10 Famous financial frauds you should know

1) McKesson & Robbins scandal

McKesson & Robbins was a drug and chemical company in the mid-1920s that attracted the attention of Philip Musica, an individual with an unsavory past that included criminal acts and multiple fake names.

Musica purchased McKesson & Robbins in 1926 using the name F. Donald Coster and seeded the company with family members to help loot the company. The fraud involved fake purchase orders, inflated inventory, and skimming cash from company sales, and occurred despite the presence of Price Waterhouse as the company’s auditors. When the scam was finally detected in 1937, the SEC determined that $19 million in fictitious inventory was on the balance sheet—a sum equal to approximately $285 million in current dollars.

The McKesson & Robbins scandal had a profound impact on the accounting industry and led to the adoption of Generally Accepted Auditing Standards (GAAS), including the concept of an independent audit committee.

10 of 10

Leave a Reply

Your email address will not be published. Required fields are marked *

GIPHY App Key not set. Please check settings

finance
15 financial scams you should know

8) Charity fraud Telemarketers claiming to represent charities call asking the target for a donation. Fake charities try to take advantage of people’s generosity and compassion for others in need. Scammers will steal the money by posing as a genuine charity; they may try to use recent events, such as …

finance
Identify these financial scams and make your money safer

8) Charity fraud Telemarketers claiming to represent charities call asking the target for a donation. Fake charities try to take advantage of people’s generosity and compassion for others in need. Scammers will steal the money by posing as a genuine charity; they may try to use recent events, such as …