The Most Corrupt States

As money pours into the Gulf, The Daily Beast crunches the numbers, from public embezzlement to private sector fraud, for all 50 states to rank which play dirty—and which have cleaned up their act.

#1, Tennessee


Public Corruption: 18
Racketeering & Extortion: 11
Fraud Rank: 7
Forgery & Counterfeiting: 5
Embezzlement: 9

Recent Scandal: Here's a foolproof recipe for corruption: a former policeman commingling with gang members. Milburn Williams, a retired police captain from Newport, ringleaders Raymond Hawk and Grant Williams, and 20 others were indicted on racketeering, drug trafficking and a slew of other charges last year in Greeneville. The sting operation was headed by the Federal Bureau of Investigation and centered around a chop shop called "H-1 Auto", later renamed "A Automotive." For six years the chop shop was the command post for an operation that allegedly moved stolen property and goods across state lines and sold cocaine and marijuana. The most serious of the charges carry up to $2 million in fines and 40 years in prison.

#2, Virginia


Public Corruption: 14
Racketeering & Extortion: 9
Fraud Rank: 9
Forgery & Counterfeiting: 18
Embezzlement: 5

Recent Scandal: Iris F. Allen, a former claims managers at the Virginia Birth Injury Fund—created in 1987 to provide lifetime medical benefits to babies with born with severe neurological problems—concocted one of the oldest embezzlement schemes in the book. She created two phony companies and had the BIF solicit her companies for services without disclosing she was the owner. For five years Allen submitted fake or inflated invoices, netting $784,000. She pled guilty to the scheme in February and could get up to 10 years in jail when she is sentenced later in May.

Rogelio V. Solis / AP Photo

#3, Mississippi


Public Corruption: 5
Racketeering & Extortion: 17
Fraud Rank: 22
Forgery & Counterfeiting: 16
Embezzlement: 3

Recent Scandal: The man who put Medgar Evers' killer behind bars in 1994 is now a convicted felon. Attorney Bobby DeLaughter constructed an airtight case against Evers' murderer, Byron De La Beckwith, and was rewarded in 2002 when he became a state judge. But in a case of misplaced trust several years later, DeLaughter lied to a federal agent investigating corrupt attorney Dickie Scruggs, who had paid a friend of DeLaughter's $1 million to influence a case. DeLaughter denied ever taking any money, or being influenced by his friend, but pled guilty to obstruction of justice. "The man has now been destroyed, politically and economically. It's that serious," said Medgar Evars' brother Charles.

#4, Delaware


Public Corruption: 9
Racketeering & Extortion: 51
Fraud Rank: 4
Forgery & Counterfeiting: 1
Embezzlement: 1

Recent Scandal
: Carlene Lloyd and her husband Richard aren't exactly a modern Bonnie and Clyde, but they ended up with way more money than the infamous bank robbers ever did. Carlene and Richard embezzled $220,597.72 from New Castle-based Drywall Inc., where the duo worked. Carlene, working as the office manager, printed payroll checks which were deposited by the couple and later deleted from the company's database. Both are staring down the barrel of felony theft, forgery, and conspiracy charges.

#5, North Carolina


Public Corruption: 36
Racketeering & Extortion: 22
Fraud Rank: 1
Forgery & Counterfeiting: 7
Embezzlement: 2

Recent Scandal
: Kalu Kalu and Martin Ifeani Iroegbu of Raleigh netted more than $12 million in a Medicare fraud scheme, but they acted more like old-time grifters than seasoned criminals. The team, doing business with legitimate-sounding company names like Enuda Healthsource and Universal Medical Supply, would give presentations at homes and churches, obtain Medicare numbers of unsuspecting patients, and then send prescriptions for unnecessary medical equipment to patients' physicians for signature. The physicians would often nullify entire prescriptions, but the grifters charged Medicare for the medical equipment anyway. Kalu was sentenced in March to 90 days in jail and was ordered to pay more than $4 million in restitution.

#6, Florida


Public Corruption: 12
Racketeering & Extortion: 6
Fraud Rank: 17
Forgery & Counterfeiting: 21
Embezzlement: 13

Recent Scandal:
In Florida, one recent Medicare fraud case soars to new heights. By all appearances Ihosvany Marquez was a legitimate businessman interested in community health, running eight health clinics in Miami and Orange County. But each clinic, in fact, had a fake owner who would sign for fraudulent charges for expensive treatments such as infusion therapy and injection therapy. Marquez then laundered the money through a car dealership and check cashing stores, to the tune of $61 million in total claims. Marquez used his windfall to live the high life, buying luxury cars, including a Lamborghini Gallardo, investing in racehorses and spending hundreds of thousands of dollars on jewelry.

#7, Nevada


Public Corruption: 39
Racketeering & Extortion: 4
Fraud Rank: 10
Forgery & Counterfeiting: 19
Embezzlement: 4

Recent Scandal: Longtime North Las Vegas Councilman William Robinson was caught in the corruption web last year when it was revealed the FBI investigated him for taking bribes in the 1990s. A local businessman says he introduced Robinson to an undercover FBI agent posing as a mobster from Detroit. Robinson allegedly agreed to push for a rezoning measure so the mob could build a new casino in exchange for cash. "The FBI wanted it clear that in exchange for the money he was being paid, that they bought his vote, which he admitted, ‘You have my vote," the businessman said. Despite transcripts of the conversations, Robinson has vehemently denied the allegations and charges were never brought.

George Widman / AP Photo

#8, Pennsylvania


Public Corruption: 15
Racketeering & Extortion: 7
Fraud Rank: 16
Forgery & Counterfeiting: 27
Embezzlement: 27

Recent Scandal:
A bug found in 2003 in the office of then-Philadelphia Mayor John F. Street was the tip of a secret FBI corruption investigation that ultimately netted the conviction of city treasurer Corey Kemp on charges of conspiracy, fraud, and tax evasion. Kemp left office just a year and a half after he was appointed by Street and was sentenced to 10 years behind bars in 2005. "I think I'm smarter, wiser," Kemp said from prison. "I'm definitely more focused.

#9, South Carolina


Public Corruption: 42
Racketeering & Extortion: 14
Fraud Rank: 3
Forgery & Counterfeiting: 20
Embezzlement: 14

Recent Scandal: Former Union County Tax Assessor Willie E. Randall, Jr. pled guilty in January to a range of corruption charges. His crime plan, which involved money laundering, extortion and bribery, allowed the tax assessor's office to keep track of a lot more than old receipts. Cocaine and hydrocodone were stored and distributed out of the office, and Randall faces 190 years in jail and $5.25 million in fines.

AP Photo

#10, Oklahoma


Public Corruption: 21
Racketeering & Extortion: 26
Fraud Rank: 18
Forgery & Counterfeiting: 23
Embezzlement: 6

Recent Scandal:
Merry Christmas indeed. A Texas-based businessman sent former Oklahoma Insurance Commissioner Carroll Fisher an envelope that said "Merry Christmas" and, surprise, surprise, a hefty check was nestled inside. Fisher characterized the check as a loan, but investigators didn't see it that way. Prosecutors didn't have enough evidence to saddle Fisher with a bribery conviction, but Fisher did plead no contest in February 2009 to operating an illegal charity and misuse of early education funds. The judge went easy on him, sentencing 6 months in a private correctional facility at Fisher's expense, because Fisher had already served 14 months on a campaign corruption conviction. "This is a man who has been very much humbled by what he’s experienced,” his attorney said.

#11, Georgia


Public Corruption: 38
Racketeering & Extortion: 16
Fraud Rank: 12
Forgery & Counterfeiting: 12
Embezzlement: 29

Recent Scandal:
It's not often that a carpet maker gets charged with racketeering, but that's what happened to Mohawk Industries Inc., one of the biggest in the world. The company settled in April for $18 million to resolve allegations from employees they had hired undocumented immigrants to suppress wages. An appeals court decided the company could be charged under the Racketeer Influenced and Corrupt Organizations Act because they had allegedly conspired with employment agencies to hire the undocumented workers. Mohawk did not admit any wrongdoing in the settlement.

Butch Dill / AP Photo

#12, Alabama


Public Corruption: 10
Racketeering & Extortion: 39
Fraud Rank: 6
Forgery & Counterfeiting: 8
Embezzlement: 45

Recent Scandal: Disgraced former Birmingham mayor Larry Langford was found guilty on 60—count 'em—various counts of corruption last October. The charges stem from Langford soliciting and accepting $236,000 in cash, clothes, and jewelry from lobbyist Al LaPierre and businessman Bill Blount. "We all have our trials, this too will pass," Langford said outside the courtroom just after the conviction was announced. Perhaps, in time. Langford was sentenced to 15 years behind bars in March.

#13, Texas


Public Corruption: 27
Racketeering & Extortion: 15
Fraud Rank: 21
Forgery & Counterfeiting: 14
Embezzlement: 31

Recent Scandal:
In February Jibreel A. Rashad of Dallas became one of the final defendants to be convicted in a corruption probe, including a former Mayor Pro Tem and 12 other public officials, that blurred the boundaries of public and private enterprises. Rashad formed a phony construction company in 2004 and partnered with the elected officials to shake down a low-income housing developer, James R. “Bill” Fisher, into accepting contracts from Rashad's unqualified company. When Fisher refused, city bigwigs delayed Fisher's rezoning bid application. Rashad was convicted of conspiracy to commit extortion.

#14, Arkansas


Public Corruption: 26
Racketeering & Extortion: 36
Fraud Rank: 2
Forgery & Counterfeiting: 3
Embezzlement: 43

Recent Scandal: A former North Little Rock alderman is in hot water with the feds, but he may have an out. Investigators have charged that Cary Gaines conspired to have a contractor obtain city contracts which would have provided kickbacks to a reputed member of the mafia to whom Gaines owed money. But the case is in limbo as Gaines claims key evidence was obtained through an illegal wiretap. "All wiretap communications relating to Gaines should be suppressed as fruit of the poisonous tree because they were unlawfully intercepted,” Gaines' lawyer wrote.

#15, Missouri


Public Corruption: 24
Racketeering & Extortion: 25
Fraud Rank: 24
Forgery & Counterfeiting: 6
Embezzlement: 34

Recent Scandal: For such a simple scheme, it's amazing that Denny Ray Hardin of Kansas City got as far as he did. Hardin allegedly used his home computer to concoct bonded promissory notes he said were authorized by the US Department of Treasury. The notes were, Hardin claimed, as good as money. Problem is, there's no such thing as a bonded promissory note, and, as such, they were not authorized by the US Department of Treasury. Hardin doled out $100 million worth of the notes to friends, family, and customers who paid $100 per note. He faces 11 counts of fictitious obligations and 10 counts of mail fraud.

#16, Hawaii


Public Corruption: 19
Racketeering & Extortion: 3
Fraud Rank: 43
Forgery & Counterfeiting: 25
Embezzlement: 23

Recent Scandal: A rash of counterfeit $100 bills went into circulation in the summer of 2007 in Hawaii. The bills had been made by Bloods and Crips in California using copy machines estimated to cost up to $100,000, which then found their way into the Aloha State. All stripe of businesses were found to have the fake bills, "from fast-food places to high-end stores," US Secret Service agent Albert Joaquin told the Honolulu Advertiser. In an apparently unrelated counterfeiting scheme, three people from 'Aiea were charged with using bleach and a printer to transform $1 bills into $100 bills.

#17, South Dakota


Public Corruption: 7
Racketeering & Extortion: 29
Fraud Rank: 13
Forgery & Counterfeiting: 45
Embezzlement: 21

Recent Scandal: Three Sioux Falls farmers were charged in 2008 with defrauding the Farm Service Agency of $381,000 from 2003 to 2005. The men operated only one farm, but created several alternate names to collect extra taxpayer funds. "The payments don't come in those big amounts," Assistant US Attorney Jeffrey C. Clapper told The Daily Republic of Mitchell, South Dakota. "They come in little payments at a time and the indictment just shows a few of those amounts in the wire fraud and money laundering portion of the indictment."

#18, Wisconsin


Public Corruption: 35
Racketeering & Extortion: 33
Fraud Rank: 8
Forgery & Counterfeiting: 15
Embezzlement: 25

Recent Scandal: A former vice president of the publicly traded Koss Corporation was accused in January of defrauding the company of $31 million. Sujata Sachdeva wired money directly from Koss' bank accounts to pay for credit card bills, a 2007 Mercedes Benz, clothing, jewelry, a time-share at a resort and other personal items. “This case is one of the largest embezzlement cases ever brought in this district," US Attorney James L. Santelle said. Sachdeva could get up to 120 years in jail if convicted on all counts.

Jacquelyn Martin / AP Photo

#19, Louisiana


Public Corruption: 4
Racketeering & Extortion: 27
Fraud Rank: 29
Forgery & Counterfeiting: 28
Embezzlement: 28

Recent Scandal: Thirteen years for 11 counts. Former Congressman William J. Jefferson got 13 years in prison in November 2009 for the myriad corruption charges he was convicted of in August 2009. Jefferson used his political muscle to promote telecommunications, oil and other business interests in Nigeria, Ghana and other parts of Africa. In return he netted hundreds of thousands of dollars, stock options, and gifts for family members. Jefferson is 62 and may spend the rest of his life in prison.

#20, Arizona


Public Corruption: 31
Racketeering & Extortion: 24
Fraud Rank: 40
Forgery & Counterfeiting: 4
Embezzlement: 19

Recent Scandal: Banks in Phoenix lost $9 million from 2005 to 2007 to a mortgage fraud scheme perpetrated by a Haitan national. Mario G. Bernadel got 17 years for instructing unqualified applicants to lie and obtain home loans they couldn't repay, submitting his own phony mortgage applications, and engaging in mail, wire, and bank fraud. Seven other people have pled guilty in the scheme. Bernadel will be deported to Haiti after his term is served.

Louis Lanzano / AP Photo

#21, New Jersey


Public Corruption: 11
Racketeering & Extortion: 5
Fraud Rank: 26
Forgery & Counterfeiting: 35
Embezzlement: 41

Recent Scandal: One of the most sweeping corruption cases in New Jersey history starts off like a bad joke. Three mayors, two state assemblymen, three rabbis—and dozens others—were struck last year with a hurricane of charges ranging from bribery to money laundering to shady development deals to trafficking human organs. Several of the politicians were elected based on anti-corruption rhetoric, and long-time leaders of the Syrian Jewish community in Brooklyn and New Jersey were arrested, charged with money laundering. Some of the defendants resigned office—others pled guilty, while others have decided to fight it out in court. In March a once-aspiring politician named La Vern Webb-Washington was sentenced to a year and a day in jail. She had accepted $15,000 in bribes. “This is so massive,” said political scientist Joseph Marbach. “It’s going to just reinforce the stereotype of New Jersey politics and corruption.”

#22, Connecticut


Public Corruption: 23
Racketeering & Extortion: 10
Fraud Rank: 37
Forgery & Counterfeiting: 32
Embezzlement: 18

Recent Scandal: These guys will break your knees without thinking twice. Seriously. Raul Suner and Phillip John Bauco ran an illegal gambling operation using the Internet, but acted like common thugs when they were offline. When a bookie couldn't cover a bet, Suner beat him up with a baseball bat—on another occasion the bookie was terrorized by Suner with a knife, who wiped blood on the bookie's jacket. Suner pled guilty to a racketeering conspiracy charge and could get up to 20 years in prison. Bauco has already copped to one count of racketeering conspiracy.

#23, Maryland


Public Corruption: 22
Racketeering & Extortion: 20
Fraud Rank: 28
Forgery & Counterfeiting: 37
Embezzlement: 15

Recent Scandal: Ten Maryland residents were implicated in a far-reaching, $35 million mortgage, mail and wire fraud scheme that operated from 2004 to 2007. All plead guilty in May 2009. The conspirators in the fraud ran Metropolitan Money Store, which promised to help homeowners who were in too much debt and at risk of losing their homes to foreclosure. But, instead of help, MMS asked the owners to transfer the titles of their homes for a year to third parties—straw buyers the company had concocted. The company used the properties to get additional mortgages and loans, leveraged fees for services they didn't perform and transferred money from escrow accounts into personal accounts.

Mike Groll / AP Photo

#24, New York


Public Corruption: 20
Racketeering & Extortion: 1
Fraud Rank: 30
Forgery & Counterfeiting: 34
Embezzlement: 38

Recent Scandal: $20,000 for sushi? According to New York Attorney General Andrew Cuomo, state senate president majority leader Pedro Espada of the Bronx stole $14 million from his nonprofit Soundview Health Center, which he founded in 1978 to help low-income residents of his borough. The clinic picked up the tab for nearly $10,000 in plane tickets used by Espada, $20,000 worth of sushi, another $20,000 for Espada to attend sporting events and plays, and $100,000 for campaign brochures. "Siphoning money from a charity would be egregious under any circumstances, but the fact that this was orchestrated by the state Senate majority leader makes it especially reprehensible," Cuomo said. Racketeering, and wire and mail fraud charges may soon follow, according to The New York Daily News.

#25, Nebraska


Public Corruption: 50
Racketeering & Extortion: 40
Fraud Rank: 11
Forgery & Counterfeiting: 11
Embezzlement: 12

Recent Scandal:
Two former Nebraska City stockbrokers were charged with securities fraud last summer for selling risky investments in Florida start-up companies American Capital Corporation and Royal Palm without disclosing the risks to investors. In total, they are accused of defrauding more than 130 investors, many of whom were elderly or retired, out of more than $20 million and each face eight counts of securities fraud. Both entered a "not guilty" plea in District Court in April. Their pretrial hearing is scheduled for July 15.

#26, North Dakota


Public Corruption: 3
Racketeering & Extortion: 51
Fraud Rank: 5
Forgery & Counterfeiting: 33
Embezzlement: 35

Recent Scandal: Todd Horob was able to amass $7.8 million in loans from Wells Fargo and Dakota West Credit Union based on collateral of 7,000 head of cattle. In reality, Horob owned 60 cattle. The FBI found he lost more than $2 million in the cattle futures market and spent the rest of the money on "other things." Horob was sentenced to 11 years in prison and ordered to pay $6 million after a jury convicted him of bank, wire and bankruptcy fraud, money laundering, and identity theft.

#27, Rhode Island


Public Corruption: 32
Racketeering & Extortion: 32
Fraud Rank: 14
Forgery & Counterfeiting: 44
Embezzlement: 7

Recent Scandal:
According to the Mortgage Asset Research Institute, Rhode Island bumped Florida for the state with the highest number of mortgage fraud cases in 2008. One schemer was Lisa Torres, who was sentenced to 46 months in federal prison in December for running a $1.7 million mortgage fraud scheme. She admitted to buying nine foreclosed properties in Providence and, with fake names, arranged sham sales with inflated prices to get fraudulent mortgage financing. In total, she made more than $600,000 in the scheme. To get the financing, she had forged W-2 forms, pay stubs and bank account balances of the fake buyers.

#28, Kentucky


Public Corruption: 8
Racketeering & Extortion: 42
Fraud Rank: 20
Forgery & Counterfeiting: 26
Embezzlement: 37

Recent Scandal: Talk about old-time electioneering. Last year five Manchester officials were arrested and charged with using corrupt tactics to obtain political power and personal gain under federal racketeering law. Allegations reached to the top of the county's government, and defendants included Clay County Circuit Court Judge Russell Cletus Maricle, school superintendent Douglas C. Adams, and Clay County Clerk, Freddy Thompson. Maricle and Adams allegedly worked their political muscle to appoint conspirators to the local election board, while Thompson allegedly acted as the bagman, giving election officers money to buy votes. Paul E. Bishop allegedly provided meeting space in his home, where local candidates distributed money to election officers, and taught officers how to flip votes on electronic voting machines.

#29, California


Public Corruption: 37
Racketeering & Extortion: 19
Fraud Rank: 45
Forgery & Counterfeiting: 17
Embezzlement: 16

Recent Scandal:
Earlier this year, San Bernardino County District Supervisor Bill Postmus and aide Jim Erwin were arrested on charges of accepting $100,000 each to induce the Board of Supervisors to pay $102 million in 2006 to settle a dispute with developer Colonies Partners. The state Attorney General called the case the largest bribery and public corruption case the state had ever witnessed. Colonies Partners had a history of large donations to political action committees, including a total of $720,000 in the 2008 election cycle.

#30, Michigan


Public Corruption: 34
Racketeering & Extortion: 21
Fraud Rank: 27
Forgery & Counterfeiting: 47
Embezzlement: 8

Recent Scandal: Cemetery trust funds in Michigan are ripe for the looting, apparently. Last year, Robert Eark Nelms pleaded guilty to two felony counts of embezzling $4.2 million from trust funds in a Grand Rapids cemetery over three years. Nelms was accused of stealing more than $24 million in total from cemeteries and funeral homes in Indiana and Michigan. In 2007, Clayton Smart was accused of embezzling $70 million from Michigan cemeteries and is currently awaiting trial in Tennessee for related charges.

#31, West Virginia


Public Corruption: 17
Racketeering & Extortion: 38
Fraud Rank: 31
Forgery & Counterfeiting: 41
Embezzlement: 24

Recent Scandal: January was a bad month for a father and son duo in West Virginia. Eddie Burl Smith and Edward Michael Smith were sentenced to 57 months and 24 months in prison for their respective roles in several fraud schemes, including tax fraud, health care benefit fraud and bankruptcy fraud. The duo operated pipeline contracting firm Carl E. Smith Inc., claiming $9 million in personal expenses to the business, filing false tax returns, issuing bogus expense checks to employees, and destroying corporate records to obstruct the IRS' and Department of Labor's investigation. Edward also pleaded guilty to health care benefit fraud for his role in establishing a health care benefit program for employees, but failed to pay premiums, forcing workers' claims to remain unpaid.

#32, Ohio


Public Corruption: 13
Racketeering & Extortion: 8
Fraud Rank: 42
Forgery & Counterfeiting: 42
Embezzlement: 46

Recent Scandal:
Eleven people were indicted and pleaded guilty for their roles in a Buckeye State marriage fraud scheme earlier this year. Five of the eleven people were in the States illegally. According to U.S. Immigration and Customs Enforcement, Dimitry Pani and a co-conspirator were essentially operating a business of finding U.S. citizens who were willing to accept money to marry aliens, as well as making false statements to immigration authorities so the arranged marriages would get approved. Pani and the other ten involved in the scheme are currently awaiting sentencing.

#33, Utah


Public Corruption: 45
Racketeering & Extortion: 13
Fraud Rank: 39
Forgery & Counterfeiting: 9
Embezzlement: 47

Recent Scandal: The Salt Lake city region was plagued by gang violence and crime as members of the "Tiny Oriental Posse" committed violent crimes in the area for more than a decade before police were able to nab them on charges of racketeering beginning in 2006. A dozen members of the gang were indicted in 2007 and prosecutors said they were guilty of assault, robbery, drug trafficking and murder. Two brothers in the gang were sentenced to several years in prison in 2008 for racketeering after admitting to various violent crimes they committed for the TOP.

#34, Minnesota


Public Corruption: 47
Racketeering & Extortion: 31
Fraud Rank: 15
Forgery & Counterfeiting: 13
Embezzlement: 49

Recent Scandal: In February after a three week trial, a mother and son in Minneapolis were found guilty of bilking Minnesota of $2.1 million in a complicated scheme involving underprivileged kids, a fake tutoring program and the state's education tax credit. Carolyn Louper-Morris and her son William Morris created CyberStudy 101 under the purview of an internet-based tutoring program for kids K-12, which was free for families that qualified for the state's education tax credit initiative if they agreed to let the company file tax returns on their behalf. The company then stole tax refunds from its customers. A federal jury found Louper-Morris and Morris guilty of wire fraud and mail fraud.

#35, Oregon


Public Corruption: 51
Racketeering & Extortion: 28
Fraud Rank: 38
Forgery & Counterfeiting: 2
Embezzlement: 36

Recent Scandal: The IRS and FBI along with several regional law enforcement agencies uncovered a sophisticated identity theft and bank fraud ring in 2009. Six people garnered thousands of dollars in goods and stolen identities by burglarizing buildings-mostly offices of lawyers, doctors and dentists-in Portland, as well as Phoenix, Beverly Hills and Dallas, to steal personal information and bank documents, then used the data to take out credit cards and cash fraudulent checks for as much as $50,000. One woman involved in the ring, Carol Crane, pleaded guilty to bank fraud in 2006, but continued to commit identity theft and bank fraud through early 2007. She was sentenced to 124 months in prison and ordered to pay $200,000 in restitution to victims in February.

AP Photo

#36, District of Columbia


Public Corruption: 1
Racketeering & Extortion: 2
Fraud Rank: 51
Forgery & Counterfeiting: 51
Embezzlement: 50

Recent Scandal: The largest case of tax fraud in D.C. government history came to a close when Harriette Monica Walters pleaded guilty in September 2008 to wire fraud and tax evasion and agreed to a plea agreement that stipulated 15 to 18 years in prison and a $48.1 million restitution payment. Walters, a manager in the Office of Tax and Revenue, stole from the city of D.C. since 1989 by issuing fraudulent property-tax vouchers, getting them fast-tracked through approval and then giving the checks to a web of friends and family—including her banker and personal shopper—to cash or deposit. Walters didn't try to hide her wealth; she spent nearly $1.5 million at Neiman Marcus from 200 to 2008 and agents seized fur coats, designer bags and a Bentley during the investigation. "An enduring tragedy of this case is that the defendant stole $48 million to lead a life of conspicuous consumption while our city and its most vulnerable populations were in such great need," said Jeffrey A. Taylor, the U.S. Attorney for the District of Columbia.

#37, Idaho


Public Corruption: 29
Racketeering & Extortion: 51
Fraud Rank: 35
Forgery & Counterfeiting: 30
Embezzlement: 11

Recent Scandal:
Bernie Madoff may trump all other Ponzi schemers, but Idaho Falls has its own local star in the business. Daren Palmer was accused by the SEC last February of operating a $40 million Ponzi scheme and defrauding at least 55 investors. Palmer and his investment company Trigon accepted money from investors from 1996 to 2008 on the promise of 20% annual returns. Palmer allegedly used the money to build a $12 million home, to buy snowmobiles and earn $25,000 a month. He was not licensed to sell securities and was not registered with the SEC.

#38, Washington


Public Corruption: 43
Racketeering & Extortion: 23
Fraud Rank: 48
Forgery & Counterfeiting: 10
Embezzlement: 32

Recent Scandal:
Transporting more than a dozen pounds of marijuana via FedEx is not the best way to avoid getting caught. A District Court in Seattle sentenced drug ring leader Mario Earl in January to 102 months in prison and ordered him to pay $30,000 in restitution for conspiracy to distribute marijuana and bank fraud after Drug Enforcement Agency investigators discovered large amounts of dope moving from Seattle to Phoenix and Arizona. The drug traffickers used stolen identities from debit and credit cards, as well as shipping 20 pound boxes of pot laced with fabric softener to mask the smell.

#39, Vermont


Public Corruption: 30
Racketeering & Extortion: 51
Fraud Rank: 23
Forgery & Counterfeiting: 38
Embezzlement: 17

Recent Scandal: As the real estate market was starting to crack in the fall of 2008, a Vermont couple was indicted on charges of scamming mortgage lenders out of $26 million. Benjamin Osmanson and Jillian Protzman ran a bed and breakfast in Highgate, VT, but had a hobby of buying houses they couldn't afford. Between January 2006 and April 2007 they snapped up at least 50 houses in four states, paying for them with loans in the names of family and friends. They pocketed $1.26 million in finder's fees and left the mortgages unpaid. The couple was indicted on 11 counts, including conspiracy to commit wire fraud and money laundering. Osmanson was sentenced to nine years in prison in January and ordered to cough up $12 million in restitution. Protzman, who surrendered to the FBI a week after Osmanson was arrested in 2008, was sentenced to six months in jail and ordered to pay 30% of the $12 million.

#40, Colorado


Public Corruption: 44
Racketeering & Extortion: 34
Fraud Rank: 34
Forgery & Counterfeiting: 22
Embezzlement: 26

Recent Scandal: Last year in Colorado, once named among the top ten states for mortgage fraud by the FBI, a multimillion-dollar mortgage fraud scheme was prosecuted after a two-year undercover investigation. The Colorado Attorney General called the operation "one of the most expansive and heinous mortgage fraud rings we've seen in Colorado." The mastermind of the scheme, Uto Essien, was convicted of two felony counts of forgery and one count of theft for using "false invoices and shell corporations" to get $10.9 million in mortgages in 34 real estate deals over three years. He was sentenced to 30 years in prison and will be deported to Nigeria once his sentence is served.

#41, Maine


Public Corruption: 33
Racketeering & Extortion: 51
Fraud Rank: 19
Forgery & Counterfeiting: 29
Embezzlement: 30

Recent Scandal: Last spring, two people were convicted of workers compensation fraud in the span of two weeks. Kenneth Villella was sentenced to eight months in jail for stealing $16,000 in benefits for four months in 2006 by working under the table for several hotels and simultaneously collecting workers' compensation. Landon Logsdon was sentenced to six months for a similar offense. Hours after he claimed to have incurred a back injury at one job, he reported for physically demanding work with another company. Over the course of two years, he collected $18,000 in lost wage benefits.

Mark Wilson / Getty Images

#42, Alaska


Public Corruption: 2
Racketeering & Extortion: 51
Fraud Rank: 44
Forgery & Counterfeiting: 39
Embezzlement: 33

Recent Scandal: Until last year, Ted Stevens was an honored figure in Alaskan and American politics. He was Alaska's senator since 1968 and the longest-serving Republican senator in history. But in 2008, he was indicted on seven counts of lying on his Senate financial disclosure forms. A week before the November election, he was found guilty on all seven counts and lost re-election by a 1.24% margin. His alleged corruption was trumped by the prosecutors in his case, however, as a federal judge appointed independent counsel to look into misconduct by the government lawyers who prosecuted the Senator, set aside Stevens' guilty verdict and voided his indictment. "In nearly 25 years on the bench, I've never seen anything approaching the mishandling and misconduct that I've seen in this case," said the District Justice.

#43, Iowa


Public Corruption: 48
Racketeering & Extortion: 51
Fraud Rank: 33
Forgery & Counterfeiting: 24
Embezzlement: 20

Recent Scandal:
In March of last year, an Iowa City woman was charged with eight counts of forgery and second-degree theft. Angela Seydel stole a checkbook from her ex and wrote eight checks to herself totaling $4,100. Months later, another forgery case hit the courts in Iowa. Jason Pohlmeyer, 23, was found guilty of forgery and sentenced to five years in prison for cashing four $1,000 checks from John's Janitorial Service—his father's business that had been closed for nearly 15 years.

Getty Images

#44, Kansas


Public Corruption: 46
Racketeering & Extortion: 35
Fraud Rank: 32
Forgery & Counterfeiting: 43
Embezzlement: 22

Recent Scandal: Kansas City was the base for a large human trafficking ring in which hundreds of foreign workers were brought into the U.S. to work and forced to live in cramped conditions. Three employment firms contracted the workers out to hotels and casinos in 14 states and paid them only a fraction of their wages while charging them thousands in fees. Twelve employees of the three companies were indicted last year and accused with racketeering, visa fraud, and identity theft. “The indictment alleges that this criminal enterprise lured victims to the United States under the guise of legitimate jobs and a better life, only to treat them as modern-day slaves under the threat of deportation,” said James Gibbons, acting special agent in charge of U.S. Immigration and Customs Enforcement.

Laura Husar / AP Photo

#45, New Mexico


Public Corruption: 41
Racketeering & Extortion: 41
Fraud Rank: 47
Forgery & Counterfeiting: 40
Embezzlement: 10

Recent Scandal: New Mexico has a long history of public corruption (see: New Mexico state treasurers), and one of the more interesting characters to arise from its history is Manny Aragon. Aragon was a senator for the state for 29 years, but his legacy was marred in 2008 when he pleaded guilty to three counts of conspiracy and mail fraud related to a plan to steal $4.4 million from the state during the construction of the Albuquerque metro courthouse. He was sentenced to more than five years in prison and ordered to pay a $750,000 fine and $649,000 in restitution.

Winslow Townson / AP Photo

#46, Massachusetts


Public Corruption: 25
Racketeering & Extortion: 12
Fraud Rank: 50
Forgery & Counterfeiting: 49
Embezzlement: 44

Recent Scandal: Former Senator Dianne Wilkerson resigned from her position in 2008 following her arrest on charges of public corruption. The FBI, during an 18-month investigation to Wilkerson, caught her on tape accepting bribes from undercover agents, collecting $23,500 between June 2007 and October 2008. In an interview with the Boston Globe, she copped to accepting at least $70,000 from friends and political supporters over the last decade, which she used to pay off her mortgage and federal tax debt, but claimed that she never accepted money for any act as a Senator.

Scott Olson / Getty Images

#47, Illinois


Public Corruption: 16
Racketeering & Extortion: 18
Fraud Rank: 46
Forgery & Counterfeiting: 50
Embezzlement: 51

Recent Scandal: It's difficult to think of Illinois and fraud without political corruption coming to mind. The state's history is steeped with dirty governors and mobsters, with the most recent example being mop-topped Rod Blagojevich. Blago is the seventh governor of the state to be arrested or indicted since Governor Joel Aldrich Matteson tried to cash in $200,000 of stolen government scrip in the 1850s. Blago was arrested in December of 2008 on charges of federal corruption for conspiring to sell the appointment to the U.S. Senate to "the highest bidder." The Illinois State Senate voted unanimously to remove him from office and prohibit him from ever holding office in the state again. His federal trial is scheduled for June.

#48, Wyoming


Public Corruption: 28
Racketeering & Extortion: 51
Fraud Rank: 36
Forgery & Counterfeiting: 31
Embezzlement: 40

Recent Scandal: Last month, a federal grand jury in Casper, Wyoming found Randy Lee guilty of 11 counts of felony and sentenced him to 37 months of prison. His crime? Odometer tampering fraud. He was convicted of conspiracy, odometer tampering, and securities fraud. Lee bought used cars, rolled back the odometers—often more than 100,000 miles—and resold the vehicles with fraudulent titles. "This type of scheme defrauds consumers out of one of the biggest investments they will ever make. Dishonest dealers who roll back odometers cheat customers out of their hard-earned money," Tony West, Assistant Attorney General for the Civil Division of the Department of Justice, said at the time. 

#49, Indiana


Public Corruption: 40
Racketeering & Extortion: 30
Fraud Rank: 41
Forgery & Counterfeiting: 36
Embezzlement: 48

Recent Scandal: Fraud rocked a small town in Indiana in 2008. Margaret Anne Jansen, the 79-year-old, longtime clerk-treasurer of Rocky Ripple, Indiana (pop. 700) was investigated on suspicion of embezzling $36,000—nearly one quarter of the small town's operating budget—over a year and a half. “The more you trust a person, the greater the impact of betrayal,” said Danny Orr, a cellular phone technician and friend of Jansen’s. “There’s a whole lot of people re-examining their trusts.”

#50, Montana


Public Corruption: 6
Racketeering & Extortion: 51
Fraud Rank: 49
Forgery & Counterfeiting: 48
Embezzlement: 42

Recent Scandal: After 3 years of embezzlement, during which she took a total of $60,629, Christine Todd of Madison County, Montana was sentenced to 10 years of probation and a deferred sentence last year. Not a bad punishment for Todd, who was a bookkeeper for three family businesses and used her access to steal money and open lines of credit in the name of the family for which she worked. "These people were friends and they just feel betrayed," said an attorney for Madison County, Montana.

#51, New Hampshire


Public Corruption: 49
Racketeering & Extortion: 37
Fraud Rank: 25
Forgery & Counterfeiting: 46
Embezzlement: 39

Recent Scandal: In early April this year, the state's District Attorney's office announced that two New Hampshire men were charged with mail fraud and wire fraud after allegedly bilking private lenders of $33 million since 1989. The men, Scott Farah and Donald Dodge are scheduled to stand trial in June.