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Archive Stories
Archived stories from 2009

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New global Ponzi scheme uncovered by Feds

By our City correspondent Chas Sillomin

US regulators say they are investigating a massive suspected fraud across the insurance industry, which has stretched over hundreds of years and may involve hundreds of billions of dollars. The alleged fraud involves millions of people investing sums of money, often running into thousands of dollars, but getting nothing back. Many of the world's biggest companies may also have been caught up in the scheme, investigators said.

SWAT team moves in
to arrest underwriters

"Our investigations have shown that insurance firms are taking vast amounts of money from unsuspecting people and then using that money unscrupulously to pay claims made by other people. This is nothing more than a vast ?ponzi scheme' in our view," said federal investigator Wyatt Twerp. "The scale of the fraud is breathtaking, involving almost all of the most the industry's biggest companies, including some of the most respected names in corporate America," said Twerp.

"We are outraged and hope to break this racket so we can keep hold of our jobs after the Madoff scandal? ahem I mean save the tarnished reputation of Corporate America," Twerp said.

Federal investigators raided the homes of several insurance CEOs at dawn yesterday in the hope of garnering some positive publicity (surely uncovering evidence? Ed.).

"I was hauled out of bed at 6 a.m. by a hammering on my front door," said Curtis P. Huffenstuff, CEO of Big American Insurance Inc. "When I opened the door there were 20 feds, a 30-man SWAT team and three camera crews. They came in and turned the place upside down."

"I tried to tell them that the basic principle of insurance was that the premiums of the many paid the claims of the few, but they just said ?So you admit it?' and told me to ?Get a good lawyer, because you're going down'. They told me I would spend years in the slammer and my ass would be like a clown's pocket unless I cooperated with their investigation," Huffenstuff added.

"If found guilty, every insurance CEO could go to jail for the rest of their lives, because of the huge sums of money involved," said Professor Kenneth R. Rentaquote, Law Professor of Bama-Lama Univcrsity in Birmingham Alabama.

Britain's Financial Services Authority said in a statement: "We were actually thinking of investigating this before the Americans. It may not have looked like we were, but we were. Honest. We like to be first out of the blocks on all these things."

Rip Van Winkle of the European Commission's Competition Directorate said: "On a point of principle, we never look into anything that the Americans are already investigating. What is point? Anyway, now is lunchtime. A bientot."


Other news from Feb 2009
 
Travelating the Wave of Insurability
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