“Life is a dream for the wise, a game for the fool, a comedy for the rich, a tragedy for the poor” – Sholom Aleichem
When I was younger, life did feel like a dream, and the plethora of movies and TV shows I had at my fingertips encouraged this mindset. I remember being confused, though, wondering how actors were able to come back to play multiple characters in different shows and movies after I watched them survive something seemingly impossible. Of course, that’s the whole point of acting; make it believable. But that skill set hasn’t been too kind to the famous individuals identified below.
In this installment of Frauds of the Rich and Famous, we’ll be diving into a couple stories involving celebrities and their fraudulent activities.
FTX Bankruptcy and the Federal Prosecution of Sam Bankman-Fried
Like numerous others in the past decade or so, celebrities often saw cryptocurrency as a financial opportunity, especially given its increase in value during 2020 and 2021. Following the FTX scandal, however, the Securities and Exchange Commission placed additional scrutiny on cryptocurrency financial markets, resulting in crypto fraud charges against eight celebrities, including Lindsay Lohan, Jake Paul, Soulja Boy and Lil Yachty.
The commission filed the complaint based on the celebrities’ involvement with crypto asset companies Tron and BitTorrent. According to sources, the celebrities were expected to advertise across social media and use their respective influence to encourage trading via these crypto asset companies. The SEC became involved when it was determined that the celebrities performed their promotion without disclosing their compensation. To settle the charges, the celebrities agreed to pay over $400,000 in disgorgement, interest and penalties.
If you were unlucky enough to invest in crypto during its rise and held for too long, like many people, for you it too became a Hollywood tragedy. Look no further than the FTX bankruptcy and the federal prosecution of Samuel Bankman-Fried.
It’s interesting to see how something as simple as advertising on social media can have costly repercussions. While the previous case involved marquee names and cryptocurrency — which is relatively new – celebrities may also become involved in more traditional types of fraud schemes, as described in our next example.
Chrisly Knows Best… About Bank and Wire Fraud
I enjoy watching home remodeling shows like “Property Brothers,” “Love It or List It” and “Flip or Flop.” Reality TV star Todd Chrisley built his wealth on real estate and had his own show, “Chrisley Knows Best,” which aired for 10 years on the USA Network.
Chrisley’s image of wealth, however, diminished leading up to – and eventually ceased to exist – after a United States Attorney’s Office for the Northern District of Georgia’s press release. According to the release, Chrisley and his wife Julie conspired to and committed bank fraud and wire fraud. After acquiring more than $36 million in loans using fraudulent documentation, then spending the money, Chrisley later filed for bankruptcy in an effort to walk away from over $20 million of these personal loans.
Along the way, the couple transferred ownership of corporate bank accounts to a relative to avoid collection of delinquent taxes, an action that resulted in sentences of 12 years for Todd Chrisley and seven years for his wife. Unfortunately, bank fraud, wire fraud and issues with the IRS are not necessarily unique to the Chrisleys, as we seem to hear about other celebrities and non-celebrities alike being involved in these issues every day.
Celebrities are not immune to fraud and may take on the unfortunate role of target or willing participant. We hope these incidents of fraud involving the rich and famous increase your awareness.
This article is part of a series exploring some of the most famous fraud cases straight from the headlines, additional articles include:
- Fraud Week 2023: Frauds of the Rich and the Famous
- Frauds of the Rich and Famous: The Star-studded Saga of Jennifer Shah
- Frauds of the Rich and Famous: Billy McFarland and The Fyre Festival
While Fraud Week may only be featured once a year, the professionals in our Consulting group help to rewrite the script for our clients by educating, assisting, and preparing them throughout the year to address their unique fraud concerns.
Check out our Schneider Downs Consulting LinkedIn page throughout the week for additional information from the ACFE. If you have any questions or concerns about fraud in your organization, please contact our team.
About International Fraud Week
International Fraud Awareness Week, or Fraud Week, was established by the ACFE in 2000 as a dedicated time to raise awareness about fraud. The week-long campaign encourages business leaders and employees to proactively take steps to minimize the impact of fraud by promoting anti-fraud awareness and education.
Learn more at www.fraudweek.com.
About Schneider Downs Business Consulting
Our experienced team of business advisors leverage their experience and industry expertise to maximize value and minimize risk during acquisitions, litigation, arbitration, corporate reorganization and other major business transactions and transitions. Our team of experienced business advisors includes Certified Fraud Examiners (CFEs), Certified in Financial Forensics (CFFs) and Certified Mergers and Acquisition Advisors (CM&AAs).
To learn more, visit our dedicated Business Consulting page.
