In a startling turn of events, former cryptocurrency billionaire Sam Bankman-Fried has been convicted on seven counts of fraud and conspiracy, potentially facing a staggering 110-year prison sentence. Once listed as one of America's richest individuals, Bankman-Fried, valued at up to $24 billion, saw his fortune reduced to zero after his crypto trading firm, FTX, filed for bankruptcy in November 2022.
However, he is far from being the only billionaire who has spent time behind bars. At least 11 billionaires or former billionaires have experienced incarceration or are currently serving sentences, with some still under home confinement. White-collar crimes have been the common thread among these affluent individuals, ranging from orchestrating massive frauds to bribery. An exception is Joaquin Guzman Loera, famously known as El Chapo, who Forbes recognized as a billionaire from 2009 through 2012 due to his leadership of the Sinaloa cartel, responsible for smuggling a significant portion of drugs from Mexico into the U.S. He is currently serving a life sentence for narcotics trafficking and money laundering.
Let's delve into the details of these cases:
1. Allen Stanford:
Time Served: 13 years of a 110-year sentence.
Net Worth: Dropped off the Billionaires list in 2009.
Stanford received one of the longest sentences ever handed to a billionaire in 2012. He was convicted for selling $7 billion in fraudulent certificates of deposits through Stanford International Bank, and his personal money judgment amounted to nearly $6 billion. His scheme is considered one of the largest Ponzi schemes in history.
2. Mikhail Khodorkovsky and Platon Lebedev:
Time Served: 10 years.
Net Worth: Khodorkovsky dropped off the Billionaires list in 2006, Lebedev in 2005.
Russian oil and gas business partners, Khodorkovsky and Lebedev, faced charges of tax evasion in 2003. Their initial trial was surrounded by political controversy, with Khodorkovsky claiming manipulation by Russian President Vladimir Putin. After being reconvicted in 2010 for embezzlement and money laundering, they served time in prison until their release in 2013 and 2014.
3. Raj Rajaratnam:
Time Served: 8 years.
Net Worth: Dropped off the Billionaires list in 2010.
Rajaratnam, a Sri Lankan-born billionaire, made his fortune through the hedge fund Galleon Group. However, he was arrested for insider trading in 2009, leading to his conviction and an 11-year prison sentence. He was released to home confinement in early 2019, thanks in part to the First Step Act.
4. Joaquin Guzman Loera (El Chapo):
Time Served: 5 years of a life sentence.
Net Worth: Dropped off the Billionaires list in 2013.
El Chapo, the notorious drug lord, was responsible for smuggling large quantities of cocaine into the U.S. for decades. He was finally convicted in 2019 on multiple counts of narcotics trafficking and money laundering, serving a life sentence and being ordered to pay $12.6 billion in forfeiture.
5. John Kapoor:
Behind bars: 3 1/2 years.
Net Worth: Dropped off the Billionaires list in 2019.
The founder and former CEO of the now-bankrupt pharmaceutical company Insys Therapeutics, Kapoor was sentenced to five and a half years in prison in January 2020 for conspiring to bribe doctors to unnecessarily prescribe his company’s fentanyl spray, Subsys, in a scheme that played a role in fueling the opioid crisis. In June this year, Kapoor was released to home confinement and is set to be released on December 17, 2023.
6. Thomas Kwok:
Time Served: 3 years.
Net Worth: $1.9 billion.
Kwok is one of the few who have retained a billion-dollar fortune after serving time. He and his two brothers, Raymond and Walter, inherited Hong Kong real estate investment firm Sun Hung Kai Properties from their father. Thomas Kwok was sentenced to five years in prison in 2014 for giving a bribe to then-Hong Kong chief secretary, Rafael Hui, in order to gain government favor. Kwok was released from prison in 2019 after serving more than three years of his sentence.
7. Michael Milken:
Time Served: 2 years.
Net Worth: $6.5 billion.
Milken made a name in the finance world for his pioneering approach to high-yield bond strategy for corporate mergers and acquisitions while working at the investment bank Drexel Burnham Lambert. In the late 1980s, an investigation led to Milken pleading guilty to six counts of securities and tax violations during his time at Drexel. On top of paying $600 million in fines, he served two years in prison and was banned for life from the securities industry. Since his release in 1993, he has become known for his philanthropy.
8. Jay Y. Lee:
Time Served: 18 months.
Net Worth: $8.6 billion.
The current executive chairman of Samsung Electronics and an heir to the Samsung fortune, Lee spent 11 months in prison in 2017 after he was sentenced to five years by a South Korean court for bribing the country’s then-President Park Geun-hye to support a merger between Samsung C&T and Cheil Industries. He served an additional seven months before being released on parole in August 2021.
9. Elizabeth Holmes:
Time Served: 5 months of an 11-year sentence.
Net Worth: Dropped off the Billionaires list in 2017.
Once the world's youngest self-made woman billionaire, Holmes has since become one of the most high-profile cases of fraud in Silicon Valley. The founder of medical device company Theranos was convicted of fraud and conspiracy in 2022 for lying to investors about the capabilities of her devices. She has been ordered to pay $452 million in restitution to her investors, who include billionaires Rupert Murdoch and Larry Ellison.
10. S. Curtis Johnson:
Time Served: 3 months.
Net Worth: $4.5 billion.
A great-great-grandson of Samuel Curtis Johnson, the patriarch of the SC Johnson company, S. Curtis Johnson was charged in 2011 with the sexual assault of his then teenage stepdaughter. He pled guilty to fourth-degree sexual assault and disorderly conduct charges in exchange for four months in jail and a $6,000 fine. He served three months in prison. Johnson owns a stake in his family’s company but has no involvement in the business.
These cases offer a sobering reminder that wealth and influence do not shield individuals from the consequences of their actions. Whether it's white-collar crimes, corruption, or other illegal activities, the legal system has shown that billionaires are not exempt from facing justice when they cross the line.
By fLEXI tEAM