After details of the Bernie Madoff Ponzi scheme came to light, many observers questioned why someone that had donated so much cash to good causes would at the same time destroy many charities through his fraudulent actions. Madoff's family foundation had donated over $19 million to varied medical care, cultural, religious and instructional charities. He also gave about $6 million to lymphoma research. Yet, Madoff's firm, Bernard L. Madoff Investment Instruments LLC, was at the same time controlling a massive investment crime that destroyed a large number of charitable foundations and led to big losses for many others. The
investment fraud attorney can debate to you about the reoccurring enigma of crime.
Instead of being a unusual occurrence, this odd partnership of corporate evildoing and charity has been quite common. The following is a list of ten widely known examples:
1. Bernie Ebbers, Founder and previous C.E.O. Of Worldcom: The person behind Worldcom's financial deception that cost stockholders about $100 billion was convicted of fraud and conspiracy in 2005. Yet, prior to his convictions, Ebbers had donated over $100 million bucks to assorted charities, though approximately $35 million of this related to his Worldcom stock, which had achieved superb value due to Ebbers ' evil-doing. Ebbers is presently serving a 25 year jail sentence and will not be suitable for release until 2028 when he will be 87 years of age.
2. Cliff Baxter, previous Vice-Chairman of Enron: Baxter pled guilty to numerous counts of fraud and conspiracy in connection with the Enron accounting scandal that predated its bankruptcy. He was famous for his indulgent donations to organizations like Junior Feat of Southeast Texas, the North American Diabetes Organisation, the North American Cancer Society and Sunlight Children, a charity dedicated to providing activities and trips for young cancer patients. Baxter committed suicide in his vehicle in 2002 in the train of the Enron disaster. He was 43.
3. Ken Lay, previous C.E.O. And Chairman of Enron: Lay was found guilty of ten counts of securities fraud and related charges in 2006 for his role in Enron's accounting scandal. He had donated more than $2.5 million to above 250 organizations thru his family's foundation and was behind Enron's policy of giving 1% of its profits to local charities. Lay keeled over from a cardiac arrest while awaiting sentencing.
4. Dennis Kozlowski, previous C.E.O. Of Tyco International: In 2005, Kozlowski was found guilty of grand larceny, instruments crime and other crimes related to his invoice of $81 million in unauthorized loans and bonuses, wrong payments and Tyco's fraudulent financial declaration. He gave freely to charities, though $106 million of his donations were made with Tyco's cash. He is suitable 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 confessed guilt to 6 securities violations and was given a decade in jail. He also paid a $600 million fine. Milken was released after serving only two years in gaol. At the time of his misdeeds, Milken was known as a generous philanthropist. His Foundation of the Milken Families has donated millions of greenbacks to various causes including $60 million dollars in educator awards and sizable donations to instructional institutions such as the Varsity of Pennsylvania and charities like the United Way. His philanthropy has led on to a Fortune Mag cover story calling him "The Man Who Modified Medication" due to his big medical care donations.
6. Richard M. Scrushy, founder and previous Chairman and C.E.O. Of HealthSouth Corporation: Scrushy was found guilty as charged of bribery and mail fraud regarding payments he made to Alabama's governor in return for appointment to the state board that regulated hospices. He was sentenced to 82 months in federal jail and got fined $2.87 billion. Scrushy co-founded Computer Help for Children, a charity that collected, refurbished and donated computers to school scholars and community groups. He also established a ministry to feed African youngsters, though this occurred as he was awaiting trial. Scrushy is appealing his conviction.
7. Lord Conrad Black, previous C.E.O. Of Hollinger. International: Black was found guilty of mail crime and obstruction of justice in 2007 and was given 78 months in prison. He's currently on the lam pending 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 Kids and serious amounts to varied tutorial establishments.
8. John Rigas, founder and previous C.E.O. Of Adelphia Communications Enterprise and majority owner of the Buffalo Sabres ice hockey team: Rigas was found guilty of multiple counts of crime and tax evasion for hiding $2.3 billion in liabilities from shareholders and making private use of company funds. When these misdeeds were uncovered, many folks came forward to provide yarns portraying Rigas as a giving person who consistently helped needy neighbors. But many of Rigas ' donations were made with Adelphia funds. At his sentencing, Rigas pled for kindness and noted his charity work. The judge answered by saying, "To be a great philanthropist with other persons ' cash is not extremely persuasive." Rigas was sentenced to 15 years in jail. He's scheduled to be released in 2018 when he will be 93 years old.
9. Ivan Boesky, businessman and stock trader: Boesky became well-known by amassing a fortune by trading on insider information re outstanding company takeovers. He confessed to illegal trading thru a plea arrangement that concerned him testifying against Michael Milken. He was given 3.5 years in jail and paid a $100 million fine. Boeksy became concerned in illegal trading schemes although 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 previous Manager of Worldwide Crossing Limited: Winnick made over $700 million by selling his shares of World Crossing just before the company slumped. While the SEC decided not to bring charges against him, investors brought a class action lawsuit against Winnick and others claiming crime. The accused settled the court action by paying the investors $325 million. Winnick, to his credit, also donated $25 million to employees who lost their 401K's on account of World Crossing's demise. Thru his family foundation, Winnick funded the Winnick Family Clinical Research Center at Cedars-Sinai Medical Center. He also donated $40 million for the Simon Wiesenthal Center's international conference center in Jerusalem and sponsored various grants.
Why would all of these blokes that were accused or found guilty of crime or criminality also have charity as a common denominator? One main factor is that these businessmen all generated millions of greenbacks thru their actions and had the wherewithal to make sizable donations without impacting their standard of living.
Other explanations dig into the mental kingdom. For some, making these gifts was a method to attaining larger disrepute. Donations were regularly publicized and, as in the case of Boesky and Winnick, regularly led on to buildings or stipends carrying the name of the donor. These businessmen could have simply wished to draw attention to their munificence. It's also likely that many of these fraud artists also saw charity as a means for balancing the guilt that they harbored for the harm they had caused financiers and others by perpetrating their swindles. They felt that if theydid something supererogatory with their funds, this would make their moral misdemeanours more satisfactory.
Regarding Bernie Madoff, I do not believe that he ever set out to form a Ponzi scheme that would finally be exposed. It is much more likely that his firm wasn't able to provide the investment returns that Madoff had promised and dipped into other financiers ' funds instead of admit to clients that he missed expectancies. Nonetheless rather than replacing these lost funds with excess future gains, the deficiency grew bigger until it was impossible. Therefore, Madoff never meant to broke these charities. It was an accidental consequence of his inability to confess failure to his clients and buddies. Nevertheless regardless of his true motivations, the fact is that Madoff's crime wrecked many charitable setups. He now joins these other entrepreneur that have mixed fraud and philanthropy. Welcome to the list, Bernie Madoff.
