Madoff whistleblower: General Electric 'bigger fraud than Enron'
Topics: GENERAL ELECTRIC FRAUD WHISTLEBLOWER
The whistleblower who exposed Bernie Madoff’s Ponzi scheme purports to have found billions in fraud in GE's accounting practices between 2002 and 2018.
The 175-page report accused the company of masking financial issues for years through fraud and changes to its financial statements’ formatting that helped it hide costs.
The website accused the company of using “an Enronesque business approach that has left GE on the verge of insolvency."
"This is my accounting fraud team's ninth insurance fraud case in the past nine years and it's the biggest, bigger than Enron and WorldCom combined," Markopolos wrote in the report.
One allegation in Markopolos's report warns that GE cannot afford to cover the claims on its long-term insurance policies, which help policyholders pay for nursing homes and home health care, The Washington Post reported. The document also accuses GE of reporting earnings on people who held the policies when they were young, without correctly calculating how much it would have to spend to fund benefits for policyholders later in life.
Another allegation in the report says that GE should have recorded $9.6 billion of losses from Baker Hughes, an oil-and-gas company it owns, instead of the $2.2 billion it reported.
Markopolos and his team of forensic accountants warned that GE's fraud is “just the top of the iceberg.” ■