Metromedia Accounting Scandal
The Metromedia accounting scandal of the late 1990's and early 2000's rocked America . Metromedia Fiber Networks was a giant corporation that was going bankrupt by May 2002.
They had defaulted on payments of more than $8 million and deferred payments to Verizon of about $30 million. While this was all happening and the company was going under, the executives of Metromedia were making over $ 200 million in profits.
Fraudulent accounting practices such as the Metromedia accounting scandal happen all the time and they have to be constantly watched by the SEC and various other policing organizations.
If a company as large as them decides to make extra money on the side all they have to do is change some of their books and pay off some extra people.
They can even use money to pay themselves by making up false companies that they need to pay.
Another way of defrauding a company is very common in stock broker firms where they make up a false stock and tell all their clients that it will be the newest thing to hit the markets and will be the best investment that they will ever make.
They encourage all their clients to buy stocks and then when they have enough money they crash the stock market and keep the money.
The Metromedia accounting scandal was run along similar lines to this type of scheme although it was kept more discreet, just involving a few people who forced the books to turn.
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