Milken, Boesky, Pickens, Rigas, Ebbers, Madoff: Their names were once celebrated, back in the 1980s, 1990s, and 2000, but no longer. These were financial fraudsters who lived the high life until their crimes (or purported crimes) brought them down.
Let's check and see how these individuals have fared since.
- Michael Milken received a presidential pardon from Donald Trump 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.
- Bernie Madoff died in prison in 2021.
"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 a 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 purported inspiration 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 people experiencing homelessness. 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: he would launch a takeover bid, then get 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 $600 million.
John 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 succeeded in 2019. They lived quietly in Coudersport, PA, once the seat of Adelphia, until John died on Sept. 30, 2021 at the age of 96.
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.
Bernard Madoff is infamous for carrying out the largest financial Ponzi scheme in history. It is reported that over two decades, Madoff fleeced investors out of tens of billions of dollars before the fraud was revealed in 2008. Madoff had made a name for himself as one of the early adopters of electronic trading in the late 1980s, rising to prominence and becoming the chairman of the Nasdaq from 1990 to 1993. After that, he launched his own investment firm, bringing in billions from wealthy and affluent investors as well as tens of thousands of smaller, indirect investors from various feeder funds. Regulators and auditors, however, became suspicious after Madoff's fund consistently returned high returns, even when markets tumbled. In 2008, with markets falling amid the financial crisis, Madoff could no longer keep up the Ponzi scheme and ultimately confessed.
Madoff was sentenced to 150 years in prison in 2009 and died there in 2021 at the age of 82. Madoff always insisted that he carried out his fraud alone and that nobody else, not even his family who worked closely with him, knew.
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.