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 Corporate
Services, 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 Gupta
2. Ganpat Singh
3. 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