Pension Fraud

As companies worldwide tighten their belts, employee pensions are being reduced or eliminated. But some employers are stepping over the line and pocketing pension funds. Learn how the Cayman Islands' National Pensions Office caught one serious offender. And gather some transferable tips for other cases.

"Jack," the president and CEO of "BACME Limited," in the Cayman Islands, loved the finer things in life -- boats, airplanes, Jet Skis, and taking money from his employees' pension fund to pay for it. Though the islands had recently passed a law to catch fraudsters like Jack, he told his friends that the new legislation was just a tiger with no teeth. He didn't realize that he would soon be missing a large chunk of his posterior.

Ahhh, the Cayman Islands. Sunshine, azure waters, beach volleyball, and no taxes. What a wonderful place to work and retire! Unless your employer pirates your nest egg and spends your earnings on fancy toys that will make his life more comfortable at your expense.

You'd think that in a place where there are no taxes, an employer would be more than willing to abide by the few required responsibilities of an employer, one of which is to provide pension coverage for their employees and themselves.