ABSTRACT

In recent years, investors have lost billions of dollars resulting from a common fraud known as a ponzi scheme. Using a real-life ponzi scheme, we prepared a fraud case study that is designed to be a comprehensive assignment in a fraud examination or forensic accounting course. The case may be assigned to students after fraud in general, and ponzi schemes in particular, are covered in class. This case is relevant for two reasons: 1) it focuses on an actual Ponzi scam perpetrated in the Mid-Atlantic Region, and, 2) it comprehensively depicts the many aspects of a fraud scheme including: motivation, ethics, red flags, the “clawback processâ€, income tax implications, and strategies for future deterrence.