Largest Accounting Fraud EVER Lasted 17 Years!
This is one for Ripley's Believe it or Not!
In 1983, Cosmo Corigliano joined a company called CUC International. He was 23 years old, and was previously employed at Ernst & Whinney (predecessor to Ernst & Young). He eventually became the company's CFO. SEC officials believe the fraud began in 1985 and lasted until 1988, during which Corigliano was told to 'fake the numbers,' and was encouraged by his supervisors to continue this practice until the company merged with HFS to form Cendant Corporation.
It was at that time a staff accountant came forward and reported the fraud.
According to a report issued by Arthur Andersen, auditors from Ernst & Whinney--who audited the company during the time the fraud occurred--did not discover any mistakes over those years. However, there is no proof that E&W actually knew about the misdealings.
Here's where the 17 years caught up with CUC. Corigliano and others have agreed to cooperate with the SEC, who really is targeting higher-up officials, including Walter A. Forbes, CUC's founder. Whether he will go to jail, at this point, is anyone's guess.
The cost of the fraud? According to records, $19 billion!