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10 Billionaires Who Are Now Broke

Though billionaire status is becoming increasingly common, it’s hard to imagine amassing such a prodigious fortune over the course of a human lifetime. Most individuals who have the skill or luck to stockpile this much money manage to invest it wisely and build generational wealth. But others don’t have the business acumen to maintain their fortunes. Today, we’re looking at billionaires who lost it all.

Allen Stanford

Allen Stanford is a Texas native who ran the second biggest Ponzi scheme of all time. Though he made off with an absolutely incredible sum of money, he was discovered a mere two months after Bernie Madoff and thus did not make the same headlines. But unlike the victims of Bernie Madoff, who have gotten back large chunks of their principal, the 18000 customers of Stanford have recovered practically nothing.

In total, he stole more than eight billion dollars and remained unchallenged because he donated millions of dollars to politicians in both the United States and the Caribbean. Initially, judges ruled that insurance companies were liable to pay $65 million to the victims of this terrible scheme, but in the end, they voided this ruling.

After the S.E.C. raided Stanford’s offices in 2009, his business empire was essentially shut down. While Stanford claimed the accounts were backed by solid assets and posted returns that consistently beat the market, the S.E.C. alleged the entire operation was a fraud that financed Stanford’s lavish lifestyle. He’s now serving a one hundred and ten year sentence for his misdeeds.

But the bottom line is that his victims, many of them elderly retirees, will never see a penny of their money back.

Bjorgolfur Gudmundsson

Bjorgolfur Gudmundsson was once Iceland’s richest man. He became Iceland’s second billionaire after his own son. He was at one time the majority owner and chairman of the now nationalized Icelandic bank Landsbankinn, the second largest company in Iceland. He was ranked by Forbes magazine in March 2008 as the 1014 richest person in the world with a net worth of $1.1 billion.

In the 1990s, he was sentenced to 12 months in prison and suspended for two years for bookkeeping offenses, having faced around 450 charges. He went to Russia, remade his fortune and returned to Iceland, where he also had interest in shipping, publishing, food, communications and property. Fast forward to 2009, when he was 759,000,000 million dollars in debt.

It was the largest bankruptcy filing in Icelandic history. Essentially, Landsbankinn was hit by the credit crunch that roiled the financial industry in 2009 and Gudmundsson lost everything. Although they were both implicated in the Panama Papers, his son is still a billionaire.

Patricia Kluge

It reads almost like a cliche movie plot. The sad tale goes like this. A beautiful young woman marries a billionaire, divorces and uses her hefty settlement to strike out into a celebrated business, only to lose it all. Rather than a contrived film plot, this is the real life story of Patricia Kluge, her former husband, John Kluge, was a legendary businessman who at one point was the richest man in the world.

Born in Chemnitz,Germany, he eventually became a media mogul and made a huge $4 billion fortune in 1986 after selling his production company to 20th Century Fox. Patricia Kluge married the billionaire John Kluge, 34 years her senior, in 1981. There jetsetting life became a myth among the ultra rich. And when Clews divorced her in 1990, she walked away with $1 billion and their family home.

Kluge’s plan was to use their Virginia estate as a vineyard and establish the area as the California of the East Coast. She took out millions of dollars of loans to accomplish this. And obviously Virginia did not become the epicenter of fine wines. Deeply in debt, Kluge sold her winery to future president Donald Trump. He still owns the property and allowed Kluge to work there for one year before firing her.

Sean Quinn

As of 2008, Sean Quinn was the richest man in Ireland with a wealth of roughly five billion dollars. Only three years later, he was filing for bankruptcy. When he was only 14 years old, he dropped out of school in order to borrow one hundred pounds and sell gravel. This eventually became a massive conglomerate with arms and construction, banking and health care.

Quinn became a legend for Irish people during the 90s when he allegedly punched a British soldier who tried to detain him at a checkpoint. This goodwill served him when he lost the entirety of his fortune on bad banking investments. In the end, he served a small period of jail time and was released for good behavior.

He still doesn’t have another business empire, but he continues to try and attract lucrative investments. He was recently in the news because gangsters beat the director of his company and claim that Quinn was threatening the conglomerate to allow him back on the board. Quinn vehemently denies these claims, but it’s clear that he has fallen from grace.

Alberto Vilar

Alberto Vilar is another billionaire who led a life of crime. He made his fortune investing in tech stocks. But in 2008, he was convicted of money laundering. For Mr. Vilar, who lived in a luxury apartment with marble floors and a large bronze statue of Mozart, the fall from grace was swift. He was a legendary arts patron and had a particular penchant for opera.

But after the revelation that he had defrauded thousands of people, the arts community responded with a unified front. The Met took his name off its grand tier, the Royal Opera House at Covent Garden in London remove Vilar from its laurel Hall, and the Salzburg Festival took his picture out of its programs. Finally, a judge sentenced him to nine years in prison for his role in a $22 million fraud scheme.

But now he is a free man. His first act after his release from prison was to buy tickets to an opera at the Met. Though he remains an extremely controversial figure, it’s clear that the septuagenarian will not make his billions back anytime soon.

Jocelyn Wildenstein

Nicknamed Catwoman for the results of her unbelievably unflattering plastic surgery, Jocelyn Wildenstein is an American socialite who made her billions by marrying Rich. She was born in Lausanne, Switzerland, in 1940 and was introduced to Alec N. Wildenstein by Saudi arms dealer Adnan Khashoggi at a shooting weekend at his ranch in Africa.

The two were married when they were both in their 30s. Wildenstein was a horse breeder and art dealer with a network of over $10 billion. When they split in 1999, she walked away with $2.5 billion in her divorce settlement and $100 million each year for the following 13 years. But her lavish lifestyle took its toll and the sad divorcee filed for bankruptcy in 2018.

Elizabeth Holmes

Elizabeth Holmes dropped out of Stanford University at 19 to start blood testing startup Theranos and grew the company to a valuation of $9 billion. They claimed to have revolutionized the blood testing industry, but it all came crashing down when the shortcomings and inaccuracies of the company’s technology were exposed, and Theranos and Holmes were charged with massive fraud.

The decline of Theranos began in 2015, when a series of journalistic and regulatory investigations revealed doubts about the company’s technology claims and whether Holmes had misled investors and the government. In 2018, the SEC charged Theranos and Holmes with deceiving investors by massive fraud through false or exaggerated claims about the accuracy of her blood testing technology.

Holmes settled the charges by paying a $500000 fine, returning shares to the company, relinquishing her voting control of Theranos and being barred from serving as an officer or director of a public company for 10 years. After making Forbes list in 2014, Holmes has been embroiled in a legal scandal the following years and can’t even afford to pay her lawyers. This has been a spectacular fall from grace.

Vijay Mallya

Vijay Mallya is a former liquor baron who made his fortune with United Spirits, the largest spirits company in India, and continues to serve as chairman of United Breweries Group, an Indian conglomerate with interests including beverages, aviation infrastructure, real estate and fertilizer. He has been the chairman of Sanofi India and the chairman of Bayer CropScience in India for over 20 years and the chairman of several other companies.

His father actually founded these businesses, which Mallya inherited when he was 28 years old. Since then, the group has grown into a multinational conglomerate of over 60 companies with an annual turnover, which increased by 64 percent over 15 years to 11 billion dollars in 1998. But as with most individuals on this list, Mallya made one bad investment that taint his entire fortune.

Kingfisher Airlines went down in 2013 and had $1.5 billion in bad loans connected with the Indian air carrier. Mallya was recently convicted as a willful defaulter and is fighting extradition in London at the moment.

Eike Batista

Eike Bataistadurante depoimento na Comissão Parlamentar de Inquérito (CPI) do Banco Nacional de Desenvolvimento Econômico e Social (BNDES), onde criticou a atuação do banco de fomento e do governo na condução dos projetos para a criação de estaleiros. Brasilia, 29-11-17. Sérgio Lima/PODER 360

Eike Batista was once Brazil’s richest man, but he lost his fortune in monumental fashion. Batista’s meteoric rise and fall mirrored the recent fortunes of Brazil, where a commodities boom faded as his energy, mineral and logistics empire fell apart earlier this decade. His swashbuckling attitude and confident forecasts of a prolonged golden era for Brazil evaporated as Latin America’s largest economy suffered its worst recession on record.

In early 2012, Batista had a net worth of $35 billion, ranking him the seventh wealthiest person in the world. By July 2013, his wealth had plummeted to $200 million due to his debts and his company’s falling stock prices. Bloomberg reported in January 2014 that Batista has a negative net worth.

He was convicted for paying 16.6 million dollars to get government contracts as part of a sprawling corruption probe known as Carwash and sentenced to 30 years, which he is serving under house arrest. But earlier this year, he was also sentenced to seven years of prison for insider trading, adding to his already hefty prison time.

Bernie Madoff

Here is a billionaire whom you probably recognize. Bernie Madoff became the face of the 2008 financial meltdown when it became clear that he was responsible for the single largest Ponzi scheme in world history. Madoff founded a penny stock brokerage in 1960, which eventually grew into Bernard L. Madoff investment securities.

He served as its chairman until his arrest on December 11th, 2008. Despite claiming to generate large, steady returns through an investing strategy called split strike conversion, which is an actual trading strategy, Madoff simply deposited client funds into a single bank account that he used to pay existing clients who wanted to cash out.

In total, he smuggled more than $64 billion dollars away in order to pay for his own lavish lifestyle. On June 29, 2009, he was sentenced to 150 years in prison with restitution of $170 billion. Though some of this money has been reclaimed and distributed amongst his victims, the vast majority of this wealth will never be returned.

Almost 5000 individuals lost their savings in this scheme and they were not able to retire comfortably as a result. Madoff recently asked President Trump to commute his sentence, proving he still has no signs of remorse in prison.

Adolf Merckle

Adolf Merckle was born in Dresden, Germany, and over the course of his lifetime became one of the wealthiest people in his home country. He developed his bohemian grandfather’s chemical wholesale company into Germany’s largest pharmaceutical wholesaler, Phoenix Pharma Handle. In the early 1970s, he founded Germany’s first generic drug manufacturer, Ratiopharm.

For several decades, he also held large parts of cement company Heidelberg Cement, as well as vehicle manufacturer Kasbohrer. In 2007, he was worth 12.8 billion dollars, according to Forbes. But Merckel never had an appetite for the finer things. He lived so modestly that he cycled to work on a 15 year old bike for most of the year.

And in bad weather, he drove a four year old VW Golf. He had no bodyguards or servants, lived in an unimposing, chalet style house in a small town of Blubbery, his home for the past 60 years, without so much as a CCTV camera for protection and stopped off at his local pub on the way home each night to share a drink with the regulars.

But just like most other billionaires on this list, Merckel lost a fortune during the 2008 economic downturn. This was accompanied by a poor investment in Volkswagen. In the end, Merckel caved to the external pressure and took his own life.

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Written by Wolfgang Mayer

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