Billionaire Convicts And Inmates - Forbes

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Billionaire Convicts And Inmates

Keren Blankfeld,05.28.10

These individuals, who rank or have ranked among the world's richest, have spent time behind bars or are on the run.

 

 

Mikhail Khodorkovsky

 

Russia
Behind bars

In October 2003 the Kremlin ordered Khodorkovsky's arrest on charges of embezzlement. The oil tycoon, once Russia's richest man with a net worth of $15 billion, has been stuck in prison ever since. Formerly chairman of oil behemoth Yukos, Khodorkovsky made his fortune in the early 1990s in banking and commodities. But, he says, his outspoken criticism of Vladimir Putin ultimately led to him losing his empire and freedom. Khodorkovsky is currently on trial once again arguing his innocence on additional charges.

 

Wong Kwong Yu, 41, was once one of China's most celebrated and wealthiest entrepreneurs. He was the nation's richest person in 2006. Now he is behind bars, sentenced last week to 14 years in jail after having been convicted of insider trading and bribery.

Wong Kwong Yu

China
Behind bars

Once China's richest man, Wong Kwong Yu, also known as Huang Guangyu, was sentenced to 14 years in jail last week after being found guilty of "illegal business dealings" and of bribing officials with more than $600,000. Wong, who founded retailer Gome Electrical Appliances, ranked second among China's richest in October 2008, worth $2.7 billion. That November he was detained and reported to be under investigation for insider trading and stock market manipulation; he later resigned as Gome's chairman. Wong, who is out of our billionaire ranks, wasn't formally charged until this February.

 

 

Another former Asian billionaire could be in even hotter water. Thailand's former prime minister, Thaksin Shinawatra, was charged with terrorism this week. The Thai government claims he is responsible for spurring the anti-government Red Shirts during the violent chaos that inflamed the streets of Bangkok over the past two months leaving 88 dead. Thaksin denies involvement.

This isn't the first time that Thaksin, who made his fortune in telecom, has been in legal trouble. In 2006 he was ousted from the Thai government and in 2008 he was convicted in absentia to two years in prison on corruption charges. He never made it behind bars as he was already out of the country when convicted, reportedly having fled to Dubai. But his family lost the bulk of its money, which was seized by the government. This time, if he were caught, the consequences would be graver. The former billionaire, who has told reporters from his undisclosed location that he did not incite violence, could face the death penalty.

These two tycoons are just the latest examples of a long line of ultra rich outlaws, outcasts and convicts throughout history. There are today at least three former billionaires behind bars in addition to Wong. They include Russia's Mikhail Khodorkovsky and Platon Lebedev, who have already spent seven years in jail and are now on trial for additional charges. Khodorkovsky and his supporters have strenuously denied allegations against him, claiming he is a political prisoner whose outspoken criticism of prime minister Vladimir Putin cost him his freedom. Also locked up is R. Allen Stanford, the Texan financier accused (though not yet convicted) of running an $8 billion Ponzi scheme. Italy's Calisto Tanzi, Parmalat's co-founder was sentenced to 10 years in jail in 2008 for masterminding Europe's largest bankruptcy; he appealed, but the decision was recently upheld.

Rather than go to prison, other billionaires and former billionaires like Thaksin have opted to adapt to a life in exile or a life on the run from the law.

Joaquim Guzman Loera ("El Chapo"), the world's most wanted billionaire, has a $5 million reward being offered for any information leading to his capture. El Chapo has been on the run for nine years after reportedly escaping from jail in a laundry cart in 2001. Even while on the run, however, he's been making a fortune selling drugs through the Sinaloa cartel, one of the biggest suppliers of cocaine to the United States.

The Uzan family in Turkey, worth $1.6 billion in 2001, has its share of members in exile or in hiding. Just this April, Cem Uzan was convicted of various charges, including fraud and bribery. He's reportedly in exile in France avoiding his sentence of 23 years in prison. His father, Kemal, and brother, Hakan, are also suspects in the case. The outlaw family has been out of billionaire ranks since 2004 when the Turkish government seized more than 200 of its companies in an attempt to collect an alleged $5.9 billion in debt.

At least three other former or current billionaires have spent time in jail including domestic queen Martha Stewart, who spent five months in prison for obstruction of justice, and mall tycoon A. Alfred Taubman, who was behind bars for nine months for allegedly rigging art auctions. Both have returned to their respective empire helms; Taubman, worth $1.5 billion as of our last billionaire list in March, even wrote a book detailing his time behind bars. Stewart is still a multimillionaire but no longer anywhere close to being a billionaire.

Indeed, sometimes convictions are merely temporary setbacks. Three Korean billionaires charged with fraud have all been pardoned and are now running their firms. Chey Tae-Won, chairman of SK Group, South Korea's third-largest conglomerate by assets, spent seven months in prison after being convicted of accounting fraud in 2003. He subsequently rejoined his company as chairman and was pardoned in 2008. Samsung Electronic's chairman Lee Kun-Hee was convicted on charges of tax evasion and ordered to pay $130 million in overdue taxes, but he was pardoned in December. He has since returned to his role as chairman of Samsung Electronics, one of the biggest electronics companies in the world.

Currently awaiting an October trial, Galleon Group hedge fund titan Raj Rajaratnam, is hoping to keep his life outside the confines of a cell. Rajaratnam, who is out on bail, is accused of being at the center of a massive insider-trading ring. Although he denies wrongdoing, one of the other accused ring members, Mark Kurland, was sentenced this month to more than two years in jail. But Rajaratnam has reason to be optimistic. This week his lawyer said the Justice Department and SEC are looking into allegations that prosecutors leaked nonpublic information to the media.

Charges of prosecutorial misconduct worked to another accused billionaire's advantage this year. Henry T. Nicholas, Broadcom's (BRCM-news-people) co-founder, faced two trials this year and a potential 360 years in prison. He'd been charged with 21 counts of options backdating and 4 counts of drug conspiracy. In January, however, a California federal district judge unexpectedly threw out the charges on the basis of prosecutorial misconduct. Nicholas didn't even have to show up for his day in court.

R. Allen Stanford

United States
Behind bars

He once boasted a net worth of $2.2 billion, bragged that the government of Antigua and Barbuda had knighted him and claimed that he'd invested $100 million in a Caribbean cricket league. Now he is accused of running an $8 billion Ponzi scheme through his Stanford International Bank. He was indicted and arrested last year and in September he was reportedly hospitalized after getting in a fight with another inmate. In a Texas cell, Stanford, who has pleaded not guilty, awaits his 2011 trial on 21 criminal charges of defrauded investors.

Platon Lebedev

Russia
Behind bars

Khodorkovsky's former business partner and onetime billionaire was arrested four months before Khodorkovsky. He was also accused of embezzlement and is still under arrest, and like Khodorkovsky, undergoing a second trial denying accusations that he stole billions in profit from Yukos.

Calisto Tanzi

Italy
Lost appeal, convicted

Former billionaire founder of Parmalat, once the largest independent milk and dairy products company in the world, was accused of defrauding his company on his way to driving it into Europe's biggest bankruptcy, dubbed "Italy's Enron." After a 3-year trial, he was sentenced in 2008 to 10 years in jail. Tanzi appealed his conviction but it was upheld in May; meanwhile, police raided his home in December 2009 and confiscated more than $100 million worth of art. Parmalat emerged from bankruptcy in 2005 and later relisted on Milan exchange.

 

 

Thaksin Shinawatra

Thailand
Convicted fugitive

Thailand's former billionaire prime minister is on the run, with a warrant out for his arrest. He is charged with terrorism for allegedly leading the Red Shirts in the Bangkok mayhem that lasted two months and left at least 88 dead. Thaksin claims the charges are "based on false evidence." In a 2006 military coup he was ousted and later was convicted in abstentia to two years in prison for corruption charges. Thaksin has since lived in exile, spending most of his time in Dubai and London. Thai authorities froze more than $2 billion in assets. If arrested, he could face the death penalty.

Joaquim Guzman Loera

Mexico
Convicted fugitive

Mexico's most wanted man is on the run. A criminal who has amassed at least $1 billion illegally and violently heads the Sinaloa cartel, one of the biggest suppliers of cocaine to the U.S. Arrested in Mexico on homicide and drug charges in 1993, he escaped from federal prison eight years later, reportedly through the laundry. El Chapo is believed to have directed anywhere from a third to half the wholesale cocaine shipments since his 2001 prison escape. There is now a $5 million reward for information leading to his capture.

Kemal Uzan & sons

Turkey
On the run

In April Cem Uzan (pictured above), the son of a former Turkish billionaire, was convicted of various charges, including fraud and bribery. He's reportedly in exile in France avoiding his 23-year prison sentence. His father, Kemal, and brother, Hakan, are also suspects. The outlaw family has been out of billionaire ranks since 2004 when the Turkish government seized more than 200 of the family's companies in an attempt to collect an alleged $5.9 billion in debt.

 

A. Alfred Taubman

United States
Spent nine months in jail

Mall tycoon and former Sotheby's chairman spent nine months in jail in 2004 for allegedly rigging art auctions. Insisted he was innocent and published book in 2007 outlining his road to becoming a billionaire and describing his time in prison (Threshold Resistance: The Extraordinary Career of a Luxury Retailing Pioneer). He's since maintained his billionaire status (latest net worth: $1.5 billion). Taubman Centers owns 25 malls in 16 states. Taubman owns a large contemporary art collection.

Chey Tae-Won

South Korea

Spent nine months in jail

Chairman of SK Group, South Korea's third-largest conglomerate by assets; spent seven months in jail in 2003 for accounting fraud, returned to helm after release, then was pardoned in 2008. Two other Korean billionaires have had run-ins with the law. Hyundai Motor's Chung Mong-Koo was convicted of fraud but granted a presidential pardon in 2008. Lee Kun-Hee, chairman of Samsung Electronics, was convicted of tax evasion in 2009 but also granted a pardon in December.

 

Martha Stewart

United States

Spent five months in jail

One of the world's richest female entrepreneurs, this domestic diva donned an orange jumpsuit during a five-month stint in a West Virginia prison in 2004. Her conviction of obstruction charges related to an improper 2001 stock sale but didn't hurt her fortune initially. Share prices of her Martha Stewart Living Ominimedia more than doubled during her prison stay making her a billionaire once again. But that was short lived as the stock began falling once she was free. She has yet to return to the billionaire ranks.

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