AppId is over the quota
US attorneys’ offices had a record-setting year collecting money for damages from civil and criminal cases in 2012, taking in a total $13.1 billion in criminal and civil actions, according to a recently released report. Last year the offices confiscated $6.5 billion, not even half as much.
The US Attorney’s Office for the Southern District of New York, which covers Manhattan, alone reported a haul of $2.98 billion in forfeitures, the largest amount since the Department of Justice Assets Forfeiture Fund launched in 1984. Plus, the office acquired $526.7 million from civil actions and $76.8 million in restitution, fines, and special assessments. (A large portion of this massive amount came from the settlements related to the Bernie Madoff Ponzi scheme.)
[Also see: Inside Five of the Most Pervasive Investment Scams .]
It should come as no surprise that the district containing Wall Street saw the largest catch. Since the financial crash in 2007, US attorneys from southern New York have handled some of the largest asset forfeitures ever, and have prosecuted a high volume of white-collar crimes in the world’s financial capital. (View the Department of Justice’s statistics here.)
Below are a list of other high-profile pathological liars, kleptomaniacs, narcissists, bad businessmen and women, and swindlers from the financial industry and other sectors who made headlines in 2012.
Scott Thompson
Former Yahoo (NASDAQ:YHOO) CEO Steve Thompson wanted his position at the Internet company a little too badly.
Thompson resigned in May of 2012 when a major institutional shareholder of Yahoo called attention to his misrepresentation of his 
college record. Thompson claimed he had a degree in accounting and computer science from Stonehill College in Massachusetts, but activist shareholder Daniel Loeb of the hedge fund Third Point brought to the attention of the Yahoo board that Stonehill College did not offer a degree in computer science until four years after Thompson graduated in 1983. Oops.
Yahoo first responded to the claim, calling it an “inadvertent error” and later released a statement saying it regarded Thompson as a “highly qualified executive with a successful track record leading large consumer technology companies."
During the following week, though, Thompson’s facade crumbled.
Thompson initially attempted to blame the “error” on an alleged mistake printed on his resume by the headhunting firm Heidrick & Struggles when eBay (NYSE:EBAY) hired him for a job. Heidrick caught Thompson lying again, though, and promptly released an internal memo stating that Thompson’s claim was “verifiably not true” within a week of the accusation. Heidrick also notified the Yahoo board that it still had the resume in question in its possession.
In addition to this damning piece of evidence, the struggling Internet company also faced calls for Thompson's removal among executives and engineers in the company.
Amid the pressure, Thompson officially resigned and ended his brief five-month tenure at the company after revealing he had been diagnosed with thyroid cancer. He never admitted to lying, though.
Raj Gupta
You know you’re important in the financial community when the prosecution calls Goldman Sachs (NYSE:GS) CEO Lloyd Blankfein and former Procter & Gamble (NYSE:PG) CEO A.G. Lafley to testify in your case.
In 2008, Raj Gupta, a former Goldman Sachs director, helped some be greedy when others were fearful (to borrow Warren Buffett's famous adage), and the federal government caught him during its crackdown on insider trading following the financial crisis. Amid a collapsing financial system, Warren Buffett had ploughed $5 billion into Goldman Sachs stock. Gupta slipped knowledge of the deal 
to Raj Rajaratnam, the hedge fund manager and founder of the former Galleon Group, whom law authorities also caught using the tips for insider trading. (See also The 10 Corporate Criminals With the Longest Prison Sentences.)
The federal grand jury originally accused Gupta of one count of conspiracy to commit securities fraud and five counts of securities fraud in October of 2011.
Gupta liked playing the role of an information broker, building "friendships and elite business relationships." Prosecutors had a tape of Rajaratnam bragging to associates that he had received insider information, though Rajaratnam did not officially reveal his source of information. The wiretaps helped bolster the circumstantial evidence of phone records, showing that Gupta frequently called Rajaratnam after receiving confidential information.
Federal officials have been using wiretaps since 2009 to help acquire more substantial evidence rather than basing insider-trading cases on purely circumstantial evidence. According to the Wall Street Journal, prosecutors dealing with insider trading saw this win as a big victory because it showed they could successfully prosecute insider-trading cases without the use of wiretaps.
Last June, a federal jury found Gupta guilty of three counts of securities fraud and one count of conspiracy tied to the information shared with Rajaratnam. In the fall, a Manhattan federal judge sentenced Gupta to two years in jail. The prosecutors had called for 10 years.
The lighter sentence may have something to do with a couple of letters the judge received on Gupta's behalf: one from Microsoft (NASDAQ:MSFT) co-founder Bill Gates and another from former UN Secretary General Kofi Annan.
Gupta also had to pay a $5 million fine.
John McAfee
John McAfee’s story has captured so much attention that Warner Bros. has plans to make a movie about it.
Guatemalan officials detained the eccentric founder and former owner of McAfee software for illegally entering the country in December of last year. Up until that point, McAfee’s bigger concern had been evading an investigation into the death of 52-year-old Greg Faull.
Faull and McAfee lived next to each other on the remote northern part of the beautiful island of Ambergris Caye, 36 miles off the coast of Belize mainland. (CNN wrote a good piece describing the McAfee’s millionaire residential compound.) The two had irreconcilable differences, though.
McAfee owned many dogs, which Faull disliked because of their aggressive behavior and loud barking. On November 9, McAfee reported to police that Faull had poisoned his dogs. McAfee then shot his pets in the back of the head to end their misery, according to one his seven girlfriends. Two days later, police found Faull dead in his second floor living room. A gunshot wound to the head had ended his life.
The police understandably wanted to question McAfee about the Faull's death; however, he refused to comply and went into hiding.
From that point, his story grows increasingly bizarre.
McAfee has provided a look into his escapades by regularly writing convoluted posts to his John McAfee blog, which he launched after going on the run. (View it here.) He has also taken his case to the media, appearing on CNBC and Alex Jones’ show InfoWars.
According to his side of the story, the Belizean government has harassed him for not supporting the major political parties and resisting shakedowns. In April of this year, 42 soldiers raided his house for allegedly running a meth lab and owning illegal guns but found nothing illegal. McAfee demanded the prime minister of Belize make an official apology, and this demand apparently insulted the political figure. The government then framed McAfee through Faull's death, according to McAfee.
He has offered $25,000 to anyone who finds the real killer of Faull.
Doubts have been raised, though, because of his odd behavior and unbelievable stories.
His most recent post from January 2 details how he “trained” 29 men and women to become friendly with important government officials, usually by sleeping with them. During his James Bond training work, he says of his spies, “Eight of the women were so accomplished that they ended up living with me.” McAfee had given his targets in the government laptops with invisible keystroke logging software, and the spies supposedly installed software on the computers that gave McAfee access to their documents.
What alleged discovery did this clandestine operation turn up?
In McAfee’s own words, “Belize is clearly the central player in a larger network whose goal is to infiltrate the US with individuals having links to terrorist organizations.”
After another series of plot twists, he has settled in Portland, Oregon, where he hopes to write a graphic novel about his life. You can read the rest of his story here.
Ira Rubin
Ira Rubin dropped his poker face for US District Judge Lewis Kaplan in January of this year when he pleaded guilty to conspiracy charges related to illegal gambling, bank fraud, wire fraud, and money laundering on behalf of three online gaming sites.
Rubin will face three years for helping PokerStars, Full Tilt Poker, and Absolute Poker hide the true nature of their transactions with US poker players from US legal authorities and banks.
What’s wrong with a little Internet poker, you ask?
The Federal government banned banks from processing payments to offshore gaming sites with the Unlawful Internet Gambling Act of 2006. Ireland-based Full Tilt Poker, Isle of Man-based PokerStars, and Costa Rica-based Absolute Poker decided to circumvent the law and concealed billions of dollars in payments from US gamblers with the help of Rubin in addition to the 10 others tied to the scandal.
The Department of Justice also filed a civil suit, and PokerStars agreed to pay $731 million to settle the case.
Rubin helped list the payments as money wired to nonexistent merchants for items such as golf balls, flowers, and jewelry. He also aided in the fabrication of credit card payments.
This con artist has a long history of theft and swindling people out of money, going back to his teenage years when he engaged in petty theft. By the time he began working for the three companies, he had assembled a good resume for wire fraud and working in the black market.
No stranger to prison, he saw jail time on multiple occasions for passing bad checks while running a T-shirt business, for wire fraud for selling collectible cars that he did not possess, and for running a telemarketing scheme.
Judge Kaplan called Rubin an “unreformed con man and fraudster” and said he would likely leave prison “trying to cook up some new scheme that in all likelihood will be illegal.” As a result, Kaplan handed Rubin three years, longer than the 18 to 24 months established in the sentencing guidelines .
The author has a position in Microsoft.
Posts
