Published May 12, 2011
May 12, 2011 – NEW YORK (Reuters) - When Raj Rajaratnam is sentenced on July 29, he could join a small club of fallen financiers and executives who've spent years behind bars.
The net worth of the Galleon Group founder has been estimated to be more than $1 billion. That places him close to, but not at the top of, a list of deep-pocketed white collar felons. Bernie Ebbers, the convicted CEO of WorldCom Inc, is said to have had a net worth of $1.4 billion before his conviction.
Who else is in Raj's league? Following is an alphabetical list:
--Boesky, the famed Wall Street stock speculator of the 1980s, was sentenced to three years in prison in 1987 after pleading guilty to a criminal charge related to insider trading. Boesky, who faced a maximum penalty of five years, cooperated with prosecutors in a probe that resulted in charges against more than a dozen people. In 1993, after being released from prison, he sued his ex-wife and received a lump sum of $20 million, plus proceeds of a California home valued at $2.5 million and $180,000 in annual support payments.
--The former WorldCom Inc CEO received a 25-year prison sentence for running a $11 billion fraud that led to the bankruptcy of his company. It was a long fall for Ebbers, then 63, who once appeared on the Forbes list of the 200 richest Americans. (He had a reported net worth of $1.4 billion, according to Forbes.) Ebbers was one of several corporate criminals who sought a pardon from President George W. Bush. Clemency was not granted, and Ebbers remains in prison in Oakdale, Louisiana.
--Kozlowski, who once threw a $2 million birthday party for his wife, was convicted in 2005 of stealing more than $150 million from Tyco International Ltd, the company he once ran. The fallen CEO was sentenced to a prison term of up to 25 years. Kozlowski paid $98 million in restitution as part of the criminal action; in a civil case, he was ordered to forfeit seven years of Tyco pay, estimated to exceed $100 million. Kozlowski is serving out his sentence in Marcy, New York.
--Madoff committed the largest known Ponzi scheme in U.S. history, a $65 billion ruse. In 2009, he received the maximum possible sentence of 150 years from a judge who called the financier's crimes "extraordinarily evil." Court documents placed Madoff and his wife Ruth's net worth at more than $820 million, including properties in Palm Beach, Florida, Antibes, France and Montauk. Madoff is serving his term at a federal prison in Butner, North Carolina.
--Milken, the so-called king of junk bonds, received a 10-year prison sentence in November 1990 after pleading guilty to securities violations. He served less than two years behind bars after a federal judge cut his sentence to reward him for his cooperation with authorities. Milken paid about $900 million to settle civil charges in 1992 -- leaving him, it was estimated, with about $125 million. In 2007, Forbes magazine reported Milken had a net worth of $2 billion.
--Nacchio, the former CEO of Qwest Communications, was convicted in 2007 of 19 counts of insider trading. Among other offenses, he sold $52 million in Qwest stock. Nacchio was sentenced to six years in prison, later reduced by two months. The judge also ordered Nacchio to forfeit $44.6 million and pay a $19 million fine. At trial, prosecutors told jurors that Nacchio's net worth was more than $500 million. He is serving out his sentence at a facility in Lewisburg, Pennsylvania.
--The former Enron executive was convicted in 2006 of 19 counts of conspiracy, fraud and insider trading, and sentenced to 24 years in prison. His net worth at the time was estimated at $55 million, and a federal judge ordered him to forfeit $45 million. According to the New York Times, Skilling owed $30 million in legal fees at sentencing. Despite a continuing appeals process, Skilling remains in prison in Colorado.
--The doyenne of homemaking was convicted in 2004 of lying to federal agents about selling stock in biotechnology company ImClone Inc. The timing of the sale netted Stewart savings of about $40,000. She served five months in prison in West Virginia. She is still involved with the media company she founded and recently released a book about baking pies. In 2007 Forbes estimated she had a personal fortune of about $650 million.
(Reporting by Carlyn Kolker and Erin Geiger Smith)