What is a scam? scams are schemes designed to con

you out of cash

they come in many forms

there are many different approaches

'there's a scam for everyone'

What are the main scams?

fake foreign lottery deceptive prize draw or sweepstake get-rich-quick schemes investment scams miracle cures clairvoyant scams

• COMMON SCAMS

• Advance fee schemes• The prize that will cost you• Online auctions• Fraud jobs• Moneymaking schemes• Bogus charities• Scam schools

Citi bank introduction

• Mention citibank details, its head quarters, us situated bank and other details such as its operation

• Group or Global CEO Vikram Pandit• chairman William Rhodes• chief operating officer Douglas Peterson and

chief financial officer John Gerspach

Citibank Scam

• Retail banking unit in Gurgaon

• Rs 400 crore estimated fraud and forgery

• Fraud – a handiwork

• Accused or culprit – Shivraj Puri

Citi bank scam expalantion• investment plan or scheme – fraudulent scheme • Other persons involved with Shivraj puri• 1. vice-president (AVP) of Hero CorporateServices, Sanjay Gupta 2. Ganpat Singh 3. Gaurav Jain• hni and corporates invested in the investment scam :

about 29 entities• Major investment done by 1)Hero’s Munjal and 2)high

networth individual (HNI) Sanjeev Aggarwal, Managing Director, Helion Advisors,

Major Investments made by• Hero Groups – Amount ?• Hni’s --- Sanjay Agarwaal• The entities whose funds were diverted by Puri into the

account of his relatives• include Hero Corporate Services (Rs 13.75 cr), OKS

Sapantak (Rs 2 cr) and• Satyam Auto (Rs 25 cr).• They also include Mayar Infratech (Rs 24 crore), Spaid (Rs

62 crore), Karopat Pad (Rs 8 crore), Sunil Kant and Sons (Rs 3 crore) Aero Infratec (Rs 25 crore), Hero Exports (Rs 97 crore), Rekha Munjal (Rs 5 crore), Munjal Investments (Rs 2.5 crore) and Munab Braej (Rs 71 crore).

What was the role of Hero’s 3 workers in scam and there share

1. vice-president (AVP) of Hero Corporate Services, Sanjay Gupta2. Ganpat Singh3. Gaurav Singh

• Puri had promised Gupta Rs 20cr as commission• bought a property in Palam Vihar worth Rs 1.16

crore

Where was the money diverted

• 300cr investment where it was invested by puri

• Amount invested in share market through brokerage firms i.e Religare and Bonanza

• money was also routed through Norman Martin, a firm owned by his relative.

Shivraj puri: the master mind

• Explain in detail

Legal cases against the citibank and shivraj puri and ceo vikram pandit

• FIR filed by a high net worth individual (HNI) Sanjiv Agarwal filed a case of criminal breach of trust, falsification of accounts, cheating and criminal conspiracy against all top bosses of the bank, including group CEO Vikram Pandit, chairman William Rhodes, chief operating officer Douglas Peterson and chief financial officer John Gerspach — all based in New York.

• The case has been registered under sections 409, 477A, 420 and 120B of IPC.

• Money laundeering

• Withdrawing of compaint against the top bosses

Investigation by police, rbi and sebi

Why the Scandals?

• Blamed high tech boom• Meeting quarterly earnings • Stock options, greed and short-term price

manipulation• Historically, same result - speculative bubbles

followed by crashes• Fiascos, corruption, business failures follow

economic booms

Why the Scandals? (Cont’d)

“Accounting fraud does tend to come in waves, and is discovered most often after a market collapse, since no one is interested in investigating much when stock prices are high and everyone’s making big money.”

Final Accounting: Ambition, Greed, and the Fall of Arthur Andersen (Toffler)

Why the Scandals? (Cont’d)

• “Just a few”- rotten apple theory • Specific incentives – bonuses, excessive

options• Institutional environment turns blind eye to

unethical or illegal acts• Culture allows egregious acts • “It pays to do it, it’s easy to do, and it’s

unlikely that you’ll be caught.” [Schilit]

Why the Scandals? (Cont’d)

• Incentives: Greed, power, ego• Opportunity:

–Weak governance – Corporate culture

– Ineffective auditing – Lax regulation – Haphazard enforcement

TOP STRATEGIES TO AVOID SCAMS

• Don’t become a victim.• Investigate strangers who have deals too

good to be true.• Always stay in charge of your money.• Don’t be fooled by appearances.• Watch out for salespeople who prey on

fears.• Monitor your investments.• Report fraud or abuse.• Do your homework.• Be wary of door-to-door solicitations

Business ethics

Financial, Business & Ethical

• Scandals and high profile cases• Manipulations, tricks & red flags• Repercussions–legal, financial, reputation• Lessons learned• Corporate culture -- “Tone at the Top”• Management integrity