Madoff whistleblower alleges GE is a 'bigger fraud than Enron'
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The whistleblower who exposed Bernie Madoff’s Ponzi scheme published a report Thursday alleging General Electric Co. has hidden at least $36 billion in losses in what he called “a bigger fraud than Enron.”

Harry Markopolos 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.

The Houston-based energy company Enron filed bankruptcy in 2001 after it was found to have inflated the value of the company. WorldCom was a communications firm that also engaged in fraudulent activity regarding the company's value.

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.”

GE issued a statement Thursday in response to Markopolos's report, calling all of his allegations “meritless.” The company said its insurance reserves were “well supported” to pay policyholders.

“GE operates at the highest level of integrity and stands behind its financial reporting. We remain focused on running our businesses every day, following the strategic path we have laid out,” the statement says.

The company's shares were down more than 13 percent Thursday morning after the report was released, CNBC reported.

Markopolos disclosed that he and his colleagues are working with an unnamed hedge fund that has bet GE’s share price will decline. Markopolos’s group gave the fund access to the research before it was published and will receive a portion of its profits, The Wall Street Journal reported.

Markopolos plans to present its report to the Securities and Exchange Commission and meet with federal prosecutors and investigators about its findings, according to the Journal.