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Madooff whistleblower claims GE committed accounting fraud – Source – Yahoo Finance (08/16/2019)

The accountant who blew the whistle on Bernie Madoff’s scheme is blowing the whistle again with a new report attacking GE’s (GE) accounting practices. In a 175-page report posted online, forensic accountant Harry Markopolos and his fraud team allege that GE is committing $38 billion in accounting fraud.

“[I]t’s the biggest, bigger than Enron and WorldCom combined,” he wrote. “In fact, GE’s $38 Billion in accounting fraud amounts to over 40% of GE’s market capitalization, making it far more serious than either the Enron or WorldCom accounting frauds.” Markopolos is calling GE “GEnron,” because the company appears to be “using many of the same accounting tricks that Enron did.” At the center of his investigation are eight long-term care insurance deals that GE executed. The report alleges that the GE has been hiding “massive loss ratios” and “exponentially increasing dollar losses.” Markopolos warns that GE losses are about to spike. The report says that GE needs $18.5 billion in cash immediately to deal with a wave of impending claims in the insurance unit. Further, it will need another $10.5 billion to address a non-cash charge that will come due by 2021.

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