Two years ago, I wrote a long post about the Stanford International Bank Fraud. I recently thought about the story and realized I never followed up to see what happened. After a quick Google search, I was pleased to see that Allen Stanford was convicted and sentenced to 110 years in prison.
The most amazing part is even after his conviction Stanford still claims he wasn’t running a Ponzi scheme and the government is responsible for his victims’ losses. Incredible.
Posted in Fraud
Tagged Fraud, stanford
There is an interesting alleged accounting fraud unfolding in China. Sino-Forest Corporation, a Chinese company in the business of selling timber, has been accused by short sellers of being a massive Ponzi scheme.
Like Enron, they seem to be running their business through a complex system of subsidiaries in order to obfuscate transactions.
One of the funnier quotes from the short sellers’ report is below:
Despite TRE’s opacity on the revenue side, we have overwhelming evidence that the $231.1 million in Yunnan province timber TRE claimed to sell is largely fabricated. Such amount exceeds TRE’s real timber holdings in Yunnan province. It exceeds the applicable harvesting quotas by six times. Transporting the harvested logs would have required over 50,000 trucks driving on two-lane roads winding through the mountains from this remote region, which is far beyond belief (and likely road capacity).
In other words, the amount of timber they claimed to sell in this one transaction not only exceeded their holdings, but the provinces’ road capacity. Oops. They should have sandbagged a little.
Sino-Forest is fighting back today against the allegations. It will interesting to watch this story unfold. Thanks to @bargles for the tweet that piqued my interest.