“Danny Moses: “How can the banks let this happen?”
Jared Vennett: “It’s fueled by stupidity.”
Mark Baum: But that’s not stupidity. That’s fraud.”
Jared Vennett: “Tell me the difference between stupid, and illegal and I’ll have my wife’s brother arrested.” – The Big Short.
Since the cinema emerged, the movies and series have significantly impacted their viewers. Usually, we want to get lost in the fiction of cinema. But we are faced with the harsh realities of the world on the silver screen every once in a while. History has witnessed many financial scams that have shocked the core of humanity. Some of these frauds gained so much popularity that producers decided to encash these stories by bringing them to the world on the big screen and recently on the OTT (over-the-top) platforms. The fraudsters are often referred to as con artists, and these seven financial scam movies are telltales of the creativity of these fraudsters.
- The Tinder Swindler [IMDb – 7.2/10]
- Inventing Anna [IMDb – 6.9/10]
- Fyre: The Greatest Party That Never Happened [IMDb – 7.2/10]
- The Wizard of Lies [IMDb – 6.8/10]
- The Big Short [IMDb – 7.8/10]
- The Wolf of Wall Street [IMDb – 8.2/10]
- Catch Me if You Can [IMDb – 8.1/10]
Let us look at these financial scam movies and series to understand the schemes adopted by these fraudsters.
#1. The Tinder Swindler
Source: IMDb
Depicting as the son of a diamond tycoon, i.e., Lev Leviev, the famous con artist Shimon Hayut, aka Simon Leviev, allured many women on Tinder, the online dating app, with his lavish lifestyle and generational wealth. Three of Shimon’s smartly executed con victims, Cecilie, Pernilla, and Ayleen, come forward to tell their stories in the Netflix documentary called ‘The Tinder Swindler’.
Shimon cons women across Europe out of millions of dollars by emotionally manipulating them to believe his diamond business entails several dangers. For example, he tells his victims that he cannot use his credit cards and accounts as dangerous people track him. Further, Shimon makes the women believe that he is prone to attacks by sending a video of his bleeding bodyguard, who averts an attack on Shimon. He also exploits the women and fakes traveling for work while enjoying his lavish lifestyle and laying the groundwork for his next victim. Hayut would pretend to repay the victims by showing forged bank transfers and checks. He would use the money from one victim to lure his next victim.
One of the victims, Cecilie, called the American Express helpline and the bank officials came to meet her. She learned from her bank that there were other complaints also against Hayut, and he had been defrauding women for a living. Even the journalists that Cecilie reached out to in Norway had to sift through and analyze Cecilie’s bank statements and credit card statements to find further leads.
Cecilie, Pernilla, and Ayleen are still paying the debts, while the authorities have not been able to charge Hayut with crimes committed against them despite the complaints made to the police. In 2011, he was charged with theft, forgery, and fraud in Israel for cashing stolen checks. In 2017, Hayut fled Israel and was declared a wanted fugitive. He spent only five months in jail in Israel, and the authorities released him early on good behavior. Nevertheless, the documentary reveals that Hayut swindled approximately $10 million from the victims across the globe.
#2. Inventing Anna
Source: IMDb
Inspired by the real-life story of Anna Sorokin, ‘Inventing Anna’ is the trending top 10 miniseries on Netflix currently. Sorokin duped banks, lawyers, hotels, and investors in the United States of America by pretending to be a German heiress named Anna Delvey. She traveled to New York in 2013, at the age of 22 years, to attend the New York Fashion Week and made friends with influential and wealthy people by making them believe that she comes from a wealthy German family with an enormous trust fund in her name.
Sorokin came up with the idea of the Anna Delvey Foundation, an elite private members’ club for the rich. She tried to defraud the wealthy members of the high society and banks like Fortress, City National, etc., into investing in her foundation by presenting a facade that the documents and money from her trust fund would be made available. Sorokin forged fake bank statements, documents, wire transfer receipts, and checks, misleading the people to believe that she could repay. She created a phony business manager who handled her trust fund using a voice modification app to pose as the business manager. She befriended the wealthy and lived on borrowed funds by faking that her father sometimes cut her off from her trust fund. Sorokin stayed in plush hotels without making the payments, booked charter flights, and traveled around for alleged business as well as pleasure.
In 2017, Sorokin was apprehended with the help of one of her friends, Rachel Williams, from rehab in California. Rachel Williams was also a victim of Sorokin’s many scams. Sorokin arranged for a stylist for courtroom appearances through her attorney, making her famous as a fashionista during the trial. Sorokin’s defense lawyer maintained the plea that Sorokin intended on repaying the debts, while Sorokin chased after fame even from the jail.
#3. Fyre: The Greatest Party That Never Happened
Souce: TV Guide
Fyre: the greatest party that never happened is a documentary based on the failed Fyre Festival, a fraudulent glamorous music festival founded by Billy McFarland. The company, Magnises, created an app called Fyre for booking music talent. To promote the app, McFarland came up with the idea of the Fyre Festival. Advertised by celebrities like Emily Ratajkowski, Bella Hadid, Kendall Jenner, the festival promised luxurious accommodation, food, art, music, and adventure on a deserted island of the Bahamas. The tickets for the festival went as high as $100,000 and was supposed to happen in 2017. McFarland promoted Fyre on a large scale as the most exclusive party for the wealthy and elite.
When the guests arrived at the venue, they were shocked to see the under-construction site. Absolutely opposite from the promotions, the Fyre Festival offered rain-soaked mattresses in tents for accommodation and cheese sandwiches for food. The inaugural weekend was an absolute disaster leading to the festival’s cancellation. What may sound like a mismanaged festival was, in reality, a well-executed con to defraud the investors and ticket holders. One of the investors arranged for Fyre to get a $4 million loan, and McFarland did not even pay the vendors hired for the festival. In October 2018, McFarland was sentenced to six years in prison for wire fraud and ordered to forfeit $26 million.
#4. The Wizard of Lies
Source: IMDb
Bernard Lawrence Madoff ran the largest Ponzi scheme in the history of the United States of America. He was a hedge fund investment manager and former chairman of the NASDAQ (National Association of Securities Dealers Automated Quotations) stock market. Madoff established a firm in the 1960s that came to be one of the largest investment funds. His scheme involved repayment to the early investors from the investments of the later investors instead of actual investment income. In addition, the firm created false trading reports based on Madoff’s returns for each customer.
Madoff robbed around $64.8 billion from more than 24,000 victims over decades. In 2009, Madoff pleaded guilty to 11 federal felonies, including securities fraud, wire fraud, money laundering, theft from an employee benefit plan, false filings with the Securities & Exchange Commission (SEC), etc. After his sons reported to the authorities about Madoff’s confession about the Ponzi scheme, the FBI arrested Madoff in 2008.
#5. The Big Short
Source: Netflix Life
During the 2007-2008 financial crisis caused due to the housing bubble, few investment bankers and hedge fund managers bet against the US mortgage market. The Big Short is a financial scam movie that revolves around four such characters in the financial industry. They made fortunes as they predicted that the housing market’s decline would result in the collapse of bonds created from high-risk subprime mortgages. One of the hedge fund managers anticipates that the interest rates from these mortgages will rise and proposes to create a credit default swap market. In this case, he would bet against, or short, market-based mortgage-backed securities.
The banks and financial institutions were packaging the subprime loans given to individuals with no repaying ability into Collateralized Debt Obligations (CDOs) at AAA ratings, causing the loans to default. However, the credit rating agencies refuse to downgrade the bond rating creating the bubble. These financial-industry professionals discover the rampant corruption in the banks and credit rating agencies. In 2008, the world was shaken by Lehman Brothers declaring bankruptcy and by the biggest stock market crash ever. It took nearly five years to recover from the market decline.
#6. The Wolf of Wall Street
Source: IMDb
Jordan Belfort set up Stratton Oakmont, a stockbroker in New York, Inc., an over-the-counter brokerage house. Unfortunately, the firm defrauded its shareholders, and rampant corruption led to Belfort’s downfall. Belfort and his associates used pump-and-dump schemes. This scheme involves artificially inflating the price of an owned stock through false and misleading positive statements to sell the cheaply purchased stock at a higher price. The stock price would eventually fall when the scheme operators dump the overvalued share resulting in the investors losing money.
Belfort created a lavish lifestyle involving luxurious travel, drugs, and prostitution. In addition, he illegally makes $22 million from the IPO of Steve Madden and launders money with the help of his wife and relatives. Belfort was convicted of fraud and money laundering and served 22 months of a 4-year sentence for the crimes. Belfort and his firm cost the victims around $200 million. The Wolf of Wall Street is a financial scam movie portraying the fraud and lifestyle of Belfort.
#7. Catch Me if You Can
Source: IMDb
Frank William Abagnale Jr. started conning people at the age of 15 years. He passed bad checks, impersonated, and committed forgery. For example, Abagnale posed as a pilot for Pan Am Airlines to take free flights. He also impersonated as a doctor and an attorney among the eight identities over the years. As a result, Abagnale swindled millions of dollars from his victims across the United States of America and Europe under false identities and using forged checks.
In 1971, Abagnale was sentenced to ten years in prison for forging checks and two years to escape jail. He served five years out of his twelve years sentence before being paroled on the condition to help the FBI uncover check forgers. Abagnale mastered the art of forging checks when there were no wire transfers.
Wrap Up
These real-life financial scam-based movies and series are proof that frauds have only evolved over the last few decades with enhancement in technology. From forging handwritten checks to wire fraud, con artists find their way around to committing large-scale frauds. Some of the lessons to learn from these financial scam movies are:
- Banks & organizations need to analyze and verify the integrity of transactions
- For granting loans, in-person verification is a must
- Investors and banks should use tools to detect wire frauds and unusual activity
- Due diligence is the key
- Banks and financial institutions should look for the sudden increase in income and change of lifestyle, which is the first sign of fraud
- Banks should check the borrower’s repaying capacity
Investigating these frauds for the investigators is a tedious task. The investigators can then spend their time on the more essential tasks for an effective and faster investigation by automating manual processes. Even the banks and financial institutions are responsible for reporting any suspicious transactions under the Bank Secrecy Act. To curb such large-scale financial scams, it would be best for the banks and investigating agencies to automate the manual data preparation and analysis processes. ScanWriter by Personable Inc. can automate your data capture effort with 100% accuracy and extract data from any document to Excel or data visualization, including handwritten checks. It can scrutinize the movements of funds and track the audit trail. It is quick, efficient, and cuts the hourly labor costs by 90%. ScanWriter provides a single solution approach to data analytics and deeper business intelligence by leveraging the power of automated data capture and data visualization. It also provides an analytic summary within minutes. Contact Personable Inc. for more information and a free demo of ScanWriter.