After details of the Bernie Madoff Ponzi scheme came to light, many observers questioned why someone who had donated so much money to noble causes would concurrently destroy many charities through his fraudulent actions. Madoff\’s family foundation had donated over $19 million to varied health care, cultural, non secular and educational charities. He also contributed about $6 million to lymphoma research. Yet, Madoff\’s firm, Bernard L. Madoff Investment Instruments LLC, was concurrently managing an enormous investment fraud that wiped out a multitude of charitable foundations and led to enormous losses for many others. The investment fraud attorney can debate to you about the reoccurring ambiguity of fraud.
Rather than being a unusual event, this odd partnership of company wrongdoing and philanthropy has been quite common. The following is an inventory of ten well known examples:
1. Bernie Ebbers, Founder and previous C.E.O. Of Worldcom: The man behind Worldcom\’s fiscal deception that cost financiers about $100 bln was found guilty as charged of fraud and conspiracy in 2005. Yet, prior to his convictions, Ebbers had donated over $100 million dollars to numerous charities, though approximately $35 million of this related to his Worldcom stock, which had achieved superb value due to Ebbers \’ evil-doing. Ebbers is at present serving a 25 year jail sentence and won't be fit for release until 2028 when he will be 87 years of age.
2. Cliff Baxter, former Vice-Chairman of Enron: Baxter pled guilty to various counts of fraud and conspiracy regarding the Enron accounting scandal that predated its insolvency. He was legendary for his extravagant donations to setups like Junior Achievement of Southeast Texas, the American Diabetes Organisation, the North American Cancer Society and Sunlight Youngsters, a charity dedicated to providing activities and trips for young cancer patients. Baxter committed suicide in his car in 2002 in the wake of the Enron disaster. He was 43.
3. Ken Lay, former C.E.O. And Chairman of Enron: Lay was pronounced guilty of 10 counts of instruments crime and related charges in 2006 for his role in Enron\’s accounting scandal. He had donated more than $2.5 million to above 250 associations through his family\’s foundation and was behind Enron\’s policy of giving 1% of its profits to local charities. Lay died from a heart attack while waiting for sentencing.
4. Dennis Kozlowski, former C.E.O. Of Tyco International: In 2005, Kozlowski was found guilty as charged of grand larceny, securities fraud and other crimes related to his receipt of $81 million in unauthorized loans and bonuses, unacceptable payments and Tyco\’s fake fiscal notification. He gave generously to charities, though $106 million of his donations were made with Tyco\’s money. He is acceptable for parole in 2014.
5. Michael Milken, banker called the junk bond king: Milken was charged with 98 counts of racketeering and instruments fraud in 1989. He reached a plea bargain agreement whereby he admitted guilt to 6 securities violations and was given 10 years in jail. He also paid a $600 million fine. Milken was released after serving only 2 years behind bars. At the time of his misdeeds, Milken was known generally as a indulgent humanitarian. His Foundation of the Milken Families has donated millions of dollars to diverse causes including $60 million greenbacks in educator awards and large donations to instructional institutions like the University of Pennsylvania and charities such as the United Way. His philanthropy has led on to a Fortune Mag cover story calling him \”The Man Who Changed Medicine\” thanks to his massive medicare donations.
6. Richard M. Scrushy, founder and previous Chairman and C.E.O. Of HealthSouth Corporation: Scrushy was found guilty of bribery and mail crime in connection with payments he made to Alabama\’s governor in exchange for appointment to the state board that regulated hospices. He was sentenced to 82 months in Fed prison and got fined $2.87 bn.. Scrushy co-founded PC Help for Kids, a charity that collected, renovated and donated computers to school scholars and community groups. He also established a ministry to feed African children, though this happened as he was awaiting trial. Scrushy is appealing his conviction.
7. Lord Conrad Black, former C.E.O. Of Hollinger. International: Black was found guilty as charged of mail fraud and obstruction of justice in 2007 and was given 78 months in prison. He is currently free on bail outstanding a Supreme Court review of his case. His Black Family Foundation has donated millions of bucks to charities, including $3.4 million to Toronto\’s Hospice for Sick Youngsters and heavy amounts to various tutorial institutions.
8. John Rigas, founder and previous C.E.O. Of Adelphia Communications Co. and majority owner of the Buffalo Sabres ice hockey team: Rigas was found guilty of multiple counts of fraud and tax evasion for hiding $2.3 bn. in liabilities from stockholders and making personal use of company funds. When these misdeeds were exposed, many people came forward to provide anecdotes portraying Rigas as a giving person who consistently helped needy neighbors. Nevertheless lots of Rigas \’ donations were made with Adelphia funds. At his sentencing, Rigas pled for kindness and noted his charity work. The judge responded by saying, \”To be a great humanitarian with other people \’ money is not extremely persuasive.\” Rigas was handed 15 years in jail. He is planned to be released in 2018 when he is going to be 93 years in age.
9. Ivan Boesky, businessperson and stock trader: Boesky became well-known by assembling a fortune by trading on insider info regarding pending corporate takeovers. He admitted to insider dealing thru a plea arrangement that concerned him testifying against Michael Milken. He was handed 3.5 years in prison and paid a $100 million fine. Boeksy became concerned in illegal trading schemes even though he had more cash than he could spend at the time. Boesky donated $20 million for the Jewish Theological Seminary\’s library that was named for him.
10. Gary Winnick, founder and former Manager of Global Crossing Limited: Winnick made over $700 million by selling his stock of World Crossing shortly before the company collapsed. While the SEC decided to not bring charges against him, stockholders brought a class action lawsuit against Winnick and others saying crime. The accused settled the court action by paying the shareholders $325 million. Winnick, to his credit, also donated $25 million to employees who lost their 401K\’s as a result of Global Crossing\’s passing. Through his folks foundation, Winnick bankrolled the Winnick Family Clinical Research Center at Cedars-Sinai Hospital. He also donated $40 million for the Simon Wiesenthal Center\’s global meeting center in Jerusalem and funded various grants.
Why would all these men who were accused or found guilty of crime or criminality also have philanthropy as a common denominator? One main factor is that these businessmen all generated millions of greenbacks through their actions and had the resources to make large donations without impacting their standard of living.
Other explanations delve into the psychological kingdom. For some, making these gifts was a method to achieving larger notoriety. Donations were frequently publicised and, as in the case of Boesky and Winnick, often led on to buildings or stipends bearing the name of the donor. These businessmen may have simply needed to draw attention to their generosity. It is also likely that many of those fraud artists also saw charity as a means for offsetting the guilt that they harbored for the harm they'd caused financiers and others by perpetrating their tricks. They felt that if theydid something supererogatory with their funds, this would make their ethical transgressions more satisfactory.
With respect to Bernie Madoff, I don't believe that he ever set out to make a Ponzi scheme that would eventually be exposed. It is much more likely that his firm was unable to supply the investment returns that Madoff had guaranteed and dipped into other speculators \’ funds instead of admit to clients that he missed expectancies. Nonetheless instead of replacing these lost funds with excess future gains, the shortfall grew larger till it was impossible. Therefore, Madoff never planned to bankrupt these charities. It was an inadvertent effect of his incapability to confess failure to his clients and pals. However , without reference to his true motives, the fact remains that Madoff\’s fraud wrecked many charitable associations. He now joins these other businessperson that have mixed crime and charity. Welcome to the list, Bernie Madoff.
The article above is all about finra arbitration and finra lawyers . The author is Mailab Palma.
Bernie Madoff and the Reoccurring Anomaly of Crime and Charity
