The story of recently captured hedge fund crook Sam Israel just keeps getting weirder. First he faked his suicide and went on the run, leaving behind a message from the TV show M*A*S*H. Then he turned himself in in western Massachusetts.

Now he's telling the judge that he actually did try to commit suicide but failed. Swallowing morphine tablets and fentanyl didn't do the trick: "I ate the balance of my fentanyl patches because I thought it was better to do myself in than to turn myself in. I woke up battered and bruised and I realized God didn't want me to do that and I turned myself in."

Ah yes -- an obligatory reference to god thrown in for good measure. It looks like we can add Mr. Israel to the long list of "born again until you're out again" criminals.

The list of things Israel stinks at keeps growing: he lost a ton of investors' money running a hedge fund, then got busted when his cover-up efforts failed. Then he tried to kill himself but failed then tried to be a fugitive but failed at that too.

If you have an ADR for Japanese electronics giant NEC, save it as a collectible. In light of the SEC's recent decision to revoke NEC's securities registration in the U.S., there will not be any more of those ADRs. NEC ran afoul of U.S. listing requirements when it failed to file annual reports for 2006 and 2007, and improperly booked revenues for 2000-2006. NEC was also the victim of internal fraud when at least 10 emplyees, over a period of several years, booked millions of dollars worth of fraudulent transactions. NEC had no procedures in place to authenticate or track these transactions.

To be fair to NEC, recognizing software sales revenue up front in complicated under GAAP SOP 97-2, particularly when the software is sold as part of a service package that also includes hardware and/or software maintenance. But NEC was responsible for taking steps to see it was not being robbed blind from within. NEC was delisted from active trading on Nasdaq in November 2007. NEC neither accepted nor disputed the SEC decision. The company has also been under investigation by the Tokyo Regional Taxation Bureau. NEC states it has constructed sufficient internal controls to cut back on the potential for internal fraud. Too little, too late. The stock now trades on the pink sheets.

This post is part of a series on some of the most memorable companies that have disappeared.

Ah WorldCom. Aside from its storied history as one of the world's biggest accounting frauds, I remember it as my first cell phone company. My husband bought me a WorldCom phone as a gift and it turned out to not only have terrible service, but ridiculous billing practices, and we ended up paying to get out of the contract as I recall. I remember thinking that there was something really wrong with that company and later wishing I had pursued it as an investigative story, since I was then a writer at BusinessWeek Online and WorldCom was a hot stock.

But no, I never got onto such a story. In fact, I followed WorldCom's stock with interest since I had picked it in an office stock-picking contest years earlier and felt some satisfaction at its meteoric rise through the 1990s (even though I never actually owned the shares; it was just part of a fantasy portfolio).

But here's the WorldCom history that is worth remembering now: WorldCom started as Long Distance Discount Services (LDDS) in 1983. It changed its name to WorldCom in 1995. A series of mega-mergers transformed the company, culminating in its $40 billion deal for MCI. It was rechristened MCI WorldCom in 1998, the second largest long-distance calling company. The following year, just as it announced a deal with Sprint (now Sprint Nextel (NYSE: S)) that never came to fruition, the telecom industry started a prolonged downturn.

This post is part of a series on some of the most memorable companies that have disappeared.

In the mid-1980s, Barry Minkow was the toast of Wall Street. His Zzzz Best Carpet Cleaning company, which he started in his garage at age 16, was an overnight success and, by 19, he was a millionaire. Investors flocked to buy stock in the fast-growing company that was earning millions from lucrative restoration projects.

There was just one problem: the restoration projects weren't real, the company was little more than an elaborate Ponzi scheme, and Minkow wasn't making his money cleaning carpets. He was laundering money for the mob. After a Los Angeles Times reporter broke the story on Minkow's fraud, the scheme unraveled and Zzzz Best filed for bankruptcy. Minkow was charged with pretty much every white-collar crime known to man, and he spent seven and a half years in federal prison.

But that's only the beginning of the Barry Minkow story: Minkow attended college from his cell, was paroled early at the urging of the judge who sentenced him, and became a pastor in San Diego -- not far from the scene of his crimes. Using the skills he learned committing fraud, Minkow set about uncovering it and, to date, has helped the FBI and other government agencies bust up more than $1 billion in fraudulent investment schemes: an amount far larger than the crime Minkow perpetrated.

Most recently, Minkow has gained notoriety for his accusations of fraud at leading multilevel marketing companies Herbalife (NYSE: HLF) and Usana Health Sciences (NASDAQ: USNA).

Let us know in the comments what you remember about Zzzz Best. And be sure to check out other Companies That Have Vanished.

Of the 50+ business-related books I read each year, maybe 15 were worth reading, in retrospect. Then another five of those are memorable -- in a good year. Hedge fund manager David Einhorn's book Fooling Some of the People All of the Time leapfrogs both of those categories, and establishes itself as a classic of business writing.

The story behind the book is intriguing. It's actually amazing that it ever got published, and tremendous credit should be given to Wiley for taking a chance with such an unconventional tale. Here's the deal: In a 2002 speech at a charity event, Greenlight Capital hedge fund manager David Einhorn gave a speech at a charity event. Asked to talk about his favorite investment idea, he spent 15 minutes explaining why he believe that Allied Capital (NASDAQ: ALD) was a financial crime in progress, ripping off investors and taxpayers as a Small Business Administration lender. Einhorn presented compelling evidence of aggressive accounting and indeed fraud, and disclosed that he was short the stock.

The speech made headlines and the stock tanked. Over the past six years, Einhorn has continued to beat the drum against Allied Capital, presenting information to regulators, reporters, and investors.

In a comment on my post about an internal memo demonstrating that JPMorgan Chase & Co. (NYSE: JPM) was advising its employees to assist home owners in committing mortgage fraud, one reader had this to say:

This is all bull. They don't know who to point there finger at! Some people just have selective memory loss and they simply cannot remember that they to had a say so when they got their home loans! Lets not just blame it on the Realtor or the mortgage broker!

The message here appears to be that consumers should have told the real estate professionals that they were behaving unethically and, in many cases, illegally.

While the SEC is off battling delusional fantasies of naked short sellers "destroying companies," Colorado citizens are evaluating a proposed ballot measure that would really crack down corporate fraud. The proposed law would make executives criminally responsible for fraud at the companies they ran. According to the New York Times, "It would also permit any Colorado resident to sue the executives under such circumstances. Proceeds from successful suits would go to the state."

I'm not so sure about this one. I certainly agree that we need to have greater accountability for executives who violate the public trust. But the idea of any Colorado resident being allowed to sue and have the proceeds go to the state sounds a little hokey. Activist organizations might be able to use a law like this to file frivolous and distracting lawsuits against controversial companies like Wal-Mart (NYSE: WMT).

The fact is that no private individual would sue a company with the proceeds going to the state for any purpose other than revenge or some kind of grudge. People who have been defrauded can file civil lawsuits and they do -- it seems like every time a hot stock goes south, four or five class-action firms rush to announce lawsuits. The SEC can file civil charges as well, and the Justice Department can go after criminals, as they did in the case of Enron executives like Jeff Skilling.

A piece in the latest issue of BusinessWeek discusses an interesting trend among scammers, charlatans, and con-artists: they're renting out virtual offices on Wall Street in an effort to enhance their credibility and project an image of success. For just $100 a month, they get a fancy address to put on stationary, a post office box, and a conference room they can use for occasional meetings -- all shared with dozens, or even hundreds or other clients.

The president of one company that rents out virtual offices to businesses told BusinessWeek that "As much as our services help hundreds of small businesses brand themselves, there will always be crooks who try to misuse the polished facade for their dirty business."

Maybe I'm a prude, but I would have nothing to do with a company using a "virtual office" for its address, even a legitimate one. I would argue that the goal of these set-ups is to mislead potential investors or customers -- projecting an image of something that differs from reality. Even if the company is legitimate, a phony address is still dishonest.

In any case, investors shouldn't be hoodwinked by a fancy sounding address. After all, Worldcom and Enron also had great addresses and pretty offices, and investors lost billions.

To avoid getting scammed -- or just losing money on a bad investment -- there are two things you can do: make sure you understand how a company makes its money, and make sure the returns offered aren't too good to be true. As the managers of West Coast Asset Management wrote in their book The Entrepreneurial Investor, the people who really understood Enron's business model did quite well -- but ended up in jail.

And use common sense. One firm that was using a "virtual office" promised returns of 25-30% per month. That's a better return per month than Warren Buffett earned per year. And if they could earn those great returns, why would they need your money? If it's so risk-free, can't they just borrow it from a bank for a lot less money?

There has been concern for several weeks that Lehman Brothers (NYSE: LEH) might have problems similar to Bear Stearns (NYSE: BSC). Customers might be worried about Lehman's financial health and, if they were to withdraw large sums of money, the brokerage could face liquidity problems.

Just as those concerns appear to be falling, Lehman has been hit by a fraud that may involve amounts as great as $250 million.

According to The Wall Street Journal (subscription required), "swindlers used forged documents from one of Japan's biggest trading companies to bilk it out of as much as $250 million." The money was to go to a division of Japanese firm LTT Bio-Pharma. The capital was secured by certificates from Marubeni, a huge trading company. Marubeni may have to pay Lehman back the capital, but that is not yet clear.

One consequence of the news is likely to be that investor confidence in Lehman will be eroded again. Why the brokerage would extend the money without complete due diligence is certainly a fair question for shareholders to ask.

One more straw on the pile of Lehman's troubles.

Douglas A. McIntyre is an editor at 247wallst.com.

An independent report commissioned by the Justice Department concluded that the "improper and imprudent practices" of now-bankrupt subprime lender New Century Financial were condoned and enabled by the company's independent auditor, KPMG.

The accounting firm allowed New Century to change its accounting to report strong profits during the housing boom, when a more conservative treatment would have shown losses. The company lowered its reserves for bad loans that investors were forcing it to buy back, even as the number of bad loans increased.

The New York Times reports that this may pave the way for New Century to sue KPMG. Seven years after the collapse of Enron, conflicts of interest involving "independent" auditors and their clients who pay them are still costing shareholders billions. Back in October, I posed 2 ideas for ways that issues of auditor independence might be fixed:

• Shouldn't companies be required to change accounting firms (rather than just employees within the same firm) every few years to avoid entrenchment and cozy relationships. When accountants see colleagues leaving for lucrative gigs at the company they once audited, can that lead to a conflict of interest?

• Should companies be allowed to choose their own auditors, or should the SEC consider implementing a system where auditors are appointed by a third-party? Allowing companies to hire and fire their own independent auditing firms raises questions about whether they are really independent.

With a recent -- and idiotic, I would say -- Supreme Court decision making it tougher for defrauded investors to sue investment banks and auditors who aided and abetted in fraud, auditor independence may be more important than ever.

Teach Me To Trade -- the company behind those annoying infomercials full of false promises and exaggerated claims -- has attracted the scorn of the Securities & Exchange Commission, which has filed civil fraud charges against Linda Woolf and David Gengler.

The SEC charges that "In order to con victims into paying as much as $40,000 for TMTT products and services, the Commission alleges that Woolf and Gengler lied about their success with the trading system, when in truth neither Woolf nor Gengler ever purchased TMTT's products or became successful traders."

SEC Chairman Chris Cox chastised the promoters for preying on the "elderly, the desperate, and even the unemployed by promising financial security while instead robbing victims blind."

The Commission alleges that, while the promoters portrayed themselves as successful traders, neither of them had ever reported a profit from trading on their tax returns.

The U.S. Attorney's Office for the Eastern District of Virginia has also filed an indictment against the promoters.

Here's where it gets really interesting. The Teach Me To Trade "system" is part of the the Whitney Information Network (OTC: RUSS), which is dealing with an SEC investigation of its own. That company's namesake and former CEO? Russ Whitney, whose rap sheet includes armed robbery.

It's been said before but it's worth saying again; Late-night infomercials are not the place to find the secrets to tremendous wealth, and if it sounds too good to be true, it probably is.

Government officials have a way of grandly stating what everyone else had known to be obvious for a long time. In this case, FBI director Robert Mueller called the epidemic of mortgage fraud that rose with the real estate bubble a "substantial problem."

The FBI is teaming up with the SEC to investigate 14 companies. According to the Associated Press, "As the nation's housing crisis worsens, there has been a dramatic spike in the number of mortgage fraud cases under investigation. An FBI spokesman said 1,210 such cases are open, up from roughly 800 a year ago."

The FBI has raised the number of its white-collar agents looking at mortgage fraud from 7% to 28% since 2003, and the case load has risen substantially as well. Back in December, Lita Epstein wrote about the soaring levels of mortgage fraud that are driving foreclosure numbers.

It's interesting to think about how much of a role mortgage fraud played in the housing bubble. Rampant lying on loan applications allowed people with shaky credit to buy houses they had no business buying. The effect was to flush tons of funny money into the housing market, causing a huge increase in home prices.

Bubbles and fraud seem to have gone together well throughout history, something I wrote about back in December. The effect of fraud is not just that it rips off the people who are defrauded; it creates a fundamental lack of balance in the market that leads to booms and busts.

While investors on the west side of the Atlantic lament the corruption in the U.S. banking system, it could be that the French system takes home the gold medal. Reports out of the Paris prosecutor's office indicate that rogue trader Jerome Kerviel told investigators, "I can't believe that my superiors were not aware of the amounts that I was committing, it is impossible to generate such profits with small positions."

If this is true, and SocGen knew what was happening all along, then former CEOs like Citigroup's (NYSE: C) Chuck Prince and E*Trade's (NASDAQ: ETFC) Mitch Kaplan will look like choir boys in comparison.

One company that has actually gained from all of this, especially on the heels of the SocGen announcement, is the Israeli security company NICE Systems (NASDAQ: NICE). They recently purchased a company called Actimize which has a anti-fraud product for banks, to help prevent situations like this recent debacle.

What to make of all of this? There will always be banks, and they will always get a little too piggy and screw things up. It's NICE to know that there are some company's out that can try and reign in these guys and save the investor some money.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer has a position and is long NICE and ETFC. He has no positions in any other stock mentioned as of 1/29/08.

eBay (NASDAQ: EBAY) announced this morning that its PayPal unit is buying Fraud Sciences Ltd. for $169 million. Fraud Sciences is a company based out of Tel Aviv, Israel, and the deal is expected to be finalized within the next 30 days.

While eBay has not made any comments on how the acquisition would impact its 2008 numbers, it should help to reduce some concerns over eBay fraud, and possibly increase the number of transactions for the struggling company. The tools and analytics that Fraud Sciences will bring are expected to help enhance fraud management on both eBay and PayPal.

Users have had two main complaints about eBay recently: high fees and high fraud risk. The company said last week that it would be announcing a new fee schedule shortly to address the first concern. With today's news, the online auctioneer is addressing the second main concern.

As Meg Whitman's tenure as CEO is coming to a close, new CEO John Donahoe is definitely not wasting any time trying to bring the old eBay back to life. Just how successful Donahoe will be at restoring confidence in its long time customer base remains to be seen, but for sure he has taken two big steps in the right direction.

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer

If someone you know was on the front-page of every newspaper for a scheme that cost France's second-largest bank $7.2 billion, what's the first thing you'd do?

Exactly: Delete him as your friend on Facebook. According to DealBook, that's exactly what happened: Before the story broke, Jérôme Kerviel had 11 friends on Facebook. Now he's down to just one.

I'm surprised everyone is so quick to delete him: I would think it would be exciting to be Facebook friends with someone destined to live in infamy. I'd add him as a friend now, but something tells me he won't be logging on for awhile.

Meanwhile, numerous "Facebook groups" devoted to the former trader have emerged. My favorite has to be the one called "If 5billion persons join this group & give 1€ we save Jerome Kerviel career." The group's founder writes that, "If (and only IF) 4,9 billion persons join this group and IF each one give 1€, we can refund Société Générale and save Jerome Kerviel's career ... But the question is: should we?"