated 11 million of its vehicles being affected. It was eventually revealed that the company had installed illegal software in the cars that allowed them to bypass environmental regulations. In doing so, they violated the Clean Air Act, potentially putting human lives at risk. These revelations had implications all over the world, with Volkswagen receiving hefty fines in multiple countries. In total, the company paid over $33 billion to clear off these fines, as well as financial settlements and buyback costs. However, the actual effects of this scandal remain unknown.

In the space of a month or so, this energy giant went from being one of the biggest companies in the world to bankrupt. What set the scandal apart from the relatively common instances of accounting fraud were the failures of accounting firm Arthur Andersen LLP, which neglected to report Enron’s crimes and led to the firm’s own dissolution. The sheer scale of Enron’s fraudulent activity is difficult to comprehend as it allowed the business to pretend it was running at $100 billion in revenues through the use of loopholes and poor financial reporting. Many critics believed that such recklessness was particularly abhorrent for an energy company, and that those involved deserved their harsh sentences.

Step into the dark side of the corporate world, and let us know your thoughts on these corporate scandals in the comments below.