Professor Elam

4/2/2025

We have another entry in big time frauds, this one for $175 M.

I am always hearing what a genius Jamie Dimon is but am always reading something like this. He admits it was a huge mistake.

I suspect more will come out on the failure of Morgan's due diligence. A judge rejected her request not to wear an ankle electronic monitor on the novel defense that it interfered with her teaching Pilates, now her only income. You mean she did not bury any of the  $175M in her back yard?

Judge orders her to wear monitor

Like Liz Holmes one wonders what she was thinking when the inevitable truth came out.

Morgan bought the company thinking many of her 4 million customers would move up to Morgan bank accounts. When their first request only netted ten individuals, the fraud unfolded. She hired a Univ or Penn Professor to create the fake accounts.

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As all of you know I have numerous frauds on course content and on this blog.  I am thinking of the similarities between Homes and Javice. Here are a few questions.

Did each start with an intent to fraud or did that come later?

Holmes intentionally dressed like Steve Jobs even using a deeper voice addressing audiences. She had to know the machine did not work but to this day claims a failure is not a fraud.  Javice paid a Professor to create fake customers, why isn't he being proswecuted,  but I think she saw teh potential of fame and fortune if she could make it appear the business was 15x its real size.

Is the publicity about Gates Zuckerberg Jobs et al actually motivating others to try to create a fabulous start up and then when it is doing well, they simply lie about the business. In both cases the lie paid off big time, for a while.

I have suggested they get caught up in their own hubris and publicity.  It is amazing they are clever enough to create the fraud, and then hang around long enough until the truth comes out and they are caught.

One of the textbooks we use this semester described fraudsters as nervous, never taking vacations, irritable, using counseling, etc. Sure you would think that but look at photos of RIta, Liz, Charlie, they are all calm cool and collected, even the photos of Charile outside the Fed courthouse where her lawyer has to be warning of the extended jail time if she fails to plea. 

How come they have a scheme to move the money out of the US to a country where they cannot be extradited, as Ghosn has in Lebanon. It must be they believe they will not be caught.

Morgan Chase lack of due diligence reminds us of HP being duped with Autonomy

Add to that EY with Luckin and Wirecard as well as KPMG on several audits, gee the audit book warns  in asset audits of existence, occurrence, valuation, and ownership, why did no one check?