The Most Notorious Corporate Scammers in U.S. History

The recent conviction of Theranos' Elizabeth Holmes, once the wunderkind of Silicon Valley, underscores a grand tradition in U.S. corporate history: the mega scam. Ever since Charles Ponzi swindled millions from investors more than a century ago, there have been shady dealings galore in many a C-suite. Here are some of the most notorious corporate scammers of all time. 

Saundra Latham and Andrew Lisa contributed to this report. 

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In the mid-2010s, Elizabeth Holmes was one of the fastest-rising stars in Silicon Valley, with a net worth of $5 billion and the title of the youngest woman billionaire in the entire world. By 2018, her net worth was zero, and she was under investigation for fraud. Theranos, the company she started when she was just 19, promised to revolutionize the way patients are diagnosed and treated through a new type of blood test. Those tests, however, proved to be wildly inaccurate, and investigative journalism soon revealed a massive web of fraud. She was just convicted on four counts of defrauding investors, and could face up to 20 years in prison. 

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With the exception of Charles Ponzi himself, Bernie Madoff is possibly the most notorious swindler in the history of corporate crime. He died in April while serving a 150-year prison sentence. His $65 billion Ponzi scheme came crashing down in 2008, but it wasn't until April 2009 that federal agents began seizing his yachts and homes in the opening salvo of court-ordered seizures of his sprawling assets.

Allen Stanford is an inmate in a high-security prison in Florida, where he will almost certainly spend the rest of his life after being sentenced to 110 years following 13 felony convictions in 2012. In 2009, federal agents raided his offices, which he used to carry out a certificate-of-deposit-based $8 billion Ponzi scheme, the second-largest in history behind only the fraud perpetrated by Madoff. Although Stanford was ordered to forfeit nearly $6 billion in cash, nearly all of it had been spent, and his victims recovered virtually none of their losses.

Charles Ponzi came to the U.S. from Italy in 1903, seeking to make a fortune and restore his once-well-to-do family's lost glory. He did indeed pocket millions, but at the expense of others. Ponzi famously promised investors returns of 50% in 45 days, which he paid with money collected from newer investors. Ponzi went on to make $20 million through this pyramid scheme, though it eventually collapsed and landed him five years in prison.

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When his carpet-cleaning company ZZZZ Best went public in 1986, Barry Minkow, age 19, became the youngest person to lead a company through an IPO in American financial history. On "The Oprah Winfrey Show," he famously explained his success saying, "Think big — be big. End of story." Unfortunately, ZZZZ Best turned out to be a big scam based on fraudulent documents and bogus sales receipts. By the time it all crashed, Minkow had defrauded investors of $100 million and was sentenced to 25 years in prison. After being released, Minkow was arrested twice, once for stock market manipulation, and later for cheating the San Diego Community Bible Church out of $3 million.

Before Bernard L. Madoff Investment Securities, there was Bernard Ebbers and WorldCom. Under Ebbers' leadership, WorldCom grew to be the second-largest telecom company in the United States by gobbling up smaller companies. All the buying left the company in serious debt, though. Ebbers' response was to exaggerate company assets to the tune of $11 billion. When the company collapsed, about 1 million WorldCom investors lost $100 billion. Ebbers was convicted of fraud and conspiracy and sentenced in 2005 to 25 years behind bars. He died in early 2020, a month after being released from prison because of health issues. 

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Sam Israel's escapades include providing fake accounting reports to investors, attempting a fake suicide to avoid prison, and later being the subject of an episode of "America's Most Wanted." It started with the creation in 1996 of Bayou Hedge Fund Group, where Israel was CEO. The company raised $450 million from its investors, which Israel used to live lavishly. In 1998, when the company had poor returns, he even created a fake accounting firm to audit Bayou Hedge Fund Group and make it appear as if investors' money was growing. In the end, $450 million was stolen, and Israel was sentenced to 22 years in prison.

The son of a New York City longshoreman and bartender, Joseph Nacchio amassed his ill-gotten gains selling stocks he knew would plummet. The former CEO of Qwest Communications International earned $52 million from his $3 billion financial fraud scheme. Ultimately, Nacchio was found guilty of 19 counts of insider trading and ordered to return the $52 million. He was also required to pay $19 million in fines and was sentenced to six years in prison, but only served four.

At its height, Enron claimed revenue of nearly $101 billion, employed 20,000 people, and was the seventh-largest company in America. For six years running, it was named "America's Most Innovative Company" by Fortune. But much of that innovation was focused on institutionalized accounting fraud under the leadership of founder Kenneth Lay and CEO Jeffrey Skilling. In the end, investors lost $74 billion. Lay was indicted on 11 counts of security fraud and died while awaiting sentencing; Skilling was required to pay a $45 million fine and was released after serving 12 years in prison.

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The mastermind behind yet another pyramid scheme used to fund a luxurious lifestyle, James Paul Lewis Jr. is famous for running one of the largest and longest such scams in U.S. history. Over two decades, Lewis collected about $311 million from his Financial Advisory Consultants investors and promised high returns. He even went so far as to pay false dividends to make his investors think everything was on the up and up. Instead, that money was being used by Lewis to buy big homes and fancy cars. When Lewis eventually stopped paying dividends, investors became suspicious. He was arrested in 2004 after a police hunt and sentenced to 30 years in prison. Lewis was also required to pay $156 million in restitution.

Jordan Belfort's rise and fall was chronicled in "The Wolf of Wall Street," the film directed by Martin Scorsese, starring Leonardo DiCaprio as Belfort. A former door-to-door meat and food salesman who went on to create the investment firm Stratton Oakmont, Belfort sold worthless stocks to unsuspecting investors. Brokers at his firm would drive up the prices of stocks that Belfort and partners would cash out of, leading the stocks to collapse. Belfort was indicted for securities fraud and money laundering. He was sentenced to 22 months in jail and ordered to pay $100 million in restitution to the 1,513 clients he defrauded.

On paper, Centennial Technologies sold PC memory cards. In reality, the company was delivering ... fruit baskets? As bizarre as that may seem, there's more. The company's employees developed fake documents designed to appear as if they were recording sales. Emanuel Pinez and other company executives were cooking the books, even creating a phony list of receivables. Amid it all, the company's stock rose 451% as between 1994 and 1996 the company overstated its earnings by $40 million. The reality was far different: The company lost about $28 million. Ultimately, more than 20,000 investors lost almost all of their money. Pinez was sentenced to five years in prison and ordered to pay $15 million in restitution.

The "CEO of fraud" is how one judge described Richard Scrushy, who during the 1990s required HealthSouth employees to falsify earnings reports. Scrushy told employees to inflate revenues and overstate net income for the company, which at the time was one of the largest for-profit health-care service providers in America. By 2003, the government had caught on, with the Securities and Exchange Commission revealing that HealthSouth had falsely reported $1.4 billion in revenue. What's more, HealthSouth CFO William Owens had been working with the FBI and captured Scrushy on tape admitting to fraud. The company's stock dropped from nearly $20 in just one day, to 45 cents. After being acquitted of fraud, Scrushy was later convicted of money laundering, extortion, obstruction of justice, racketeering, and bribery. He was also ordered to pay $2.9 billion.