New York (
)-- The most memorable people on Wall Street are not always the Dimons or
, but are more often on the front of national newspapers being led into police cars in handcuffs. They are the Gordon Gekkos of Wall Street, and the decade was full of them.
Between 2000 and 2010 some of the largest Ponzi schemes, insider trading rings and white collar crimes that caused the fall of some of the largest companies. The greed exposed during crimes over the past ten years eventually lead to more transparency, better accounting rules and enhanced regulatory oversight.
To commemorate how far we've come since the beginning of the decade we've put together a slideshow of the most memorable perp walks of this decade and where these individuals are now. Let's hope history does not repeat itself.
Don Ching Trang Chu
On November 24, 2010 Don Ching Trang Chu, an executive with
Primary Global Research
, was arrested and charged with securities and wire fraud. Chu is accused of acting as a go-between, providing insider information from employees of technology companies, including Broadcom, to hedge fund traders. Chu's arrest led to a larger on-going insider trading ring investigation.
Another Primary Global Research executive James Fleishman was arrested on December 16, 2010 on similar charges. Also arrested were
Advanced Micro Devices
employee Mark Anthony Longoria; Walter Shimoon, an employee
Flextronics International Ltd.
Taiwan Semiconductor Manufacturing
employee Manosha Karunatilaka. A supply manager at
, was also arrested, pleaded guilty to wire fraud and conspiracy to commit securities and wire fraud on December 10, 2010,
Chu apparently told investigators that he did most of his work in Asia,
. Chu is due to go to trial in early 2011.
Robert Allen Stanford, the chairman of
Stanford Financial Group
was arrested June 19, 2009 by the Federal Bureau of Investigation outside his girlfriend's home in Fredericksburg, Virginia. Stanford was charged by the
Securities and Exchange Commission
in an $8 billion fraud involving sales of certificates of deposit through his Antiguan bank.
The SEC alleges that the $8 billion of certificates of deposit were invested in real estate and private equity and managed by Stanford and CFO James Davies when it was supposed to be invested in financial instruments managed by monitored by more than 20 analysts and audited by Antiguan regulators.
Stanford is considered a flight risk and is currently a resident of the Federal Detention Center in Houston Texas. A U.S. judge has set a trial date of January 2011, according to
Stanford pleaded not guilty to the charges. He could face life in prison if convicted on all counts.
Since being arrested Stanford has been stripped of his knighthood, gone from billionaire to broke, was beaten up by an inmate in jail and has gone through six sets of lawyers, according to
Bernie Madoff of
Bernard L. Madoff Investment Securities
was arrested on December 11, 2008 for securities fraud.
In March 2009, Madoff pleaded guilty to 11 federal crimes and admitted to running a $65 billion Ponzi scheme. He was sentenced to 150 years in prison and is currently at a Federal Prison in North Carolina.
Madoff confessed to starting his scheme in the 1990s and maintained that he acted by himself. Since then collegues Frank DiPascali and David Friehling have pleaded guilty in the case. In addition, five of Madoff's former employees are also facing charges including: Annette Bongiorno, JoAnn "Jodi" Crupi, Daniel Bonventre, Jerome O'Hara and George Perez.
Irving Picard has been busy with lawsuits and collecting money for those who lost money in Madoff's Ponzi scheme. He has sued Madoff's sons' Mark and Andrew; hist daughter Shana; as well as his brother Peter for breach of fiduciary duty. All worked at the firm. Picard has also sued
for $1 billion.
Madoff's wife Ruth Madoff forfeited claims to $80 million in assets. The assets have been gradually auctioned off over the past two year. Picard has gotten back and authorities have gotten back $9.8 billion for the victims of the fraud so far.
Madoff's son, Mark Madoff, committed suicide on the two-year anniversary of his father's arrest. Madoff did not attend the service out of respect for Mark's family.
Kenneth Lay was the CEO, chairman and founder of Enron from 1985 to Jaunuary 2002. Lay and Jeff Skilling (who was CEO from February 2001 to August 2001) built Enron into an emergy powerhouse, but through various scandals led the firm into bankruptcy.
Investigations into Enron started when shareholders lost nearly $11 billion when Enron's stock price plummeted from $ 90 per share to $1 from 2000 to 2001. The company's financial statements were not transparent and use of accounting misrepresented earnings. The company's auditor Arthur Anderson was forced to surrender its licenses in 2002.
Lay was arrested by the FBI July 8, 2004 after Jeff Skilling who was arrested in February of 2004.
Skilling and Lay were both found guilty of conspiracy and fraud in May of 2006. Lay's sentencing was scheduled to take place on 11 September 2006, but was later rescheduled for October 23 2006.
Lay, who could have spent the rest of his life in prison, died in July 2006 from a heart attack.
to 24 years and four months in prison at a Federal Correctional Institution in Waseca, Minneapolis where he is currently serving his sentence.
Sam Israel and Daniel Marino
Samuel Israel III founded the
Bayou Hedge Fund Group
in 1996. Isreal, who was CEO, and CFO Daniel Marino raised $450 million from investors. The two used the cash collected from investors for personal use and lied about the fund's returns to investors. The two also cooked up a dummy accounting firm to do its own auditing.
Federal prosecutors sued Bayou in 2005. Isreal and Marino pled guilty to fraud in September of 2005. Israel and Marino were sentenced in April 2008 to 20 years in federal prison.
In a desperate attempt to escape time in prison, Israel tried to fake his suicide in 2008 by having his girlfriend plant his car on the Bear Mountain Bridge with,"Suicide is Painless" written in dust on the hood.
Isreal, who was living in an RV, finally surrendered in July 2008 and was sentenced to 2 extra years for trying to escape his time in prison. His girlfriend, Debra Ryan, was arrested for aiding him in his escape and was later released on bail.
Israel's failure to report to Devens prison on June 9, 2008 added two more years to his sentence, bringing his total sentence to 22 years.
The Isreal and Marino are currently serving their terms. Marino is in a prison in Forrest City, Arkansas.
Jerome Kerviel was a trader at
in France. Kerviel is credited with being a rogue trader who almost brought the bank.
Kerviel joined the bank in 2000, working in a compliance department and was promoted to junior trader by 2005.
He was arrested January 26 2008 after Societe Generale accused the trader of fraud and losing $6.7 billion dollars. It was later discovered that Kerviel made $69 billion in risky bets, which was more than the market value of the bank.
Kerviel maintained that the bank and his bosses encouraged massive risk-taking as long as it made money while Societe Generale said that Kerviel made fictitious trades using the companies system.
Kerviel was sentenced to serve three years in prison and has to pay back $6.7 billion to Societe Generale.
Raj Rajaratnam, is the founder of
, a New York-based hedge fund. He was arrested on October 16, 2009 by the FBI for allegedly committing insider trading. Rajaratnam allegedly made a profit of $20.6 million from trading on information he received from technology executives.
U.S. prosecutors say that Rajaratnam and five others swapped information concerning
( HLNQ). The five others include: Rajiv Goel, a director of strategic investments at
; and Robert Moffat, senior vice president in the systems and technology division of computer group
, Anil Kumar, who worked as a director at
McKinsey & Co.
and the former officials at
Bear Stearns Asset Management
who were affiliated with Galleon's
New Castle Partners
Danielle Chiesi and Mark Kurland.
Rajaratnam had to liquidate his holdings in Galleon by January 2010 due to his arrest. Rajaratnam has said he is innocent and is currently fighting the charges of insider trading.
The government secretly recorded about 2,400 conversations between Rajaratnam and over 130 people. Rajaratnam's challenged the use of the recordings, but that was overturned by Judge Richard Holwell. Rajaratnam will stand trial for security fraud and conspiracy starting February 28 2011.
Leo Dennis Kozlowski
Leo Dennis Kozlowski is the former CEO of
who was forced to step down in 2002 due to $81 million in unauthorized bonuses he allegedly received. Kozlowski also apparently purchased art for $14.7 million and paid Frank Walsh a $20 million for an investment banking fee from Tyco for the acquisition of
Two days after he stepped down Tyco discovered that the company had spend $19 million on an apartment in New York City for the company's CEO. Tyco had apparently spent millions more decorating the apartment.
Kozlowski was tried twice. The first trial started in September of 2003, but was deemed as a mistrial after one of the jurors was threatened.
Kozlowski was convicted in 2005 of 38 felony counts with CFO Mark Swartz for taking $170 million from the company and $430 million through stock sales. The two were forced to pay back $134 million to Tyco. Kozlowski was fined $70 million and Swartz $35 million.
Kozlowski is currently serving his sentence at Mid-State Correctional Facility in Marcy, New York. His parole hearing is in April 2012. His release dates is set for May 2022.
Ralph Cioffi and Matthew Tannin
hedge fund managers Ralph Cioffi and Matthew Tannin were arrested by the FBI in June of 2008 for misleading investors about the health of two Bear Stearns hedge funds that could have prompted subprime mortgage crisis. Cioffi was also charged with insider trading.
Emails between Cioffi and Tannin in 2008 demonstrated that the two were,
of the markets, according to a reporty by
. Cioffi left Bear Stearns in December after the funds collapsed. Three months later Bear Stearns was purchased by
JP Morgan Chase
for about $1.4 billion in stock.
The two lost 300 investors $1.6 billion in funds. Cioffi and Tannin would have faced 20 years in prison each and Cioffi would have faced an extra 20 years for insider trading.
In November of 2009 a jury found the two not guilty and they were acquitted.
Scott Rothstein was an attorney at
Rothstein Rosenfeldt Adler
. He was arrested December 1, 2009 was arrested for running a Ponzi scheme using faked legal settlements. The Ponzi scheme totaled $1.2 billion.
In October of 2009 he fled to Morocco, wired $16 million to Casablanca and sent a suicide message to all of his partners. He returned for Casablanca in November, where his law firm--left with only $117,000-- filed a suit against him.
Rothstein pleaded guilty on January 27 2010. He admitted to using the money to buy several vacation homes and apartments, yachts and cars. The government seized a Bentley convertible, multiple Ferrari's, several Rolls Royce's, a Hummer, a Bugatti, a Maserati and a Lamborghini after his conviction. All his homes and vehicles were auctioned off.
Rothstein's firm, which once employed 70 lawyers and 150 people is now defunct. Rothstein was convicted on June 9, 2010 and sentenced to 50 years in prison.
Bernard Ebbers is a co-founder and former CEO of
. The long-distance phone company was forced into bankruptcy in July 2002 after a $3.85 billion in accounting misstatement. It was later discovered that Ebbers helped mastermind an $11 billion accounting fraud that caused the firm to go under.
Ebbers orchestrated a scheme to boost WorldCom's share price in an effort to protect his $1 billion personal fortune. The firm apparently overstated profits by $3.8 billion. Three other WorldCom executives also admitted to fraud including CFO Scott Sullivan and the former controller David Myers.
In 2005 Ebbers was convicted of fraud and conspiracy. He was sentenced to 25 years in prison.
He is currently serving a 25-year prison term at Oakdale Federal Correctional Complex in Louisiana.
John Rusnak was a currency trader at
Allfirst Financial Bank
, which was a subsidiary of
Allied Irish Bank
. In 2002 it was discovered that Rusnak was making fake trades and hid losses of $691 million over five years.
Rusnak tried to hide his losses by supposedly conducting five option trades with at least four other banks that raised about $300 million in cash. However these trades were actually synthetic loans. Rusnak also fabricated prices for fake trades, according to the charges.
On January 17, 2003 Rusnak was sentenced to seven and a half years in prison. Rusnak served a prison sentence until September 2008 and was then confined to his home until January 2009. He was released early and is required to pay $1,000 a month for five years.
AIB sold Allfirst to
in July 2003 after the scandal.
John Rigas and Timothy Rigas
John Rigas is one of the founders of
Adelphia Communications Corporation
. Rigas and his son Timothy Rigas were arrested for fraud in July 2002.
John Rigas was forced to resign as CEO of the company in May 2002 and his son was forced to resign as CFO after they were indicted for bank fraud, wire fraud and securities fraud.
Rigas' other son Michael Rigas, along with collegues James Brown and Michael Mulcahey also faced charges in cooperating with the John and Timothy Rigos who allegedly hid $2.3 billion in liabilities from investors. Michael was later acquitted.
In 2004, Rigas and his son Timothy were convicted of taking $3.1 billion in loans and tax evasion. In June of 2005 Rigas was sentenced to 15 years in prison and Timothy was sentenced to 20 years behind bars.
John and Timothy Rigas were locked up at the Federal Correctional Complex, Butner, on August 13, 2007.
In 2008 John Rigas got his sentence reduced by three years. His release date is scheduled to be January 23, 2018.
was forced to file for bankruptcy after the scandal.
Thomas Petters is the former CEO of
Petters Group Worldwide
. Petters was arrested on charges of mail and wire fraud, money laundering and obstruction of justice in October of 2008.
Petters and several associates told investors that they were purchasing merchandise from smaller vendors and reselling products to larger stores like
and used false purchase orders to pursuade investors. Petters purchased
Sun Country Airlines
as part of his scheme.
In April 2010 Petters was convicted of turing Petters group into a $3.65 billion Ponzi scheme. He was sentenced to 50 years in prison, with no possibility of release until 2051.
In October 2008 Petters Group Worldwide filed for Chapter 11 bankruptcy.
--Written by Maria Woehr in New York.
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