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Biggest Stock Market Scams in History – Part I
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A wicked web of deceit, with just a good measure of theft and forgery thrown in for old time’s sake! Most of the time when we read about history, the biggest this or the fastest that related to the stock exchange it’s (so we are told) so that we don’t make the same mistakes twice and then some bull gets spun about how we need to learn from our mistakes. But, if the truth comes to the truth, it’s not this that people are interested in, is it? What they want to learn is how and why and when and where the guy that got caught actually went wrong, so they don’t make the same mistakes twice!
Let’s face it, when it boils down to it, people are in the investment game not because they are interested in making loads of money and making the sale or the purchase of the decade (or not only that), but simply because they have been bitten by the money bug. The thrill of the chase and the game. The competition with someone else. It’s legalized drugs, it’s gambling, its addiction. The sweaty palms, the furrowed brow, the scanning of the papers, the elation when it works and the belief that the next one will be bigger and better.
Throughout history there have been guys that have been smooth-talkers. Ones that had the propensity to turn horse manure into gold. The ones that enchanted and then disenchanted us all when all was revealed about the scams they had been running. Being a swindler is as old as the hills. Cheating and defrauding people has always happened. But, if there’s one thing you have to admire in the following list, it’s the people that did it, sometimes so blatantly obviously. The ones that we should have smelt, as they were standing right under our noses. But, we were probably blinded by the money-making, and anyway, everybody loves a scammer.
They’re all around us, the card sharks in the street, the con artist on the other end of the phone. The slicker, the beguiler in that shop that sells you just what you never needed. The welcher that never pays the debt back. The clip artist that fleeces you for money and runs you dry. Damn slickers! The stock market abounds with them. It’s all about confidence on the stock market. It’s all about belief and faith. It’s the best place to deceive.
So, here they are, the ones that will go down in history as being the biggest slickers and cheats around! There are so many to choose from that these are the ones from the 1980s and the 1990s. More will follow!
1. Barry Minkow
A 15-year-old kid, which makes the story all the more worthy. The guy went from nothing to millionaire, with an IPO and hit the big time. Then, he ended up in prison to pay for the dastardly deed. You have to admire him though. A smooth-talking crook as good as they ever get.
He founded ZZZZ Best, a carpet-cleaning and restoration company at the age of 15, in San Fernando Valley. He had trouble making ends meet and despite his idea, he had banks closing down on him at the start because he was under age and minors can’t sign contracts or checks. He joined forces with Tom Padgett and forged documents for carpet restoration, stating that he was working on various projects to make it look like he had business. They set up a company to front the operation, Interstate Appraisal Services. The fake company gave the banks the ‘proof’ that he was raking it in and everybody believed him. Kids don’t lie, do they? The insurance company amounted to some 86% of his revenue. But, that was all fake. The carpet-cleaning company was bone fide, though. He financed his carpet-cleaning business by check-kiting schemes: he wrote checks from account X to finance account Y, and then wrote checks immediately from account Y back to account X and the money (which never existed) just got transferred from one account to another. Child’s play, wasn’t it? Now, don’t go getting any ideas, the banks will find out (one day)!
When Minkow left school, he needed investment and got it by meeting Jack Caitan, a businessman from LA that was involved in organized-crime deals.
Within four years, by 1986, Minkow had decided to go public. By some superb twist of fate, the accountant that was involved in the launch on the NASDAQ never visited the insurance restoration sites and so never discovered that they were nothing more than empty mailboxes in San Fernando Valley. Minkow owned 53% of the company that was launched in January 1986. He became a millionaire! But, the company had no money. He couldn’t pay anyone and so decided to raise $15 million through an initial public offering of the company’s stock. He set up fake offices and buildings for the insurance side of things and the financial consultant (Mark Morze) faked thousands of documents. At 21, he became the youngest guy in history to have an IPO!
TV ads were launched and the flash cars were bought. Ambitions and greed shot through the roof of all boundaries of reason. Within just over a year, by February 1987, the company was being traded at $18 per share. It was now worth $280 million. Based on what? Nothing! Minkow was worth an estimated $100 million. He negotiated a deal and merged with the bone fide carpet-cleaners that were used by Sear’s. That was for $25 million, with ZZZZ Best being the surviving company. Apparently, he had hoped to use the cash from the new company to finish the fake business and go legal.
The Los Angeles Times was tipped off about $72, 000 in credit-card fraud that Minkow had run up and that was just days before the signing of the merger deal. Shares plunged by 28% after that article. From then on, things just went from bad to worse. Shares tumbled to just $3.50 each by July 1988.Minkow ran off with $23 million in company funds and the company went bankrupt.
The police stepped in and found that he had been laundering money and that it was an organized crime-den. At the hearing, there were 54 counts of racketeering. Dummy companies were discovered all over the place and 90% of the company’s activities were now considered as fraudulent.
He got 25 years on March 27th 1989 and had to pay $26 million in restitution.
He was sentenced on the following counts:
- racketeering
- securities fraud
- embezzlement
- money laundering
- mail fraud
- tax evasion
- bank fraud
- credit-card fraud.
It cost the investors that were taken in by his talking to the tune of $100 million. He is considered as the largest one-man show for scams in the history of the stock-market. When he got out of prison in 1995, he had found god and seen the light. He became an Evangelic Pastor. But, he never lasted long. He was later involved in other shady deals, too, but that’s another story!
2. Michael Milken
Milken was known as the ‘Junk Bond King’. He worked for Drexel Burnham Lambert and he was their top man in the 1980s. At the height of his time, he was raking in $1 billion over a four-year period. That might sound like just peanuts today compared to some guys, but back then it was a record. He is still the 48thrichest person in the world, according to Forbes and has a net worth of $2 billion.
He provided the stock trader at Drexel (Ivan Boesky) with huge sums of money and they split the profits when he used insider knowledge of takeovers to hit the jackpot.
Milken was arrested and indicted in March 1989 on 98 counts of racketeering and fraud. He was accused of misconduct, insider trading, stock parking (or the concealing of the real owner of stock) and tax evasion. He had been paid $5.3 million in 1986 for his share in illegal trading profits. He pleaded guilty in April 1990 to:
- six counts of securities and tax evasion.
By pleading guilty immediately, he avoided further investigation and the other charges were dropped. He paid $1.1 billion in lawsuits related to these actions (of which there was a fine worth $600 million). He got sentenced to ten years in prison, but served just 22 months.
He was banned for life from the securities industry. But, in February 2013, the Securities and Exchange Commission carried out an investigation to determine if he had violated this ruling, since he had allegedly provided consultancy to Guggenheim Partners regarding investment.
He turned good and bought himself a couple of years less in purgatory, though. When he got out of prison he set up institutes for medical-research into prostate cancer. He was called ‘The Man Who Changed Medicine’ by Fortune magazine and it seems like prisoners can make it good when they get out of jail. I wonder if the same goes for everyone?
3. Hiromasa Ezoe
Ezoe was at the bottom of the insider trading scandal with a bit of corruption thrown in for good measure at Recruit, a human-resources and classifieds company in Tokyo. As Chairman, he offered shares to politicians and senior executives in a subsidiary company called Cosmos just before it went public in 1986.
Cosmos was launched publically, the shares soared and most people ended up making a profit of 66 million Yen each. The Prime Minister of Japan at the time, Noboru Takeshita, and the Deputy Prime Minister, Yasuhiro Nakasone, were involved as well as other prominent members of the government. The government was forced to resign over the scandal.
- There were 155 people that were indicted in the insider-dealing scheme.
- The Nikkei fell by 40% as a result, rocked by the political scandal.
What happened to Ezoe? His trial lasted 13 years! He was given a suspended sentence after all of that! Just makes you wonder why they even bothered after all.
4. Bernard Madoff
No scammer would look himself in the face unless he pronounced the words Madoff, would he? This guy was the biggest scammer possibly of all. The dark side of Wall Street!
He started swindling people way back in 1989, if not well before that. Remember, we probably only know the half of it. Madoff’s fraud was the largest scam ever to have taken place in the world and in history. Primarily because it lasted so long (until 2009). He cheated the world’s investors out of $65 billion. There are 9, 000 claims that have been filed against the guy!
What was he offering? Low-risk, high-yield (sounds too good to be true, doesn’t it?). It came to light as early as 1999 when the Securities and Exchange Commission was made aware of the mathematical impossibility as to the gains being made by Madoff (at least the gains that were on paper). The New York SEC ignored the complaints in 2005 and 2007. The Boston SEC did the same as early as 2000 and 2001! Were people blinded? Or were they just turning a blind eye to the scam?
False trading reports were being issued in the back office as and when Madoff ordered them for each client. Trades were backdated and manipulated, accounts were falsified. He simply deposited the client’s money into a special bank account at the Chase Manhattan Bank. He never invested it as they had believed he was going to. As clients asked for their money, he removed it from the account. Everything was going fine, at least until people started wanting their money back all at the same time. His was considered as the biggest Ponzi Scheme ever.
He accused his four largest clients in an interview from his prison cell saying that they were at fault: Norman F. Levy, Jeffry Picower, Stanley Chais and Carl Shapiro. They knew, according to Madoff exactly what he was doing and they should have stepped in before! He said that J. P. Morgan was in on it all too! They should have been alerted by the millions that were going into and out of the accounts. Better to blame someone else, isn’t it?
In June 2009, he got a ridiculous (ridiculous not because of what he did that didn’t deserve it, but because it will never be served) 150 years in prison at the age of 71 and was found guilty on 8 counts of fraud, money laundering and theft. He had been turned in by his two sons.
5. Anthony Elgindy
Coming after the main-man Madoff, this guy seems like he is just small-fry. He was founder of Pacific Equity.
Elgindy was providing stock advice via an internet site in the 1990s to people who were paying up to $600 a month to get his tips. Little did they know he was in actual fact working alongside the FBI agent that was investigating companies and so had inside information.
He also used blackmail to extort funds from other companies, telling them that he would reveal negative (false) elements about the companies that his clients would believe. He was charged with stock manipulation and was fined $51, 000 for revealing information about companies. However, this was overturned by the Securities and Exchange Commission that decided that it was not manipulation to reveal information that was indeed true and accurate.
However, by 2005, he had been charged again for fraud, racketeering and other crimes in relation to FBI and SEC investigations that he had revealed to the public. His trial lasted four months and he was accused of revelations concerning 32 different stocks. He ended up with nine years in prison, however. He appealed, but his sentence was upheld in 2008. His total gains came to a measly $66, 000, which if you compare it to what Madoff ended up with and how much he lost for his investors, this guy really looks like he either got used as the scapegoat or got caught with his hand in the bag at the wrong time.
Elgindy will go down in history as the short seller that people were afraid of; the guy companies didn’t want mentioning their names with adverse stuff about their companies as it would influence trades that day.
So, just a few examples of history’s swindlers. But, history is always in the making. It’s being done today! There are people that in five years from now will be arrested, the ones that created scams, who fleeced the poor gullible ones into parting with their hard-earned cash and that thought they wouldn’t get caught. The perpetrator is attractive. He draws us to him because he made us believe in some stupid scheme that we thought would never work and yet it did for a bit, and fooled us all.
SO, WHO DO YOU THINK WILL BE ADDED TO THAT LIST OF SCAMMERS AND SWINDLERS? WHO’S THE LYING, CHEATING, GIFTED CHISELER THAT WILL WELCH AND FLEECE YOU DRY TODAY?
In the next installment, we will take a look at the stock-markets scams of the 2000s and bring us closer to the present time!
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Supplied Milken with Lambos, Porsches - total conman, thief
USG
"WHO DO YOU THINK WILL BE ADDED ..."
The human species as a whole, whose realities are always based on organized lies operating robberies, while continuing to deliberately misunderstand that.
And, furthermore, any life form that can build a mental model of the world around it, which includes a model of itself within that model of the world, which deliberately denies and suppresses the realities about themselves doing that.
No "scams" can exist without there first being the notion of private property. People like to presume that there is some magical threshold where private property exists without some system of public violence. The deeper philosophical questions regarding how some part of the environment is subtracted from the Whole tend to be either taken for granted, or misunderstood in backward ways.
People like to think through presuming there are some inherent dualities, which enable them to tend to believe in false fundamental dichotomies, and the related impossible ideals. There is a presumption that the subtraction of some part from the Whole is not necessarily an illusion, or a relative lie. After that sense of subtraction is presumed to be absolute, then across the relative boundaries which are defining the subtracted part, energy is taken, in ways which are basically robbery.
The problem with any all-star list of "scams" is that those tend to deliberately ignore that governments are the biggest form of organized crime, controlled by the best organized gang of criminals, whose relative triumphs of being able to back up lies with violence, or operate organized lies and robberies, are presented by them as being relatively positive things, rather than relatively negative things.
Everyone who "owns" anything does so on the basis of some relative subtraction of some part from the whole environment. All private property is based on backing up claims with coercions. The most abstract of those enforced frauds become money, which is measurement backed by murder. However, the subtraction is never absolute, and so, the processes of robbery are never absolute.
Discussions of apparently illegal and criminal scams tend to be presented within the biggest bullies' bullshit world view, that is based on secretly subtracting the subtraction, so that the relative illusions of relative separations of the parts from the Whole are presented as being relatively positive truths, rather than relatively negative illusions or lies.
The most extreme manifestations of frauds take place inside of a context where there is nothing but relative frauds. The most successful frauds do not get stopped. Rather, the greatest of crimes enable those who get away with having done those to become the most wealthy and powerful people. From that perspective, families like the Rothschilds were orders of magnitude greater scammers than anyone listed above. Indeed, as Balzac wrote, every great fortune was based on some great crime.
There is a desire for people to regard their private property as being due to them being productive. However, the production of destruction controlled production. Furthermore, all human beings and human civilizations act as entropic pumps of energy flows, in which the end result is an overall increase in entropy. Anyone who "produces" something is transforming natural resources, which became privatized through a long history of claims backed by coercions being exerted.
Lists like the one above are screwed up by two basic perceptual errors. The first and most profound is to fail to see that anyone who "owns" anything is necessarily doing so through some systems of organized lies and robberies. The second, and less significant error, which follows from the first, is to neglect to include those who got away with the greatest of all scams, and therefore, ended up being the greatest of all "owners." Since all private property is based on backing up claims with coercions, and thus, the foundation of political economy is enforced frauds, one only as to look at how much a person "owns" to tell to what degree they have been successfully engaged through the history of organized lies and robberies.
The basic problem with the biggest bullies' bullshit world view, that is based on having secretly subtracted the subtractions, so that private property is given relative positive values, rather than relative negative values, is that those illusions of separating parts from the environment tend to kill that environment, through the longer-term consequences of those illusions being reified.
The simplest example is to imagine that human animals live by killing and consuming other living beings (within which context also manifests human killing each other as well.) While it is necessary that human animals must live by being entropic pumps of energy flows, the understanding of that has been almost totally reversed by the triumphs of the biggest bullies' bullshit world view. One may imagine than some ancient hunter gatherers used to apologize to the organisms that they killed in order to live. However, Neolithic Civilization became runaway systems of slavery, where more and more, God was Privatized, and the Environment was Privatized, and so on and so forth, to the levels we see today, where the public "money" supply has become almost totally privatized, while the public murder systems are following after that to also become more and more privatized.
Privatization is the processes of backing up lies with violence. Any and all private property must be based on the history of backing up claims with coercions, since there is no private property outside of some system of public violence. Paradoxically, that has become presented as being a relatively positive thing, rather than a relatively negative thing.
Inside of that context, where the illusions, or lies, that any part can actually be separated from the Whole, some of those parts become private property, which is "owned" inside of some system of public violence, whereby those claims are backed by coercions. Thus, theere develops dynamic equilibria between the different systems of organized lies operating robberies.
The scam artists listed above drove sufficiently flagrant disequilibria, that they were corrected, by the perpetrators being caught and punished. However, who or what catches and punishes the human species as a whole, or an entire civilization, for operating its kinds of organized lies and robberies, in more and more unbalanced ways ???
The essential paradox is that human beings and human civilizations must necessarily live as entropic pumps of energy flows, however, that has developed in ways where the concept of entropy has been inverted, and consequently perverted, by treating private property as being relative positive values, rather than relative negative values. That is the overall context, in which the biggest forms of organized crime are governments, which are controlled by the best organized gangs of criminals. Hence, in that context, while those mentioned on the list above may have their disequlibria corrected by others (by governments enforcing their rule of law), who or what is going to correct the disequlibria of the human species as a whole, as manifested through the social pyramid systems of Neolithic Civilizations?
Neolithic styles of civilization are based on being able to back up lies with violence, to the degree that that becomes presented as relatively positive things to do, rather than perceived as relatively negative things to do. The life that is lived by killing and consuming other living beings (as well as killing other humans who get in the way) has become presented through entrenched systems of false fundamental dichotomies, and the related impossible ideals, because DUALITIES are so taken for granted, despite those being perceived in systematically backward ways.
Overall, the human species is committing collective suicide, and killing off life on planet Earth as whole, due to the runaway systems of legalized lies, backed by legalized violence, which are cutting the world more and more up into privatized pieces, that tend to deliberately ignore the whole environment as much as possible, in ways which are preventing that life as a whole from continuing to live.
The greatest of all enforced frauds is the established monetary system. However, while a few extreme manifestations of that get arrested, those systems overall can not arrest themselves. Rather, the social systems that exist now are runaways of unrepentant and unapologetic systems of lies operating robberies, which are as profoundly dishonest about themselves to themselves that they can possibly be.
As I said, any life form that can make a mental model of itself, within its mental model of the world, is going to have all the same problems as human beings and human civilizations already have. At the present time, we are not able to imagine any feasible ways for the runaway systems of the biggest bullies' bullshit world view to be prevented from continuing to deliberately ignore the elementary principles of philosophy and genuine spirituality.
The resolutions of human conflicts in the past has driven the selection of civilizations based on the history of warfare, wherein social successes were based on backing up deceits with destruction, which then enabled the building of political economy on the basis of enforcing frauds. By and large, the ways that all forms of private property have relative negative values, rather than relative positive values, is as deliberately denied and ignored as much as possible, especially by those who assert the most social ownership over such private property.
That is the overall context in which a list like the one above has been drawn up. There is an implicit presumption that some kinds of private property were somehow not based on systems of claims backed by coercions, or lies operating robberies, when that was the universal feature of all human beings and human civilizations operating as entropic pumps of energy flows. The biggest bullies' bullshit world view was built into the backward structures of the dominate natural languages and philosophy of science. For example, an arbitrary minus sign was inserted into the equations of thermodynamics and information theory, so that the measurements of power and information would end up having relative positive values, rather than relative negative values, so that would continue to be consistent with the biggest bullies' bullshit world view.
That is the overall context with respect to any list of scams, as relatively more extreme forms of disequilibria in the systems of organized lies operating robberies (where fraud is symbolic robbery). In fact, the entire human species, through the development of Neolithic Civilizations, have become criminal con artists, running sham scams whose disequilibria are becoming more blatantly severe every day. Thus, there are developing irreconcilable social polarizations, and even worse irreparable destructions of the natural world, because everything is being done in ways which misunderstand everything in the most extreme ways possible, due to the resolutions of conflicts having favoured the most psychotic and psychopathic people in the short-term, while the longer term consequences of that have not been able to matter much.
A list like the one above should add the human species' Neolithic civilizations, and could also add any other life forms that did not sufficiently understand the elementary principles of philosophy and genuine spirituality, regarding their ability to make and maintain mental models of the world, with mental models of themselves, within those mental models of the world. While any such beings necessarily are entropic pumps of energy flows, would they necessarily continue to misunderstand the concept of entropy backward, and generally misunderstand everything else, such as private property, and money, in the most deliberately backward ways possible ???
At the present time, I am not aware of any other examples than human beings' current civilizations. They are manifesting the overall results of such a criminally insane civilization, that it appears to be preparing to commit collective suicide, as well as is causing the mass extinctions of many other life forms. All of those trends have been on exponential growth curves, as human beings became better and better at being dishonest and backing that up with violence, so that ability to make a killing has become extremely unbalanced, to the degree that it is killing off the planet as a whole to an increasingly significant degree.
Social systems that enable some scam artists to get away with the facts noted in stories listed above, manifested those as merely some symbolic examples of the most extreme forms of what is otherwise always happening throughout the entire established political economy, which is all based on enforced frauds, since it operates through fundamentally fraudulent financial accounting systems. In that context, it has become quite difficult to imagine how the human species can survive their current kind of civilization having developed globalized systems of electronic monkey money frauds, backed by the threat of force from apes with atomic bombs. Progress in science and technology is being channeled through a civilization based on being able to back up lies with violence, while attitudes of the maximum possible fear and ignorance are being maintained towards those phenomena, by the biggest bullies, and their bullshit world view.
The list of scams above were merely some particular extreme examples of the general pattern of social facts, wherein governments are the biggest forms of organized crime, controlled by the best organized gangs of criminals, through systems of legalized lies, backed by legalized violence, which deliberately misunderstand themselves in the maximum possible ways, while, at this point in time, it is difficult to imagine any possible ways that a species that develops more and more advanced science and technology could continue to survive, while still maintaining attitudes of deliberately ignorance towards the elementary principles of philosophy and genuine spirituality.
As soon as any being that can develop a mental model of itself, within its mental model its world does that, it "should" develop the elementary principles of philosophy and genuine spirituality, in order to better comprehend what it is doing. However, real human history has resolved conflicts through the use of deceits and treacheries, which has then enabled the creation of a civilization controlled by enforced frauds. The same short-term selection pressures that shaped human civilization would appear to be similar problems for another other life forms that could develop language. At the present time, we do not know how to develop any better longer term resolutions of the chronic political problems inherent in the nature of life, and do not know for sure about any others that managed to do so.
While any such "people" must live as entropic pumps of energy flows, our civilization has managed to understand the concept of entropy, and everything else related to that, in the most backward ways possible. In each short-term increment, the biggest and best organized gangs of criminals continue to be socially successful. In that sense, therefore, our entire civilization is like those persons listed above, at some of the earlier points in their careers, when they were still getting away with their scams, until those became so extremely unbalanced that they were arrested, and then faced some of the consequences of how unbalanced their behavior had become.
Our globalized civilization as a whole is reaching similar tipping points, where its previously successful scams, based on getting away to lying to itself, are generating extremely unbalanced situations. The established systems of enforced frauds are the banksters' bullshit world view, that dominates their field of so-called economics, where their economists are intellectual mercenaries, who are proportionately paid to be professional liars and immaculate hypocrites, in order to promote the banksters' bullshit world view, in ways which deliberately ignore and deny a wide range of social, biological and physical facts, but, in the short-term make those participating in those systems of organized lies and robbery more wealthy and socially powerful.
Human beings NECESSARILY live through systems of organized lies operating robberies, because human beings NECESSARILY live through being able to name things, and tell stories, i.e., make mental models of their world, which include mental models of themselves within their mental models of their world. However, the history of the social pyramid systems of Neolithic civilizations has been the history of warfare, between societies, which was matched by how the ruling classes within a civilization controlled those that they ruled over, through systems of lies backed by violence.
Therefore, the fundamental structures of human civilizations MUST necessarily be some systems of organized lies operating robberies. However, that situation has been as misrepresented and misunderstood as possible, because the ruling classes have waged a war against the consciousness of those that they ruled over. Therefore, the elementary principles of philosophy and genuine spirituality have been as deliberately suppressed as possible. Hence, we are living inside of a Bizarro Mirror World, or Wonderland Matrix, where everything is being perceived backward, and therefore, our collective behaviors are becoming more and more absurd ...
Our civilization has become runaway criminal insanities, which are reaching those points where our previously successful scams are no longer working as well as they used to ... However, after the human systems of artificial selection become so totally psychotic that they deliberately divorce themselves from elementary philosophy and genuine spirituality, to the degree that our current kind of civilization has done, it has become almost impossible to comprehend what could correct those errors, or arrest the continued development of those criminally insane scams that currently control our civilization ???
Lord Blackass did not even get a honorable mention. Really. They bet against USA schools.
They bet against Greece after selling them the dirty loan to fail deal.
They got the FED to make them a bank only so they could get cheap money.
On investmen Bank catagory they alone have the largest amount of debt on books.
Hello, must I say more. I can Eh.
Janet Yellen, Ben Bernanke just laugh at those peeps.
"SO, WHO DO YOU THINK WILL BE ADDED TO THAT LIST OF SCAMMERS AND SWINDLERS? WHO’S THE LYING, CHEATING, GIFTED CHISELER THAT WILL WELCH AND FLEECE YOU DRY TODAY?"
Congress (circa 1982 -present), Supremes (circa 1982-present), President (circa 1982-present), Federal Reserve (circa 1913-present), Department of State (circa 1982-present), Department of Defense (circa 1963-present), Department of Oceania Security (circa 2001-present)...
have I missed anyone?