These tactics can position the executive in a way that allows him or her to engage in accountancy fraud and embezzle money, hide shortfalls or otherwise defraud investors, shareholders, or the public at large.
A control fraud will often obtain "investments that have no readily ascertainable market value",[1] and then shop for appraisers that will assign unrealistically high values and auditing firms that will bless the fraudulent accounting statements.
This can be particularly effective with large campaign contributors like Charles Keating, who with other control frauds in the United States League of Savings Institutions, was able to get his own people placed on the board of the primary regulatory agency, the Federal Home Loan Bank Board (FHLBB).
With the assistance of people like Speaker of the House Jim Wright and the Keating Five, he was able to convert Lincoln Savings and Loan Association into a Ponzi scheme, making millions for himself, while suppressing the investigative and regulatory functions of the FHLBB.
[5] Examples of control fraud include Enron, the savings and loan crisis, Sam Bankman-Fried, and Ponzi schemes such as that of Bernard Madoff.