Some of the most famous billionaires at some point in their lives declared bankruptcy. Someone went bankrupt himself, someone had a not-so-successful business. Many factors contributed to the fact that these rich people lost everything - economic downturns, bad investments and even massive cases of fraud that brought them to this point. At the same time, some managed to become rich again, while others could not even come close to the wealth that they previously owned. Here are 10 of the most famous billionaires who went broke or declared bankruptcy, and the story of their fall from the top.
Patricia Kluge
This woman invested most of her money in her own vineyard. However, when the real estate market collapsed, she lost everything - and she even had to sell her jewelry and works of art at auction.
Before, Patricia was the epitome of high society — until she lost all of this during the 2008 housing crisis. The model met her second husband, John Kluge, during a trip to New York. In 1981, John married Patricia. Nine years later, the couple divorced, Patricia received a substantial maintenance - one million dollars a year, plus an extensive estate. Located in a rural area close to the property of Thomas Jefferson Monticchiello, this estate first led to growth and then to collapse!
Intending to turn her property into a profitable business, Kluge opened the Kluge Estate winery and a vineyard not far from the estate with her third husband William Moses. She saw her wines decorate the tables of socialites and noble people across the country, and this brought her little success. Kluge wines were even served at Chelsea Clinton's wedding!
Nevertheless, after a series of unsuccessful investments and an infusion of money into real estate right before the housing market collapsed, the woman lost it all. In 2011, the winery was bought by Donald Trump. Kluge auctioned all of her jewelry and other treasures to save herself from bankruptcy. This did not work - Patricia filed for bankruptcy in June 2011.
Vijay Mallya
Airline founder and alcohol mogul Vijay Mallya lost most of his fortune after defaulting on bank loans and fleeing to the UK. He is currently in the process of extraditing back to India on charges of fraud and money laundering.
Former billionaire Vijay Mallya was a famous alcohol tycoon, he was famous for his extravagant parties and lifestyle. He also owned the now defunct Indian Kingfisher Airlines. Only in 2012 it became clear that Mallya accumulated numerous debts to banks, trying to keep his business afloat.
When he defaulted on payments, he was looked for by Indian banks, from which he borrowed money. Using the diplomatic passport that he received, becoming a member of the upper house of the Indian Parliament, he fled from India to the UK. Mallya has not returned to India, although the government and banks are trying to prosecute.
Today, the businessman is accused of bank fraud and money laundering in the amount of about 90 billion rupees, which is approximately 1.3 billion dollars.
Sean Quinn
Once he was the richest man in Ireland, and after losing everything. Quinn lost most of his fortune, $ 2.8 billion, due to not-so-good investments in an Irish bank. In November 2011, Quinn claimed that his assets were less than 50,000 euros, and therefore he had to file for bankruptcy.
Sean Quinn has achieved great success thanks to his investments in industries such as plastic, glass and hotels. He also owned a 25% stake in Anglo Irish Bank, which was supposed to be saved by taxpayers during the 2008 financial crisis. The bank was transferred to the government, and thus began a series of legal problems between the Quinn family and the bank.
Once considered the richest man in Ireland, Quinn lost much of his fortune. At some point, the Irish Resolution Corp. Bank, which took over Anglo Irish Bank, said Quinn owed more than two billion euros to the financial institution.
Shortly afterwards, the man was charged with contempt of court for trying to hide his property assets from a bank in order to avoid paying off his debts.
Joslyn Wildenstein
New York tabloids have repeatedly called Jocelyn a "catwoman" - for her "cat" appearance. According to rumors, she spent about a million dollars a month on purchases and 5,000 dollars a month on a telephone bill. In May 2018, a secular lioness declared complete bankruptcy.
The socialite and the ex-wife of the late billionaire, art dealer Alec Wildenstein, filed a federal defense against bankruptcy. In a statement, she said that her monthly income is $ 0 and that she survived $ 900 in social benefits and thanks to help from her friends and family. Most of her financial problems, she said, are connected with the wrong divorce proceedings.
Bernard Madoff (main photo)
This man holds the notorious title of leader in the largest US history of the Ponzi scheme. The losses of its investors amounted to about 65 billion dollars and went unnoticed for decades! In 2008, Madoff was charged with 11 charges of fraud, money laundering, perjury and theft. He received the maximum sentence.
How did he manage to do this for so long? Bernard Madoff seemed trustworthy — he founded his Wall Street firm, Bernard L. Madoff Investment Securities LLC, in 1960 and served as chairman of Nasdaq. His gigantic scheme began to spin up after investors requested a total of $ 7 billion in profit. According to a previous Business Insider report, at that time he only had between $ 200 and $ 300 million.
Bernard Madoff was sentenced to 150 years in federal prison. Before heading to prison, he abandoned most of his assets. In exchange for giving most of his wealth (an estimated $ 80 million for mansions, jewelry, cars, and art), his wife, Ruth Madoff, was given $ 2.5 million. Since then, she has moved to Old Greenwich, Connecticut.
Elizabeth Holmes
She was once the star of Silicon Valley. Her blood testing company, Theranos, was valued at $ 9 billion. However, it soon became clear that blood tests were extremely inaccurate. Elizabeth was accused of fraud in June 2018 - and now she is bankrupt.
Theranos project attracted attention in the early 2000s. The company promised simply revolutionary methods of testing and treating patients for various diseases. By the end of 2004, the company had raised about $ 6 million from private investors. The Medicare and Medicaid Services Centers reviewed the company, but were told that the project was still in development.
In 2016, the CMS concluded that Theranos poses a risk to patient safety. After several lawsuits, layoffs and a federal allegation that Holmes carried out mass fraud, Theranos closed. This happened in September 2018. Holmes and her partner were accused of electronic fraud.
Borgolfur Gudmundsson
Borgolfur Gudmundsson was once the second richest man in Iceland and a major member of the Icelandic bank Landsbanki. After the bankruptcy of the bank in October 2008, Forbes revised the net worth of Gudmundsson's fortune from $ 1.2 billion to $ 0. The billionaire filed for bankruptcy.
A resident of Iceland made a fortune in the brewing industry. He also owned a football team in the UK. However, in 2009, the man who was once the second richest man in Iceland filed for bankruptcy. And this statement covered a huge debt of $ 759 million. At that time, it was the largest bankruptcy in Icelandic history.
The main reason for the fall is a sharp decline in the Icelandic economy during the recession. Borgolfur Gudmundsson and his son were major shareholders of the Icelandic bank Landsbanki, which went bankrupt in October 2008. His son also left the Forbes list. Nevertheless, he has since received back most of his wealth. Financial experts called it a crazy comeback.
Eike Batista
Brazil's richest man, Eike Batista, lost most of his wealth when his oil company OGX went bankrupt in 2013.
According to the BBC, the billionaire was widely known for his generous lifestyle and became an inspiration for Brazilian youth. In 2012, his fortune was estimated at $ 30 billion, making him the seventh richest man in the world.
But when in 2013 the oil company was not able to meet demand, and the Brazilian economy fell, Batista was forced to file for bankruptcy. As the authorities launched an investigation into the activities of leading Brazilian companies, they accused the man of money laundering and corruption in January 2017. In July 2018, he was sentenced to 30 years in prison for bribing the former governor of Rio de Janeiro.
Allen Stanford
Today, Allen is serving time in federal prison for launching the second largest Ponzi scheme in US history. The plan culminated in investor losses totaling $ 7 billion. Many Stanford victims still have to return the money they lost. Allen has tricked more than 18,000 customers!
Stanford's crimes began after his Texas fitness club went bankrupt; then he turned to offshore banking and began to act according to his scheme. According to CNBC, many of Stanford’s victims were retirees who were promised “safe investments,” which made this case of investor fraud even more vile.
When the Securities and Exchange Commission raided the Stanford Financial Group headquarters in Houston on February 17, 2009, they accused the tycoon and his partners of massive ongoing fraud. Stanford was convicted of 13 felonies in 2012 and is serving a 110-year sentence in a maximum security prison in Florida.
Donald Trump
The current US president never filed for bankruptcy in person, but six of his companies filed for bankruptcy.
Thus, the Taj Mahal casino in Atlantic City declared bankruptcy in 1991 after the default on interest payments to bondholders. Two other Trump casinos also filed for bankruptcy - along with the Plaza Hotel in New York.
Journalists also discovered two previously unknown bankruptcies filed by Trump - Trump Hotels and Casinos Resorts in 2004 and Trump Entertainment Resorts in 2009.
However, Trump does not seem to be worried about his bankruptcy story. In 2016, Trump was asked at the presidential debate why he could be trusted to rule the country after a series of bankruptcies. He replied that he simply used the laws of this country - just like other businessmen.