Milken, Boesky, Pickens, Rigas, Ebbers: Their names were once household words, back in the 1980s, 1990s, and 2000s: Financial fraudsters who lived the high life until their crimes (or purported crimes) brought them down. In February 2020, two of them were back in the news. Let's check in with this financial five, to see where they are today.
- Michael Milken received a presidential pardon in 2020.
- Ivan Boesky, at last report, leads a private, sheltered life in California.
- T. Boone Pickens died in 2019.
- John Rigas lives quietly in his hometown with his family.
- Bernard Ebbers died in 2020.
"The Junk Bond King," as he was known in the 1980s, Michael Milken was indicted on 98 charges of securities fraud in 1989. Pleading guilty in 1990 to six felony counts of securities fraud and conspiracy, he was sentenced to 10 years at a federal minimum-security prison and was barred for life by the SEC from working in the securities field. He served nearly two years, before being released with a diagnosis of prostate cancer.
After his release, Milken reinvented himself into a leader in business education and crusader against cancer: His website describes him as a medical research innovator, philanthropist, and financier. He did do a few business deals, negotiating CNN’s $7.5 billion sale to Time Warner in 1996, which sparked an SEC complaint that he'd violated the ban (it was dropped after Milken paid a $47 million fine). He helped initiate Bizmore, a website dedicated to educating executives at small- and medium-sized companies on topics relevant to today's growing companies. He operates through a nonprofit think tank, the Milken Institute.
On Feb. 18, 2020, President Trump granted him a full pardon.
Considered one of America's richest stock market speculators in the late 1970s and early '80s, "Ivan the Terrible" was arrested in 1986 for insider trading. Ivan Boesky paid $100 million in penalties and served three years in prison for betting on corporate takeovers using inside information and illegally manipulating the stock. He was also barred by the Securities and Exchange Commission from the world of trading, and acted as a government informant on other financial industry malefactors, including Milken.
The leading real-life model for the fictional Gordon Gekko in the film Wall Street, Boesky was also notorious for a commencement speech he gave at the University of California, Berkeley, School of Business Administration, in which he stated: "Greed is all right, by the way. I want you to know that. I think greed is healthy. You can be greedy and still feel good about yourself."
After he left prison, Boesky enrolled in rabbinical studies and became involved in projects helping the homeless. Since then, Ivan Boesky has stayed out of the spotlight, living quietly in La Jolla, California on the $23 million he received in a 1991 divorce settlement from his wife.
T. Boone Pickens
Pickens got his start in the oil and gas industry in the 1950s, founding the company that became Mesa Petroleum. But he soon realized the potential in acquiring oil companies, and by the 1980s, Pickens was known as a takeover specialist and corporate raider. His business tactics were said to put many independent oil producers out of business, throwing thousands of people out of work. He was also accused of greenmail: Launching a takeover bid, then getting companies to buy back their shares from him at a premium in exchange for promises that he would just go away.
Unlike the others on our list, Pickens was never charged, much less convicted, of any actual crime. But his arguably unscrupulous ways caught up with him in the mid-1990s; Mesa Petroleum ran into financial trouble, ironically became a target of corporate raiders, and finally was sold. The new management promptly ousted Pickens in 1997.
Undaunted, Pickens founded the BP Energy Fund, later renamed BP Capital Management, a natural gas-oriented hedge fund. He also reinvented himself as an environmentalist who believed in pushing green power while also focusing on philanthropic duties such as the T. Boone Pickens Foundation. BP Capital closed in January 2018, ostensibly because of Pickens' poor health. He died in September 2019; his net worth, once estimated at $3 billion, had fallen to a mere $600 million or so.
Rigas was the founder of Adelphia Communications Corp., the fifth-largest cable company in the United States. He was forced to retire as CEO in 2002 after being indicted for securities, bank, and wire fraud; prosecutors charged him with hiding $2.3 billion in debt, and using corporate funds for personal, luxurious use. Adelphia filed for bankruptcy.
He was convicted along with his son Timothy in 2004 and sentenced to 15 years in prison. He was released early, in 2016, due to a diagnosis of bladder cancer.
After his own release, Rigas fought to get his son's sentence commuted. He finally succeed in 2019. They live quietly in Coudersport, Penn., once the seat of Adelphia.
Ebbers was the CEO of WorldCom, the nation's second-largest long-distance telecommunications company around the turn of the 21st century. Ebbers owned hundreds of millions of dollars in WorldCom stock, which he borrowed against to invest in other business ventures. But after WorldCom's stock price plummeted in 2000, Ebbers had to cover more than $400 million in margin calls and he began producing fraudulent accounting statements to prop up the company's finances and share price.
Tipped off by the company's internal audit department, the SEC investigated. Ebbers was eventually charged, tried, and convicted on March 15, 2005 after being charged with nine counts of conspiracy, securities fraud, and making false regulatory filings.
Ebbers began a 25-year sentence in federal prison in 2006. After he'd served 13 years of his term, a federal judge ordered his release due to health reasons. He died shortly thereafter, in February 2020.
The Bottom Line
Does financial crime pay? It's hard to say. Of this quintet of less-than-honorable gentlemen, some have thrived and some have died after their crimes have been uncovered. Most have paid, in one way or another, for their actions; whether they've fully repaid their debt to society remains a question mark on their bottom line.