Business Blunders Hall of Shame
From magnate to inmate: These are the nation's most notable white-collar convicts
A lot of kids learn their first business lessons playing Monopoly.
They throw dice, slide game pieces and buy properties. They pay rent, fees, fines and taxes as they go. Inevitably, they draw a bad card:
This may not seem right to a child. They may know business people from their schools, neighborhoods and places of worship. They may know that business people create jobs, fund charities and support communities. Who would put them in jail?
But the Monopoly game, which dates back to 1902, isn’t cynical. Every business is a potential honeypot for criminals. And business leaders who may once have been respected as pillars of their communities can indeed end up in handcuffs and orange jumpsuits.
Welcome to the Business Blunders Hall of Shame
White-collar felons offer cautionary tales for investors, lenders, customers, employees and other stake holders. They provide object lessons for anyone tempted to cut corners too sharply. And they stand as nauseating examples of just how crooked our economic system can be without adequate controls.
Some of these names you’ll remember, some you may have long forgotten, some you may have never heard about. Have a laugh or a cringe at the follies.
For these folks, there was never any “Get Out of Jail Free” card.
Accepting nominations
The Business Blunders Hall of Shame considers white-collar offenders large and small, famous and obscure, past and present. It is an ongoing effort with new inductees added sporadically, so check back for updates.
Paid subscribers can leave nominations in the comments section:
To qualify, past and present inductees must have:
Been convicted of a felony.
Displayed astonishing greed, stupidity, recklessness, hypocrisy or abhorrent behavior.
Left a trail of tears.
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Inductees
Welcome to the Business Blunders Hall of Shame. Here’s a list of who has been included so far. Paid subscribers can skip to an inductee by name using these links below, or keep scrolling to tour the entire ignominious assembly.
Eddie Antar – Crazy Eddie
Eddie Antar grew a single electronics store in Brooklyn into one of the most memorable stock frauds of the late 1980s.
Renowned for its late-night TV commercials touting “in-saaane” prices, “Crazy Eddie” began began as a family-run skimming operation. It stole sales tax money, manipulated inventories, filed false insurance claims and paid employees off the books.
Thriving on ill-gotten gains, it expanded to more than 40 stores in four states with reported annual sales of more than $300 million (or so they say).
Antar shipped millions in skimmed loot to banks in Israel. But he eventually realized he could make more money by selling stock to the public. To accomplish this, he needed to cook the books, and he put his accountant cousin, Sam Antar, in the kitchen.
“I was trained to be a criminal since I was 14 years old,” Sam Antar said in an interview. “I went to college for the purpose of being a better criminal. My cousin Eddie paid for my education. I did it. I loved it.”
Why?
“Money, greed, power, stature, family loyalty and just for the fun of doing it,” said Sam Antar, who offers an insider’s description of the fraud on his website.
In the years before its initial public stock offering, Crazy Eddie slowly reduced its skimming operations, making it appear to future shareholders that profits were exploding. After its IPO launched in 1984, its stock soared from $8 to $72. Months later, the company imploded under the weight of its Byzantine accounting frauds.
It was liquidated following a 1989 bankruptcy filing.
Eddie Antar took off for Israel and dodged justice for years, but he finally received an eight-year prison sentence in 1997. He was released in 1999 and died in 2016 at the age of 68.
Sam Antar avoided a prison sentence by cooperating with prosecutors, but he once said he has never found redemption.
“There is no redemption,” he said. “Redemption is for you, the noncriminal, who believes that human beings are capable of wonderful things.”
Sam Bankman-Fried – FTX
Silicon Valley and Madison Avenue leaders propped up Sam Bankman-Fried as a wunderkind, but the FTX founder’s genius eventually manifested as an out-of-control crypo-klepto.
In March 2024, Bankman-Fried received a 25-year prison sentence and a court order to forfeit $11 billion following his conviction on seven counts of fraud, conspiracy and money laundering.
Investors who thought they were buying bitcoin through the FTX currency exchange were merely funding whatever Bankman-Fried decided to do with the money as he wantonly misappropriated it.
The fuzzy-headed fraudster illegally stuffed billions of dollars of FTX customer funds into his venture capital firm, Alameda Research, run by his girlfriend Caroline Ellison.
He took private jets to his lair in the Bahamas and put the FTX logo everywhere from a Miami basketball arena to a Formula 1 race car. He ran a memorable Super Bowl commercial staring comedian Larry David, courted many other celebrity endorsements, made huge donations to Democrats, and even bragged that he might one day buy Goldman Sachs.
Both his parents are Stanford law professors, he had access to millions of dollars worth of lawyers, and none could save him.
Bankman-Fried was briefly lauded as “the next Warren Buffet,” and he achieved a net worth of about $26 billion – at least on a computer screen. Now he’s in the pokey eating beans and rice.
Bankman-Fried apparently counted the truth as just another start-up expense to be culled.
“Lack of trust is an enormous transaction cost,” Bankman-Fried said in an August 2022 Forbes story before his life came crashing down. “I underestimated this when I first got into business.”
Jordan Belfort – Stratton Oakmont
Convicted penny stock swindler Jordan Belfort received a glamorous makeover when Leonardo DiCaprio portrayed him in “The Wolf of Wall Street.”
His firm wasn’t located anywhere near Wall Street. It was a sleazy boiler room operating out of Long Island, N.Y. And its fraudulent activities had nothing to do with the broader market, which of course has its own problems.
“He was nothing more than a thief who found a way to steal from anyone who trusted him and to blame it on the stock market,” said Ronald L. Rubin, a former enforcement attorney for the Securities and Exchange Commission in a Wall Street Journal opinion piece.
Belfort pleaded guilty to securities fraud, money laundering and stock manipulation charges. His firm, Stratton Oakmont, issued stocks based on dubious businesses and used high-pressure sales tactics to foist them on an unsuspecting public.
The profits fueled all the sex, drugs and insanity portrayed in the film.
Belfort was sentenced to four years in prison, but he cut a deal with prosecutors to rat out his underlings and only served 22 months.
He had the good fortune of sharing a cell with comedian Tommy Chong, who was serving time for selling bongs. Chong inspired Belfort to write a book, and the rest is Hollywood history.
Belfort has since made a fortune as an author, speaker and corporate trainer, capitalizing off the crimes he committed against thousands of small investors. All the while, he’s reportedly not paid anywhere near the $110 million in court-ordered restitution he owes.
“I once asked Jordan if it bothered him that he was stealing old ladies’ life savings,” Rubin writes. “Without missing a beat, he replied: ‘Of course. Why do you think we took all of those drugs?’”
Meyer Blinder – Blinder & Robinson
Meyer Blinder ran a stock brokerage that once ranked 10th in the nation by number of brokers. It boasted 66 offices in 37 states.
Blinder was renowned as the “penny stock king” as his Denver-based Blinder, Robinson & Co. pumped and dumped stocks. It sold public offerings in tiny companies and “blind pools” that often contained no real assets. Forbes magazine dubbed the firm,“Blind ‘em and Rob ‘em,” in 1987.
He was once Colorado’s highest-paid executive with a $9.5 million annual salary but his firm eventually filed bankruptcy. In July 1992, Blinder was convicted of racketeering, securities and wire fraud. He served 40 months in prison and was released at age 74 in 1995.
He was a colorful character until the very end. He once fell over during a deposition, clutching his heart and gasping for air.
“Make him answer the question,” a relentless prosecutor demanded, unimpressed with what he saw as theatrics from a crafty old man.
Blinder continued writhing on the floor, eventually getting medical attention. A reporter later asked Blinder if he needed a new heart.
“No,” replied, pointing to the prosecutor. “But if I did, I’d want his heart. He’s never used it.”
Regulators had been after Blinder for years but his hired guns kept the law at bay as he amassed a $100 million fortune.
He snubbed regulators and brazenly insisted his firm legitimately generated capital for small businesses and investment opportunities for average investors. It didn’t matter if most deals failed. Or that most of his investors lost money. That, claimed Blinder, was capitalism.
Buy a stock for a penny, ride it up to a dime or a quarter. The stock went up when Blinder put his cold-calling hucksters on the phone. When leads ran dry, the stock would plummet.
“A dollar is a blue-chip stock in my shop,” he once boasted in a room full of securities regulators.
Blinder grew up poor in New York City. His father’s death forced him out of high school. But he learned to hustle. He was charismatic and funny, grandfatherly one minute and bloodthirsty the next. After a jury convicted him, he lunged across the courtroom at federal prosecutor Howard Zlotnick.
“Zlotnick! I’ll kill him,” he cried.
Blinder’s former compliance officer testified that he had heard Blinder threaten to kill his opponents “500 times,” though few took the old man seriously.
Blinder emerged from prison in 1995, tossing his cane and shouting, “I’m free. I’m free,” on the jailhouse steps.
In 1997, he produced a video called, “The Fight to Expose,” which he distributed to the media and members of Congress. It was 60 minutes of denial and misery about his treatment in prison. He claimed there was a government conspiracy to shut him down.
“I didn’t do anything that Merrill Lynch doesn’t do,” Blinder once said in an interview. “I just did it on a smaller scale.”
It sounded delusional. Then in December 2002, Merrill Lynch and most other major U.S. investment houses paid $1.4 billion to settle civil fraud charges. Well-educated Wall Street analysts had been hyping stocks, too, with myriad layers of added sophistication, but their moves still resembled the old pump-and-dump schemes that Blinder had championed.
By 2002, though, Blinder was fading away in a nursing home in Arizona. There was no time left for, I-told-you-sos. He died at age 82.
Ivan Boesky – Wall Street trader
Insider trading was seldom enforced until prosecutors targeted Ivan Boesky, who had already burnished his legacy as an icon of 1980s Wall Street greed.
It was Boesky who inspired the fictional Gordon Gekko’s most memorable line – “Greed is Good” – in the 1987 film, “Wall Street.”
Boeskey made a fortune illegally trading stock tips, usually about corporate takeover targets, in exchange for suitcases full of cash.
"I think greed is healthy,” Boesky said in May 1986 during a commencement speech at the Haas School of Business at the University of California, Berkeley. “You can be greedy and still feel good about yourself.”
That year, he cut a plea deal and turned government informant against another prosecutorial target of the era, Junk Bond King Michael Milken.
Boesky wore a wire and captured incriminating evidence from Milken, who had been his closest ally. His cooperation spelled the end for investment bank Drexel Burnham Lambert and sent Milken to prison.
Boesky was fined a record $100 million and served nearly three years in prison.
Boesky capitalized on a junk bond-enabled corporate takeover wave that often destroyed companies and cost workers their jobs.
His greed was insatiable and often on full display.
He once upstaged real estate developer Gerald Guterman, who paid nearly $1 million to rent out the Queen Elizabeth 2 for his son’s bar mitzvah. Boesky arrived in a helicopter, landing on the ship, then jumping out in a tuxedo and black tie like he was James Bond.
By his own admission, he was obsessed with wealth and a flashy, opulent life. He was once quoted in The Wall Street Journal: “It’s a sickness I have in the face of which I am helpless.”
Robert Brennan – First Jersey Securities
As Robert E. Brennen declares with the title of his 2023 memoir, “The Record Stands.”
The octogenarian ex-con was once a high-flying penny-stock huckster, who lured unsuspecting investors with flashy TV commercials and connections to the nation’s elite, including President Ronald Reagan.
Brennan, a Seaton Hall University graduate, founded First Jersey Securities in 1974 with main offices in New York City and Red Bank, N.J. By the mid-1980s, it grew to about 36 branch offices nationwide. At its zenith, it boasted perhaps 2,000 employees and more than 500,000 accounts.
Many of First Jersey’s customers were seniors who lost their investments when the worthless stocks they were pressured into buying inevitably crashed.
By 1987, First Jersey filed bankruptcy. In 1994, Brennan lost a civil fraud lawsuit to the Securities and Exchange Commission and was ordered to pay $75 million to settle the claims. But only a portion of the ordered disgorgements and fines have been collected.
Instead, Brennan filed personal bankruptcy in 1995. And he was soon charged with hiding millions of assets from his creditors using offshore accounts, municipal bonds that he stashed in his basement and casino chips from Mirage Resorts in Las Vegas.
In 2001, he was sentenced to more than 9 years for money laundering and bankruptcy fraud. But oh what a run he had for a guy who started out in the boring profession of accounting.
Brennan invested much of his loot in horse racing. He founded publicly traded International Thoroughbred Breeders and financed the reconstruction of the fire-damaged Garden State Park race track in Cherry Hill, N.J. He also owned and raced Thoroughbreds under the prescient name, Due Process Stable.
Brennan hosted Reagan and President George H.W. Bush at charity events and golf outings. He mingled with many other political and business heavyweights, as well as NFL Hall of Fame coach Bill Parcells and College Basketball great Mike Krzyzewski.
Celebrity photos helped him craft the persona of a financial wizard with friends in high places. In a recent interview (attached below), he even touts a photo of himself with Pope John Paul II.
In 2001, Forbes magazine called him, “a swindler of a recognizable type: totally unscrupulous, with the nerve and audacity of a second-story man, but also with a touch of class that has always given him friends in high places.”
Brennan once ran commercials in which he flew a helicopter over the New York City skyline, patriotically promising opportunities and inviting viewers to “Come Grow With Us.”
He has lived a quieter life since his release from prison in 2011, though he’s worked hard to recast his life story.
He tells his tale without a hint of remorse in a January 2024 YouTube video, boasting of his many years of success followed by “a 10-year holiday in federal prison.”
His revisionist storytelling is an inspiration for white-collar criminals everywhere.
Wade Cook – Wade Cook Financial Corp
Wade Cook was a financial guru who was far more gifted at self-promotion and filing bankruptcy than teaching people how to make money.
He self-published his first get-rich-quick book, “Real Estate Money Machine,” while working as a taxi driver in 1981. By 1987, he filed personal bankruptcy.
This could have been the end, but Cook updated his book in 1996 and kept right on cooking.
You might be asking, “Who wants to hear get-rich-quick lessons from a bankrupt taxi driver?”
That’s where the wonders of marketing come into play. Cook knew how to round up suckers through aggressive media campaigns and paid radio programs. He lectured at hundreds of seminars. He authored numerous books, including “Wall Street Money Machine,” “Wealth 101,” “Brilliant Deductions” and “Business Buy the Bible.”
He frequently made religious references in his rants and writings and presented himself as an upstanding member of the Church of Jesus Christ of Latter-day Saints. Yeah, in addition to being a Wall Street Wizard, he was veritable theologian and a real ethicist.
His company, Wade Cook Financial Corp., was charging up to $5,695 for seminars, claiming participants would make potential monthly returns of 20% on their investments. This gross exaggeration put him at odds with the Federal Trade Commission in 2000, but a settlement with the regulator didn’t stop Cook.
At its peak, his company employed 550 people and generated annual revenues of $118 million. But in 2002, it filed for Chapter 11 bankruptcy and ultimately liquidated.
In December 2005, Cook and his wife, Laura, were indicted for evading federal income tax on $9.5 million in royalties from 1998 to 2000, filing false tax returns, and obstructing investigations by creating fictitious documents.
In August 2007, Cook was sentenced to 88 months in prison and ordered to pay $3.75 million in restitution. Laura Cook received an 18-month sentence.
After his release from prison, Cook continued promoting his financial teachings through books and online platforms, despite his complete loss of credibility. In the end, there was only one thing that could stop his incessant money-machine malarkey. He died of cancer in 2021.
Bernie Ebbers – Worldcom
Bernie Ebbers co-founded WorldCom and grew it wildly through takeover sprees until it collapsed in 2002 under the weight of its massive debts.
The company’s biggest deal was acquiring MCI Communication in 1998, but in 2000, regulators objected to its plans to buy Sprint Corp.
The merger game was over, and with it, the creative merger accounting that helped WorldCom cook its books. WorldCom was the second-largest long-distance phone company behind AT&T when it filed bankruptcy in 2002.
When Ebbers wasn’t lording over an $11 billion accounting fraud – at the time one of the largest in U.S. history – he taught Sunday-school at Easthaven Baptist Church in Brookhaven, Miss.
“No one will find me to have knowingly committed fraud,” he promised fellow church members, who then gave him a standing ovation.
As a proud Christian, he often opened corporate meetings in prayer. He apparently didn’t pray too hard for forgiveness.
During his trial, Ebbers put forth an “I don’t know … I don’t recall … I don’t remember” defense, blaming subordinates for the company’s audacious accounting stunts.
He was sentenced to 25 years in prison after convictions on fraud and conspiracy charges.
He’d been known as the “Telecom Cowboy” for his preferred attire of boots and jeans. He liked to drive a tractor on his farm, but when it was time to report to prison, he drove his Mercedes.
Ebbers served 13 years of his time, released early because of his declining health. He died a month later in February 2022.
Ted Farnsworth – MoviePass
Ted Farnsworth was the brains behind a doomed subscription service called MoviePass – one of the most daring “fake-it-’til-you-make-it schemes” ever attempted in the Internet age.
The MoviePass deal, launched in 2017, was a bargain for moviegoers. For less than $10 a month, they got a ticket to see a movie a day. The service grew to 3 million subscribers, but even a third-grade math student could see that it made zero economic sense.
Farnsworth ran MoviePass’s publicly traded parent company, Helios & Matheson Analytics. Former Netflix and Redbox executive Mitchell Lowe served as MoviePass’ CEO.
They may have hoped they could eventually monetize their growing subscriber base. They touted a plan to leverage their massive subscriber data base, but it was never quite clear how they would do this.
They also must have hoped their idiotic 2018 gangster biopic, Gotti, would have turned a dime. But in the meantime, they told a lot of lies.
“Farnsworth … repeatedly lied to the public to artificially inflate these companies’ stock prices, defraud investors, and enrich himself and his co-conspirators,” said Principal Deputy Assistant Attorney General Brent S. Wible in a news release. “He concealed that MoviePass’ subscription model was a money-losing gimmick.”
Farnsworth pleaded guilty to defrauding investors, and he has been locked up since his bond was revoked in August 2023. While out on bond, he allegedly used company funds to pay for male prostitutes.
Lowe has also pleaded guilty.
MoviePass filed bankruptcy in 2020 after racking up hundreds of millions of dollars in losses for its investors. But the debacle made for a great film on HBO last year called MoviePass/Movie Crash.
Well, that’s one way to make a movie.
Rajat Gupta – Goldman Sachs
Former Goldman Sachs Group Inc. director Rajat Gupta received a two-year prison sentence and a $5 million fine in 2012 for securities fraud.
He was convicted of feeding confidential information to Raj Rajaratnam, a former hedge fund manager sentenced to 11 years in prison for running one of the biggest insider-trading rings ever exposed.
It was never shown Gupta directly profited from these trades, but it was shown that he had a long-running business relationship with Rajaratnam.
This is not how one is supposed to handle confidential information at Gupta’s level.
Gupta once ran McKinsey & Co., one of the world’s largest consulting firms, with tentacles in many of the world’s largest companies, including Enron. He was a managing director there as the energy giant imploded in one of the world’s most infamous corporate meltdowns.
Gupta also sat on the board of Procter & Gamble Co. and American Airlines.
He got off easy on the insider trading charges considering that prosecutors had asked for more than 10 years. But he had a lot of fans.
Before Gupta’s sentencing, the judge received hundreds of letters attesting that Gupta was a great friend, a loving husband, an attentive father and a passionate humanitarian.
“No leader of the private sector or corporate world has invested so much of his time, energy and personal credit to do so much for the poorest people of the poorest countries than Rajat Gupta,” wrote Barry Bloom, professor at the Harvard School of Public Health.
These letters clearly played into his light prison sentence.
“The Court can say without exaggeration that it has never encountered a defendant whose prior history suggests such an extraordinary devotion, not only to humanity writ large, but also to individual human beings in their times of need,” Judge Rakoff wrote in sentencing Gupta.
Humanitarianism aside, prosecutors said Gupta’s crime was as damaging to Wall Street as just about any other exposed in the aftermath of the financial collapse of 2008.
“It understandably fuels cynicism among the investing public that Wall Street is rigged and that Wall Street professionals unfairly exploit privileged access to information,” prosecutors wrote in a sentencing memorandum. “This is particularly troubling at a time when there is widespread concern about corruption, greed, and recklessness at the highest levels of the financial services industry.”
The fact is, good people do bad things. Bad people do good things. And the issue before any court should be whether they did it.
In 2019, Gupta wrote a book to tell his side of the story and insist on his innocence, Mind Without Fear. It could have alternatively been called Mind Without Contrition.
“This is the most unusual case in insider trading history,” he said in an interview after the book’s release. “There is no benefit, no establishment of criminal intent. They made up a case, and they succeeded.”
Leona Helmsely – Helmsely hotels
New York hotel and real estate magnate Leona Helmsley was renowned as the “Queen of Mean” for her tyrannical treatment of her employees – which made her prosecution on tax evasion all the more delightful.
In 1989, she was convicted on tax evasion, conspiracy and mail fraud charges. Her housekeeper famously testified that Helmsley had said, “Only the little people pay taxes.’” She was prosecuted by none other than Rudy Giuliani, who is now apparently broke after losing a defamation case, but he was then a respected U.S. attorney.
Appropriately, Helmsley’s prison sentence began on tax day, April 15, 1992. She served 21 months and then retreated to a life of isolation with her dog, Trouble, a Maltese.
When her husband Harry died in 1997, she inherited his $5 billion empire, which included the Helmsley hotels, the Helmsley Palace and the Empire State Building.
A 1990 TV movie, “Leona Helmsley: The Queen of Mean,” dramatized the story of her life.
She once stiffed a contractor out of $13,000. When she was informed that the contractor had six children to support, she replied, “Why didn’t he keep his pants on? Then he wouldn’t need the money.”
Celebrity criminal defense attorney Alan Dershowitz called Helmsely “boring and rather stupid.” He told the New York Post she once had a fit right in front of him over a tiny splash of tea on a saucer at her hotel. She slammed the dishes on the floor. “Now clean it up and beg for your job,” she said to the waiter.
Helmsley died with few friends and was reportedly estranged from her grandchildren. She left her dog a $12 million trust fund, though it was later reduced to $2 million, still making Trouble one of the richest dogs in history.
“I’m a very firm believer that a liar is a cheat and a thief and a crook,” she said in a 1990 interview with Playboy. “I don’t like liars. I never lie. I always told my own child, ‘If you murder somebody, tell me. I’ll help you hide the body. But don’t you lie to me.’”
Elizabeth Holmes – Theranos
Theranos founder Elizabeth Holmes was a lauded Silicon Valley medical entrepreneur yet all she left in her wake was a bloody mess.
She was convicted in January 2022 for defrauding her investors out of more than $100 million, and she is not scheduled to be released from federal prison until March 2032 after losing her appeal in February 2025.
Her former boyfriend and top lieutenant, Ramesh Balwani, received a 13-year prison sentence for the scheme. They’ve both been ordered to pay $452 million in restitution.
Holmes claimed Theranos was developing a blood testing device that could detect a wide range of illnesses from just a tiny drop of blood. Her story came apart when a Wall Street Journal investigation revealed that her company was using commercially available devices for its test results.
At its zenith in 2015, Theranos had more than 800 employees.
Holmes put on a big act that included faking a deeper voice and wearing black turtlenecks like Steve Jobs. “I believed it would be how I would be … taken seriously and not taken as a little girl or a girl who didn’t have good technical ideas,” she said in a 2023 New York Times interview.
She was brilliant at leveraging connections and her affectations duped an astonishing list of people who should have known better.
Her board included former secretaries of state George Shultz and Henry Kissinger. Also on the board was former CEOs Dick Kovacevich of Wells Fargo and Riley Bechtel of Bechtel, among other luminaries. Her major investors included Silicon Valley venture capitalist Tim Draper, media mogul Rupert Murdoch, and the Walton family of Walmart fame.
It is simply embarrassing how many aristocrats, media outlets and institutions fawned over Holmes, who if nothing else proved that Silicon Valley will buy anything.
Among myriad honors: Time Magazine named Holmes among its 100 most influential people. The Harvard Medical School put her on its board of fellows. Pepperdine University awarded her an honorary doctorate. Forbes ranked her No. 73 in its list of “the world’s most powerful women.” She became the youngest recipient of the 2015 Horatio Alger Award honoring distinguished Americans. And President Barack Obama named her Presidential Ambassador for Global Entrepreneurship.
Her father, Christian Rasmus Holmes IV, was once a vice president at Enron. Go figure.
Following Holmes’ conviction, Murdoch, who invested $125 million in Theranos, reportedly sent an email to The Wall Street Journal. In it, he called himself “one of a bunch of old men taken in by a seemingly great young woman! Total embarrassment.”
Samuel Israel III - Bayou Group
Samuel Israel III ran the Bayou Group and scammed his investors out of about $450 million – cementing his place as one of the most notorious fraudsters in the hedge fund industry.
In 2008, he was sentenced to 20 years in prison, but he made one of those unilateral decisions to skip out. He faked his suicide by abandoning his car near the Bear Mountain Bridge in New York and scribbling “Suicide is Painless” in the dust on the hood.
His flight from authorities was poorly planned and even less successful than his financial career. Feds launched a nationwide manhunt and found him living in a recreational vehicle at a rural Massachusetts campground. He’d been on the run for less than a month. His girlfriend Debra Ryan received three years probation for helping him dodge authorities.
Israel had been leasing a $32,000 a month mansion from none other than Donald Trump. He fled a life of Trumpian luxury to squat in an RV park.
Israel co-founded Bayou Group 1996, promising investors consistently high returns. Like a lot of money managers who turn out to be frauds, he was a lot better at sales pitches than actual investment strategy.
Israel came from a wealthy New Orleans family and leveraged family and industry connections. He sold investors on a complicated trading strategy, but Bayou apparently never made money by trading.
As the company foundered, Israel and his associates created bogus financial records to make it appear it was thriving. They even created a fake accounting firm to pull this off. Instead of admitting losses, they used new investor money to pay off old investors in classic Ponzi style.
Hedge funds are risky investment portfolios, typically for the wealthy and large institutions. They employ unique investment strategies, and they are largely unregulated, under the theory that their investors are sophisticated folks and should know what they are doing.
Unfortunately, even sophisticated folks can be conned by people they think they know. Among Bayou’s victims were Martin Payson, the former vice chairman of Time Warner, and the Jewish Federation of Metropolitan Chicago.
Israel also conned a former Goldman Sachs managing director, Steven Starker, into lending him $3 million. Israel repaid Starker with two bad checks imprinted with SpongeBob SquarePants.
Israel also stiffed Trump on $64,000 in unpaid rent – a remarkable feat, stiffing an infamous stiff.
The scheme unraveled in 2005 and Israel eventually pleaded guilty to investment fraud, conspiracy, and other financial crimes. He was also ordered to pay $300 million in restitution.
He is scheduled to be released from prison next year.
Charles Keating – Lincoln Savings & Loan
As Charles Keating became the poster boy for the savings and loan crisis in the 1980s, he cloaked himself in self-righteousness and phony piety.
The head of Irvine, Calif.-based Lincoln Savings and Loan was such an outspoken moralist that President Nixon put him on the President’s Commission on Obscenity and Pornography. He even got Mother Theresa to show up at his sentencing hearing and ask the court for leniency.
When San Francisco-based regulators began investigating the debts and conflicted deals piling up at the his S&L, he reportedly told his staff that they were just some “homos” who were “out to get him” for his strong moral views.
As he fought every attempt to regulate and investigate his S&L, he had five U.S. Senators in his back pocket, including the late GOP Sen. John McCain. Each of these Senators, known as the “Keating Five,” were eventually were rebuked by the Senate Ethics Committee.
When Lincoln failed in 1989, it cost the federal government more than $3 billion. Keating received the maximum 10-year prison sentence for his crimes. The sentencing judge quoted Woodie Guthrie: “More people have suffered from a fountain pen than from a gun.”
Keating died in 2014 at the age of 90.
Chris Kirchner – Slync
Christopher Kirchner founded Southlake, Texas-based Slync in 2017 as a Salesforce-like platform for supply chain logistics. The software startup grew quickly to about 100 employees, and it scored a $240 million valuation before the entrepreneur’s worst impulses drove it just as quickly into extinction.
Kirchner had raised nearly $71 million from venture capital firms, then he looted the company to pursue his wildest sports fantasies.
Among his many extravagances, he spent $16 million on a 2010 Gulfstream G550 jet to fly to celebrity golf tournaments that his company sponsored. He also came close to buying an English soccer team, but he couldn’t produce the funds needed to close the deal as his looted empire collapsed.
He bought a luxury suite at AT&T Stadium where the Dallas Cowboys play. He bought exotic vehicles, including a Rolls Royce, a Ferrari Superfast 812, and a Mercedes Benz G-Class. He adorned himself with jewelry including a $500,000 Richard Mille watch, several Rolexes and a Cartier necklace. He also acquired pricey artwork and collected expensive bottles of wine.
His spending spree didn’t stop, even as Slync failed to meet payroll. He allegedly fired two employees who raised concerns about his management, including one who reported that he was exaggerating Slync’s financial performance.
Kirchner was sentenced to 20 years in prison in July 2024 and ordered to pay $65 million in restitution.
“Even as his company was circling the drain, Chris Kirchner was spending millions of his investors’ money on himself,” said U.S. Attorney Leigha Simonton. “Apparently, projecting personal prosperity was more important to him than making payroll.”
It’s astonishing how a man in his mid-30s could con so many sophisticated investors. Venture capital firms that poured money into Slync included Goldman Sachs Growth, ACME Ventures, 235 Capital Partners and Correlation Ventures.
Where was their oversight?
“In business I believe in transparency, trust, humility and respecting authority,” Kirchner told a British business publication in May 2022 before his myriad lies were exposed. “Those are qualities I have grown up with.”
Dennis Kozlowski – Tyco
Dennis Kozlowski became a caricature of corporate greed after allegedly using company funds to buy impossibly priced things, including a $15,000 umbrella stand and a $6,300 sewing basket for his $19 million New York apartment.
The company he led, Tyco, is a conglomerate that runs a security business, yet it couldn’t even protect its own shareholders from a money-grubbing CEO.
Kozlowski paid himself $81 million in unauthorized bonuses.
He was renowned for the $2 million party he threw for his wife’s 40th birthday in June 2001 on the Italian island of Sardinia. He hired Jimmy Buffett and a staff of toga-wearing waiters. He ordered an ice sculpture shaped like Michelangelo’s David that dispensed vodka from its penis.
In September 2005, Kozlowski was convicted on charges that he looted Tyco and manipulated its stock. Chief Financial Officer Mark Swartz was also convicted.
Kozlowski served more than six and a half years in New York state prisons, and he was ordered to pay $167 million in restitution and fines.
In March 2007, he granted a jailhouse interview to “60 Minutes” in which he claimed a jury sent him to prison for being rich.
“I was a guy sitting in a courtroom making $100 million a year,” Kozlowski said. “And I think a juror sitting there just would have to say, ‘All that money? He must have done something wrong.’”
Ken Lay – Enron
Enron founder and chairman Ken Lay had to take the wheel when CEO Jeffrey Skilling abruptly resigned on Aug. 14, 2001.
“We regret Jeff’s decision to resign, as he has been a big part of our success for over eleven years,” Lay told investors at the time. “But, we have the strongest and deepest talent we have ever had in the organization, our business is extremely strong, and our growth prospects have never been better.”
It was a big lie, especially for the son of a Baptist preacher, and Lay had only a snowball’s chance in hell of getting out of it.
On Dec. 2 of that year, the company filed bankruptcy and was soon exposed as one of the most massive accounting frauds of all time. More than 20,000 employees lost their jobs, and in many cases their life savings, since their retirement accounts were loaded with Enron stock. Investors all around the world lost billions.
At trial, Lay’s defense attorney Michael Ramsey played the Christian card.
“He is probably the biggest pillar that the … First Methodist Church has here in Houston. And Ken Lay, believe me, is not a courthouse Christian. There are so many people who get religion when they come to court – they haven’t had it all their lives – that I am proud to represent somebody that has been bone-solid church-bound all his life.”
Bankruptcy wasn’t a crime, Ramsey argued. This was all just an economic accident. A panic.
“I firmly believe I am innocent of the charges against me as I’ve said from Day One,” Lay said, walking out of a Houston courthouse during his trial.
Lay was convicted on numerous felony charges, but he maintained his innocence and ultimately scored a dismissal, but in a rather unfortunate way.
Shortly after his conviction, Lay flew to Aspen, Colo., for a summer vacation before his sentencing, then died of a heart attack. His conviction was thrown out on the technicality that dead men can’t appeal.
Which goes to show that a snowball’s chance in hell is still a chance.
Bernie Madoff – Madoff Securities
Bernie Madoff ran the largest Ponzi scheme in history, defrauding thousands of investors out of billions of dollars, until it all came crashing down with the 2008 financial crisis.
Regulators never caught him. He was only arrested after he turned himself in.
His firm, Bernard L. Madoff Investment Securities LLC, operated out of the iconic “Lipstick Building,” in Midtown Manhattan. It was in large part a classic affinity fraud targeting Madoff’s fellow Jews.
Many of Madoff’s victims begged to be in his fund upon hearing through word of mouth of his purported success. He often turned prospective investors down at first blush, acting as if it were a favor to let new victims into his fraud.
Victims also included Jewish organizations, including the Elie Wiesel Foundation and Steven Spielberg’s Wunderkinder Foundation.
In December 2024, the Justice Department announced it had returned $4.3 billion in recovered funds to 41,000 investors. The department said these were mostly small investors who’d put less than $500,000 into the fund, and that they had been made about 94% whole.
Madoff’s Ponzi scheme was estimated to be a $65 billion fraud when it imploded during the 2008 financial crisis. But that figure was wildly inflated with made-up investment gains that Madoff investors believed they were getting.
Nobody knew how Madoff could possibly achieve the returns he claimed he was delivering to his investors. And nobody thoroughly checked because he had undue respect as the former chairman of NASDAQ.
In May 2001, Barron’s published a profile on Madoff that was more cloying than skeptical, and it didn’t get the attention it deserved: “Don’t Ask, Don’t Tell: Bernie Madoff is so secretive he even asks his investors to keep mum.”
"It’s a proprietary strategy,” he told Barron’s. “I can’t go into it in great detail.”
Madoff also suckered regulators into cozy relationships – so cozy that a U.S. Securities and Exchange Commission attorney married his niece, Shana Madoff.
Shana’s father, Peter Madoff served as chief compliance officer at the family business, and Shana worked there, too, as a compliance officer and attorney.
Instead of cracking the case, SEC lawyer Eric Swanson fell head over heels for Shana. And while Madoff was still at the top of his game, several SEC officials attended the wedding on Sept. 29, 2007.
The marriage was symbolic of the incompetence and dysfunction of a financial regulator that let Madoff’s Ponzi scheme run wild for decades. By some accounts, he’d been robbing his investors since the late 1970s.
Buckling under the pressure of maintaining a massive web of lies in a stock market collapse, Madoff turned himself into authorities in December 2008. But for a time, people believed, or at least tolerated, every drop of nonsense that spilled from Madoff’s mouth.
In 2007, Madoff spoke at conference, “The Future of the Stock Market,” arguing that securities regulations protected investors against the very kinds of schemes he was so brashly perpetrating at that very moment.
“It does not mean there are not abuses, for sure,” he said, “but by and large in today's regulatory environment, it’s virtually impossible to violate the rules.”
This is how gullible people are in the presence of perceived Wall Street royalty: Days after Madoff’s arrest, Jay Berkman, a New Jersey business consultant, began impersonating Madoff on a blog, attracting readers who believed hilarious ramblings that no criminal suspect awaiting trial would ever actually say.
“I’m Bernard Madoff. Trust Me,” he began. “What? You think that just because I’m in jail, I shouldn’t be blogging?”
Berkman said he was astonished at how many readers didn’t notice it was a gag.
“Greed is always going to supersede caution,” he said. “As long as there’s human nature, and as long as there’s someone that’s clever, it’s going to repeat itself time and time again.”
Madoff pled guilty in March 2009 to 11 felonies. During his plea hearing he said:
“I am painfully aware that I have deeply hurt many, many people.”
“When I began my Ponzi scheme I believed it would end shortly and I would be able to extricate myself and my clients from the scheme."
“As the years went by, I realized that my arrest and this day would inevitably come."
He received received 150 years. His brother Peter received 12 years. His son, Mark, hanged himself in 2010. His son Andrew died of lymphoma in 2014.
Bernie died in prison in 2021 at age 82.
Robert De Niro played Madoff in the May 2017 HBO film, The Wizard of Lies, based on the best-selling book by New York Times reporter Diana Henriques.
A less handsome actor might have played him more convincingly – like Danny DeVito, who played the Penguin in the 1992 film, “Batman Returns.”
“You gotta admit,” the Penguin chirped. “I played this stinking city like a harp from hell.”
Billy McFarland – Fyre Festival
Billy McFarland sold tickets for thousands of dollars to the now-infamous Fyre Festival.
Guests paid small fortunes for a luxury music event on a Bahamian island, but they ended up riding in school buses, sleeping on bare mattresses in storm-damaged tents, and eating cheese sandwiches from foam containers.
The best entertainment to come of the fiasco were competing documentaries by Netflix, “FYRE: The Greatest Party That Never Happened,” and Hulu, “Fyre Fraud.”
McFarland received a six-year prison sentence in 2018 for fraud and still owes millions to his investors and ticket buyers.
“Billy McFarland has shown a disturbing pattern of deception, which resulted in investors and customers losing over $26 million,” said Manhattan U.S. Attorney Geoffrey Berman following McFarland’s sentence. “Empty promises don’t lead to jet-setting, champagne, and extravagant parties – they lead to federal prison.”
McFarland was released in 2020 and immediately began promising a redo. He began selling tickets in early 2025 for Fyre 2. He billed it as a three-day event at Isla Mujeres off the coast of Cancun, Mexico, from May 30 through June 2, 2025.
Somehow, there were no sentencing requirements that would have prevented him from selling tickets to another dubious event.
Here’s how McFarland explained his do-over in a press release:
“I’m sure many people think I’m crazy for doing this again. But I feel I’d be crazy not to do it again. After years of reflection and now thoughtful planning, the new team and I have amazing plans for Fyre 2. The adventure seekers who trust the vision and take the leap will make history. Thank you to my partners for the second chance.”
Surprise, surprise – Fyre 2 never happened. McFarland apparently couldn’t find a big enough round of new suckers, so he canceled the event, and he put the Fyre brand up for sale in April 2025.
Here’s what he wrote about that on the festival’s Instagram page:
“After two years of rebuilding FYRE with honesty, creativity, and relentless effort, it’s time to pass the torch. We’re officially putting the FYRE brand up for sale. To the right buyer: the platform is yours. Execute the vision. Make history.”
When he’s making a pitch, McFarland often tells people they can make history with his big idea, but he’s the one who made history … as a shameless huckster.
He’s having a Fyre sale, and so far, there are no takers.
Michael Milken – Drexel, Burnham, Lambert
Junk Bond King Michael Milken became a symbol of Wall Street greed in the 1980s, and, with his ally Ivan Boesky, he helped inspire the character played by Michael Douglas in the iconic 1987 film “Wall Street.”
At the now defunct firm, Drexel Burnham Lambert, Milken pioneered the high-yield bond market that enabled corporate raiders to pursue leveraged buyouts and hostile takeovers. He personally made $1 billion over a four-year run, a record at the time.
In 1986, Boesky pleaded guilty to securities fraud as part of a widespread insider trading investigation. The rogue stock trader implicated Milken as part of a plea deal.
Milken was indicted in 1989 and pleaded guilty to securities and reporting violations. He was banned from the securities industry, fined $600 million and sentenced to 10 years in prison, though only ended up serving about two years.
Milken is a study in redemption for white collar crooks seeking to clear their sullied reputations.
Following his release from prison in 1993, Milken launched a public relations campaign to characterize his prosecution as a bum rap and position himself as a lauded philanthropist. He became a major funding source for cancer research, particularly prostate cancer, which he personally survived.
One beneficiary of Milken’s prostrate cancer contributions was Rudy Giuliani, who prosecuted Milken when he was the U.S. Attorney in Manhattan. Giuliani lived on to support Milken’s request for presidential pardon. And President Donald Trump pardoned Milken in 2020.
Milken has long kept a low public profile, but for decades he has carried tremendous influence as the founder of The Milken Institute, a nonprofit, nonpartisan think tank in Santa Monica, Calif.
The organization is focused on financial, physical, mental, and environmental health issues. It annually gathers some of the world’s most influential leaders to work on some of the planet’s most vexing problems.
In announcing a pardon, Trump noted Milken’s valuable contributions to cancer research. “He suffered greatly,” Trump said. “He paid a big price; paid a very tough price.”
Barry Minkow – ZZZZ Best
Barry Minkow was sentenced at age 23 for the textbook fraud case study known as the ZZZZ Best Co., a carpet-cleaning company.
After taking the company public, he claimed a net worth of $90 million, drove a red Ferrari with a “ZZZZ BEST” license plate, and appeared on Oprah as a financial wunderkind.
After it was all exposed, Minkow headed to prison for nearly eight years. Though Jewish, he claimed to have found Jesus while jailed. And when he got out, he embarked on what was by many accounts a miraculous transformation.
Minkow earned a master’s degree in divinity from Jerry Falwell’s Liberty University. Then he became pastor of Community Bible Church in San Diego.
He also wrote a book called “Cleaning Up: One Man’s Redemptive Journey Through the Seductive World of Corporate Crime.” He served as an informant for law enforcers and a source for journalists. A 2018 movie, “Minkow,” tells his life story.
Minkow founded what he called the "Fraud Discovery Institute" to take on corporate fraud.
Over time, Minkow won the praise of his former prosecutor and even Judge Dickran Tevrizian. “He has done some good things,” Tevrizian told CBS’s “60 Minutes” in 2005. “He’s uncovered several hundreds of millions of dollars worth of frauds. And I give him credit for that.”
Unfortunately, Minkow would bet against the companies he targeted as a fraud investigator, taking short positions in the stock market. He claimed he always disclosed this practice – making it legal.
He traded stock options of Lennar in 2009 while he accused the Miami-based homebuilder of financial fraud. His accusations caused Lennar’s stock to plunge more than 20%. Lennar fired back with a lawsuit accusing him of libel and extortion.
Lennar eventually won a $584 million judgement against Minkow. He was also found guilty on criminal charges for manipulating Lennar’s stock and sent back to prison for another five years in 2011.
But that wasn’t enough. “Pastor Barry” also stole $3 million from his church and borrowed hundreds of thousands of dollars from church members. For this, he earned yet another a five-year prison sentence in 2014.
Minkow has since served his time. Discovery+ released a three-part docuseries, called, “King of the Con,” exploring how he manages to reinvent himself after serving prison terms.
Minkow is again operating as an informant. He recently blew the whistle on a Secaucus, N.J.-based real estate fund National Reality Investment Advisors whose chieftain was sentenced to prison 12-years in prison in 2024.
Minkow has a personality disorder, according to court records, and he lives with the constant risk of backsliding. But as long as he’s out, it’s sure got to hurt scammers when their Ponzi schemes are exposed by a guy who once ran an even flashier Ponzi scheme.
Michael “Mickey” Monus – Phar-Mor
Sam Walton couldn’t figure out how Michael “Mickey” Monus could open 300 stores in 33 states in just ten years.
What the Walmart founder didn’t know was that Monus was doctoring the books at Phar-Mor, the pharmacy chain he founded in his hometown of Youngstown, Ohio, in 1982.
The fast-growing retailer falsely inflated earnings to conceal massive operating losses. The $1 billion scheme involved every trick from fake inventory counts to bogus invoices.
Phar-Mor filed bankruptcy in 1992. And in 1995, Monus was convicted on 109 counts of fraud and embezzlement. He subsequently served 10 years in prison.
The chain once boasted 25,000 employees and $3 billion in revenue.
“Having reached the 300th store, there's no stopping us now to being a national retailer and to having a store in every major market across the country,” Monus said at the top of his game.
Monus was former high school basketball player who stood 5’9” tall. He and went on to create the very short-lived World Basketball League, a professional minor league featuring players under under 6'5" tall.
He was also an original owner of the Colorado Rockies baseball team that began playing in 1993.
To fund his sports fantasies, and to support his lavish lifestyle, Monus embezzled about $10 million from Phar-Mor as the retailer crumbled.
Monus made history in the 1990s for perpetrating one of the largest corporate frauds in U.S. history – only to be surpassed by Enron and WorldCom in the 2000s.
Joe Nacchio – Qwest
Joe Nacchio was a former AT&T executive who lorded over an Enron-style accounting fraud at Denver-based Qwest from 1997 to 2002.
The upstart telecommunication company acquired legacy carrier U.S. West in 2000, leveraging the inflated value of its stock, but its fortunes turned sharply after the deal closed. Qwest barely avoided bankruptcy, wiping out the life savings and retirement accounts of thousands of employees.
The company paid $250 million to settle accounting fraud charges with the Securities and Exchange Commission in 2004. Investigations showed managers fudged their numbers under pressure from the top. Shareholder lawsuits mounted. Several executives were sanctioned or prosecuted.
Nacchio, however, was not pursued criminally for the accounting fraud that had decimated his company. Instead, he was convicted on insider trading charges and served his prison sentence from 2009 to 2013.
Nacchio has always maintained his innocence. He says his prosecution was retaliation from the federal government after he refused to turn over data to the National Security Administration, standing up for the privacy rights of Qwest customers.
Nacchio was combative with everyone from his underlings to the media. Even as Qwest stock plunged, he publicly took on Wall Street analysts who questioned the company’s aggressive accounting practices and financial forecasts that far exceeded an industry in steep decline.
His bluster, however, was never enough to overcome reality.
"You all think we cheat and lie and steal,” he said at a Goldman Sachs conference on Oct. 3, 2021. “And therefore you trade us at a discount to what a normal company with great revenue and great growth should be traded. And I’m not going to convince you on that. We’ll just let the numbers speak for themselves on Oct. 31.”
Then on Oct. 31, 2021 he said this:
“Some of you will recall that at a recent conference I said the results will speak for themselves. The reality is, they do not speak clearly for themselves without some interpretation given the current economic conditions and the effects of merger and other one-time charges.”
Charles Ponzi – Boston swindler
Hardly a week goes by before prosecutors or regulators expose a new a Ponzi scheme. Italian immigrant Charles Ponzi didn’t invent this classic grift, but in the 1920s he ran it so well that he defined it for perpetuity.
Countless scams later, you never hear anyone say they got taken in a Madoff scheme. Even after Bernie Madoff took investors for billions they still call his crime a Ponzi scheme.
Ponzi schemes are so childishly simple that it’s a testament to human stupidity and greed that anyone still falls for them. Perpetrators typically promise investors outsized returns. They may then make good on these promises to early investors, who are easily conned into reinvesting and telling their friends to invest as well. New money goes to pay off old investors as the scammers skim the pot until the inevitable collapse.
Ponzi promised clients a 50% profit within 45 days or 100% profit within 90 days. He made the ridiculous claim that he could buy postage coupons in other countries and cash them out in the U.S. for more – but he did none of this. He his scam ran for more than a year before it collapsed, costing his victims $20 million.
Typically, these frauds require a charmer with remarkable sales skills. Someone who smiles at adversity and oozes delusional confidence. Someone like Charlie Ponzi.
Ponzi's father was an Italian army general who sent him to a French boarding school. There, he cultivated aristocratic airs. He immigrated to the U.S. in 1903.
“I landed in this country with $2.50 in cash and $1 million in hopes, and those hopes never left me,” he once told The New York Times.
He stood only 5-feet-2 but maintained a grand presence. He wore expensive suits and swung a gold-headed cane as he strode the streets of Boston.
Money poured in so fast, Ponzi's employees collected it in wastepaper baskets.
Ponzi became a celebrated business genius. He bought a mansion, jewels for his wife, and a limousine. He got fat lines of credit from banks. He even acquired a controlling interest in the Hanover Trust Co. with $3 million in a suitcase.
He was so convincing that even police who examined his company decided to invest.
A Boston newspaper pointed out that Ponzi’s claims didn’t add up – you can’t make millions trading stamps for pennies. But for a time, Ponzi always paid. So Bostonians cheered him and booed the newspaper. (You can still hear it from suckers today: Fake news! Fake news!)
Later, Boston newspapers reported that Ponzi had run a similar scam in Montreal and had been sentenced to 20 months in prison for forgery. Ponzi insisted the story was false. But by then his scheme was unraveling.
Ponzi went to prison again. Upon release, he ran a swampland scam in Florida.
After he was deported to Italy, Benito Mussolini gave Ponzi a treasury job, believing him to be an international banker. Later, Ponzi worked for an Italian airline that flew to Brazil. There, he demanded bribes from people smuggling money.
Ponzi spent his last months as a charity patient in a Rio de Janeiro hospital. He died in 1949 at the age of 66. But he must have known he’d earned his place in history. In one of the last photos taken of Ponzi, he is propped up in his hospital bed, and he is smiling.
Raj Rajaratnam – Galleon Group
Raj Rajaratnam was one of the highest-profile insider-trading targets of former U.S. Attorney Preet Bharara following the 2008 financial collapse.
Bharara successfully prosecuted Rajaratnam for bagging $63.8 million in illicit profits from 2003 to 2009, trading in such stocks as eBay, Goldman Sachs and Google. A federal judge sentenced Rajaratnam to 11 years, the longest prison sentence ever imposed on an insider-trading convict.
Rajaratnam got many of his tips from former Goldman Sachs Group Inc. director Rajat Gupta, who was also prosecuted. They were longtime business associates and even played bridge and chess together in prison.
Rajaratnam came to the U.S. from Sri Lanka and founded Galleon Group, a hedge fund that at one time managed about $7 billion in assets and employed 180 people.
“Raj Rajaratnam stood at the summit of Wall Street, commanding his own financial empire,” Bharara said following the judge’s ruling. “Mr. Rajaratnam stood convicted 14 times over of felonies, his empire exposed as a web of fraud and corruption that entangled many. … It is a sad conclusion to what once seemed to be a glittering story.”
But it wasn’t quite the end. Life for Rajatnam went on, even behind bars.
“I went to bed overnight with a clear conscience and slept well,” Rajaratnam said in a 2021 interview with Forbes. “I felt I cleared my name but the jury saw it different. When they did, I walked into prison with my head high.”
A federal correction officer saw to it that Rajaratnam had an easy prison stay. William S. Tidwell, 50, of Keene, New Hampshire, pleaded guilty to taking $90,000 in benefits and getting a $50,000 loan from an “ultra-high net worth” inmate, identified as Rajaratnam.
Rajaratnam was not charged in that case and he was released in 2019 after serving nearly eight years.
After serving his time, Rajaranam published a woe-is-me memoir, “Uneven Justice,” in 2021, alleging prosecutorial overreach. Instead of getting a fair trial, he claims he was scapegoated for the 2008 financial crisis.
He used the charity defense in proclaiming his innocence, as if people who do good things would never do bad things.
“I just want to correct you on one thing,” he said in a 2021 CNBC interview. “I did not make a single cent. If everything I did was illegal, the money went to the investors. Right? It didn’t come to Raj Rajaratnam’s pocket. I gave more to charity than what was alleged that I was made. So how can you call me greedy?”
John Rigas – Adelphia Communications
John Rigas founded cable TV giant Adelphia in 1952 in Coudersport, Pa., and turned it into his family’s piggy bank.
Prosecutors alleged that he took as much as $1 million a month in cash withdrawals from Adelphia. These transactions weren’t documented, nor did Rigas sign any papers promising to pay it back.
On and on the looting went.
He used Adelphia funds to acquire the Buffalo Sabres hockey team.
He set out to build a 1,000-acre golf course on his own land for $15 million.
He bought 3,600 acres of timberland.
He and his sons used $1 billion in company funds to buy Adelphia stock for themselves. Then they borrowed $250 million in cash to cover margin calls when the stock price plunged.
Rigas’ daughter got $3.7 million to set up two film production companies.
Rigas’ son-in-law got $65 million to fund his own venture capital firm. Rigas’ wife’s interior decorating company got a $371,000 order.
He spent $6,000 flying Christmas trees to his daughter in New York.
All the while, Adelphia was cooking the books to hide more than $3 billion in unrecorded debts owed by the Rigas family. The Securities and Exchange Commission called it “one of the most extensive financial frauds ever to take place at a public company.”
Adelphia filed for bankruptcy in 2002. Comcast and Time Warner Cable bought it in pieces for $17.6 billion in 2006.
Rigas was sentenced to 15 years in prison, but he was released due to his declining health after nine years. His son, Timothy, received a 20-year sentence, but has also been released. His other son, Michael, received 10 months of home confinement.
Rigas claimed Adelphia’s bankruptcy filing was misunderstood and that he was a victim of an aggressive corporate prosecution in the Enron era.
“It was a case of being in the wrong place at the wrong time,” he said in a 2007 interview with USA Today. “If this had happened a year before, there wouldn’t have been any headlines. … There was no fraud.”
His defense attorney, Mark Mahoney, did him no favors when he resorted to an imperious analogy before the jury.
“John Rigas was a king,” he told jurors. “His sons were the princes. When the time came for blaming, all the fingers were pointed at them and they were overthrown. It wasn't regicide, it was Rigas-cide.”
Richard Scrushy – HealthSouth
Richard Scrushy beat the rap that the FBI laid on him in 2004 for accounting and securities irregularities at HealthSouth. But after his acquittal, he was convicted in a corruption and bribery scandal involving former Alabama Gov. Don Siegelman.
Prosecutors alleged that Scrushy agreed to pay more than $500,000 of Siegelman's debt in exchange for a seat on the Certificates of Need Review Board – which reviews hospitals and approves their construction. Scrushy was sentenced to six years in prison in 2007 and was released in 2012.
At HealthSouth, Scrushy oversaw a $6.5 billion acquisition spree, possibly aided by phony accounting, prosecutors alleged. He took over rehabilitation, surgery and diagnostic clinics nationwide, and in serving the sick and dying, he paid himself a fortune.
He was accused of using intimidation, threats, and cash payments to coerce top HealthSouth executives into committing fraud. And in the end he blamed his underlings.
He defends himself vigorously, wrapping himself in religion, patriotism and victimhood to this day. He bills himself as a “business visionary” and “inspirational speaker” on his website richardscrushy.com.
“Richard Scrushy was born in 1952 in Selma, Alabama, a town known as the birthplace of the civil-rights movement. He grew up modestly in a home with working parents and he has an older sister and a younger brother. The Scrushy’s attended the Methodist church, where Mr. Scrushy sang in the youth choir and participated in the Methodist Youth Fellowship. He was active in Boy Scouts and little-league baseball, and at the age of eight, Richard taught himself to play piano and guitar. Throughout school, he played piano and organ at dances and parties.”
Jeffrey Skilling – Enron
Enron CEO Jeffrey Skilling abruptly resigned on Aug. 14, 2001, to spend more time with his family.
He’d spent 10 years building Enron from a natural gas pipeline to the seventh-largest publicly traded corporation in America. And all of a sudden, he claimed he longed for a simpler life.
”This is purely a personal decision,” he told investors in a conference call. “I can’t stress enough that it has nothing whatsoever to do with Enron. I’m doing it solely for personal and family reasons.”
Enron Chairman Ken Lay immediately took his place and tried to calm the market.
On Dec. 2 of that year, the company filed bankruptcy and was soon exposed as one of the most massive accounting frauds of all time. More than 20,000 employees lost their jobs, and in many cases their life savings, since their retirement accounts were loaded with Enron stock. Investors all around the world lost billions.
Wall Street lost confidence in Enron following an April 2001 investor call, in which a hedge fund manager demanded more details on the company’s finances.
“You know, you are the only financial institution that can’t produce a balance sheet or a cash flow sheet with their earnings,” the hedge fund manager complained.
Skilling shot back with a flustered, arrogant response: “Well, uh … Thank you very much. We appreciate it … asshole.”
The call was eventually played for jurors who sealed Skilling’s fate. Skilling was convicted on numerous felony charges, despite blaming underlings for the fraud and maintaining his innocence to the very end.
“Your honor, I am innocent of these charges,” he said at his federal sentencing in 2006. “I am innocent of every one of these charges. We will continue to pursue my constitutional rights. … I feel very strongly about this, and I want my friends, my family to know that.”
Skilling was released from prison in 2018 after serving 12 years of a 24-year sentence.
Martha Stewart – Martha Stewart Living
Martha Steward is still extending her middle finger at the prosecutors who sent her to prison in 2003 for lying about her alleged insider stock trades.
“It was so horrifying to me that I had to go through that to be a trophy for these idiots in the US Attorney’s office,” she said in the 2024 Netflix documentary “Martha.”
Amid enormous scandals at Enron, WorldCom and other massive corporations, Stewart was targeted for a relatively small infraction – avoiding a loss of nearly $46,000 on an illegal stock trade. And she paid a steep price.
Many counted the news as a death knell for Martha Stewart Living OmniMedia, the publicly traded empire she built over her lifetime. Shares of her company went into a tailspin, crushing her shareholders, but Stewart mounted a comeback campaign in 2005, and the stock recovered over time. So did her reputation.
To this day, many observers white-wash the debacle, saying Stewart was unfairly targeted as a woman by overzealous prosecutors who were under pressure to score white-collar convictions amid an epidemic of corporate fraud.
Some of this is true. But Stewart, who savagely pursued perfection, made key mistakes.
In fact, she settled insider trading charges with the Securities and Exchange Commission in 2006, agreeing to a five-year ban on serving as director of a publicly traded company. She was also criminally convicted in 2004 of obstruction and lying to investigators about her stock trades, landing her in prison for five months.
She was in many ways the victim of bad legal advice. Her shoddy defense counsel even allowed her to meet with investigators unprepared. She might have been able to settle the charges with the SEC without admitting nor denying guilt, and that might have been the end of it. But no. She had to get wise with investigators.
Things also might have turned out differently if she had never met ImClone Systems CEO Samuel Waksal, a family friend who dated Stewart’s daughter.
Waksal went to prison for nearly seven years after advising family and friends to dump ImClone shares ahead of a public announcement that the Food and Drug Administration had just rejected its cancer-fighting drug.
Stewart did her time with dignity, reinvented herself following her incarceration and even built up enviable street cred with a younger generation by hanging out with Snoop Dogg. She also became the oldest woman to pose for the Sports Illustrated swim suit edition at age 81.
She remains viciously unrepentant.
“Those prosecutors should have been put a Cuisinart and turned on high,” she said in the Netflix documentary.
Samuel Waksal – ImClone Systems
Samuel Waksal took a break from his long and successful career as a biotech entrepreneur to serve several years in prison for insider stock trading.
The immunologist was admittedly arrogant enough to believe he could be immune from consequences. He put family members in legal peril and set off a chain of events that landed his most famous friend, Martha Stewart, in prison.
Waksal founded New York-based ImClone Systems in 1984. When he learned the Food and Drug Administration had rejected its cancer drug, Erbitux, he scrambled to dump stock and warn family and friends ahead of a public announcement.
He tried, but was unable, to unload about 80,000 shares. Family members sold more than $10 million worth of stock, though, catching regulators’ attention.
His stockbroker at Merrill Lynch, Peter Peter Bacanovic, gave Stewart a heads up to sell her shares, which ultimately resulted in five month prison sentences for both of them.
ImClone stock fell 16% once the company announced its FDA approval had been rejected.
Waksal pleaded guilty to securities fraud, bank fraud, obstruction of justice and perjury charges in late 2002. He was sentenced to more than seven years in prison and was released in 2009.
Waksal was no one-hit wonder when it came to malfeasance. News reports noted that long before Waksal’s insider trading debacle, he’d been dismissed from several academic and research positions for reckless behavior and ethical lapses. In 2003, he also pleaded guilty to two criminal charges for dodging $1.2 million in sales tax on $15 million worth of artwork.
Before heading to prison, he was candid and remorseful about his misdeeds in media interviews.
“I was arrogant enough at the time to believe that I could cut corners, not care about details that were going on and not think about consequences,” he told CBS News. “Did I know that I had committed an illegal act? Yeah, I knew. I tried to rationalize beyond rationality that I hadn’t.”
It was all for naught. The FDA finally approved Erbitux in 2004 and the drug was lauded for aiding thousands of cancer patients. In 2008, Erbitux generated $1.5 billion in sales and Eli Lilly bought out ImClone for $6.5 billion.
After prison, Waksal resumed his life as a biotech entrepreneur, founding Kadmon, which sold for $1.9 billion to Paris-based biotech company, Sanofi, in 2021. He is now CEO of another biotech company that he founded, Graviton Bioscience.
“The day I was arrested was a horrible day in my life,” he told CBS News. “It is very difficult for someone who thinks about himself as someone who does good things for society to be led away, in handcuffs, and thought about as a common criminal.”
Carlos Watson – Ozy Media
Carlos Watson founded Ozy Media in 2013 and took the ol’ “fake-it-‘til-you-make-it” route to a felonious extreme.
Watson worked on Wall Street, and even hosted his own show on CNBC. But he is now more famous for participating in a phony phone call with Ozy co-founder Samir Rao in a desperate bid to attract a $45 million investment from Goldman Sachs.
Roa was pretending to be Alex Piper, head of unscripted programming for YouTube Originals. He asserted that YouTube was paying big bucks for an Ozy show and promised that massive advertising dollars were soon to follow.
Rao, who pled guilty to fraud and identity-theft charges, testified that Watson was in on the call.
A jury found Watson guilty on fraud and identity-theft charges in July 2024. He was sentenced to 116 years in prison in December. And in March, just as he was about to start serving that time, President Donald Trump commuted his sentence.
Watson co-founded Ozy Media in 2013 and it collapsed in 2021 following the New York Times’ thorough reporting on the fake call. The company targeted a young, diverse audience with digital newsletters, television shows, podcasts and live events, including a gathering called “Ozy Fest.”
Ozy Media attracted tens of millions in investment dollars from Steve Job’s widow, Laurene Powell Jobs, Silicon Valley venture capitalist Ron Conway, and Google’s former Chief Legal Officer David Drummond.
Berlin publishing giant Axel Springer, investment bank Lion Tree, and iHeart Radio also invested. The Ford Foundation backed it with grants. All told, Ozy Media reportedly raised more than $83 million by April 2020 and valued itself at $159 million.
Watson, a charismatic Miami native, graduated from Harvard University and Stanford Law School. In 2003, he hosted CNBC’s “The Edge with Carlos Watson,” and he later became one of CNN’s main political analysts. He was also an anchor at MSNBC. And he worked at McKinsey & Co. and Goldman Sachs, where he teamed up with Roa.
Watson’s first move was to blame Rao, weaving a tale about his trusty business partner having a mental health crisis.
“Samir is a valued colleague and a close friend,” Watson said in an apology he emailed to Goldman Sachs and the New York Times. “I’m proud that we stood by him while he struggled, and we’re all glad to see him now thriving again.”
As lame as it sounded, Watson continued this story in his defense. “This case was about a crooked co-founder named Samir Rao who lied to, who undermined and who betrayed Carlos Watson,” Watson’s lawyer told the jury.
It didn’t wash. Evidence showed Watson was in the room with Rao, texting instructions about what to say and what not to say as Rao impersonated Piper.
“The jury found that Watson was a con man who told lie upon lie upon lie to deceive investors,” said U.S. Attorney Breon Peace. “Ozy Media ultimately collapsed under the weight of Watson’s dishonest schemes.”
The phone call was just one of many frauds. Ozy Media and three of its top executives lied about revenue, cash-on-hand, profits, celebrity ties, acquisition prospects and contract negotiations. They forged documents and touted deals with Google and Oprah Winfrey that were never even possibilities.
They grew increasingly desperate as they blew through other people’s money and couldn’t show the progress needed to raise more.
“We told so many lies to so many different people,” Rao testified “It morphed into survival at all costs and by any means necessary.”
Ozy’s chief of staff Suzee Han, who also pleaded guilty to fraud charges, served as a witness against Watson as well. “I lied about Ozy’s past performance and historical financials,” she told the court. “We, and I mean Carlos, lied about how the company was doing.”
Former Chief Financial Officer Tripti Thakur resigned immediately after Watson ordered her to send a forged contract to a bank to secure a loan. “To be crystal clear,” she told Watson, “what you see as a measured risk — I see as a felony.”
Q.T. Wiles – MiniScribe
There was a time when computer drives weighed much as bricks. Q.T. Wiles, the CEO of a struggling Colorado manufacturer called MiniScribe, thought his auditors wouldn’t know the difference.
Wiles was renowned as “Dr. Fix-It,” a corporate turnaround specialist for San Francisco-based venture cap giant Hambrecht & Quist.
He went to prison after the people he oversaw loaded 26,000 bricks into boxes. MiniScribe recorded these boxed bricks as inventory and even revenues to make up for a shortfall on in its quarterly financial goals.
Wiles demanded that his employees make their numbers or leave. He dressed them down, and even fired them, in meetings. These antics led to managers fudging numbers.
Eventually, the hole they dug got too deep. Wiles then approved a scheme to fool Miniscribe’s independent auditors with bricks.
This was as dumb as the proverbial box of rocks.
It was astonishing how many mangers and employees went along with the scheme, and it’s audacity opens the question of what Wiles might have gotten away with during his long career as a corporate turnaround specialist. Typically, crooks get caught when they habitually break laws. Are we to believe this was his first rodeo?
After the company filed bankruptcy, Maxtor bought its pieces. Wiles was convicted in 1994, served about two and a half years in prison, and lived to be nearly a century old.
Here’s what his brick looks like today:
Michael Wise – Silverado Savings and Loan
Michael Wise was an icon of the savings and loan bust as the former CEO of Denver’s Silverado Banking where he helped stick taxpayers with a $1 billion tab when the S&L collapsed in 1988.
Making this implosion world-famous was U.S. President George H.W. Bush’s son Neil, who got a regulatory wrist-slapping after serving on Silverado’s board.
Wise got off easy, too. He was ultimately acquitted on bank-fraud charges related to his personal loans from the thrift, but regulators barred him from the S&L industry.
In the end, Colorado’s biggest banking scandal resulted in just one conviction. That of the thrift’s majority shareholder, W. James Metz, who got a six-year prison sentence, but only had to serve six months of it.
For a time, Wise had come a long way from Emporia, Kan., where his parents raised hogs and cattle. He was smart, charismatic, impeccably groomed and always wearing the priciest of suits. He lived in a Tudor, country-club mansion befitting his aristocratic presence.
After the Silverado debacle, he moved on to Aspen, Colo., where he headed Cornerstone Private Capital, which made high-dollar, high-interest real estate loans in the local mansion market.
He essentially ran Cornerstone like a Ponzi scheme, fleecing nearly $9 million from his investors. In 1999, he pleaded guilty to wire fraud and received a 3-1/2-year prison sentence.
“I will work the rest of my life if necessary to pay back the money involved,” he wrote in a bizarre confession.
“I’ve hurt a lot of people,” he told the judge at his sentencing. “I’ve done major wrongs.”
Wise served his time a federal prison camp in Leavenworth, Kan., and was released in 2002. Then, inexplicably, he began running a mortgage company from St. Petersburg, Fla. just before the housing bust that set off the 2008 financial crisis.
Chris Likens, owner of Prairie Village, Kan.-based Nations Holding Co., the parent of CFIC Mortgage, claimed he hired Wise because he thought Wise was a talented businessman who deserved yet another chance. (It was actually his third chance, but back in those reckless days who was counting?)
CFIC had boasted about 350 branches in 48 states, but it shut down as the 2008 financial crisis loomed and Wise was out of a job.
On April 8 2009, Wise drove a rental car to the top floor of the parking garage at the Tampa International Airport. Surveillance cameras captured him nervously pacing and witnesses said he jumped. He died in an emergency room.
--Robert Brennan, First Jersey Securities. Fraudster.
--Joseph Jett, Kidder Peabody derivatives trader; cost the firm millions and it had to be sold
--Nick Leeson, Barings derivatives trader who brought down the bank
--Angelo Mozilo; non-doc subprime mortgages played huge role in the financial crisis
Gee, what's the name of that guy with orange hair that will once again pretend that he plays a president on TV??!! Ya, that guy hits all the marks!