Prosecutors say former stock swindler is hiding profits from book and movie deals
By Tom Hays
Associated Press
NEW YORK (AP) — Jordan Belfort insists he’s a changed man.
The old Belfort was a notorious stock swindler who squandered profits from a boiler-room, “pump and dump” scheme on cocaine, prostitutes and other excesses — a story that became the basis for two memoirs and “The Wolf of Wall Street,” an upcoming movie starring Leonardo DeCaprio.
The new Belfort is a business consultant who claims he would never tell a lie and frets over recent suggestions that he may be avoiding payments on $110 million in restitution by hiding his profits from the book and movie deals.
“It’s very strange being accused of something I wouldn’t have done in a million years,” the 51-year Belfort said. “It’s so not where my head is at.”
In early October, prosecutors asked a federal judge in Brooklyn to find Belfort in default, saying he paid only $11.6 million of the $110 million he owes as restitution for a securities fraud and money laundering conviction. They have since withdrawn the request to see if a settlement can be worked out — but not before a wave of bad press portraying Belfort as a deadbeat.
“In some weird way, it probably helps the movie,” he said in a recent phone interview. “It doesn’t help me.”
The film — directed by Martin Scorsese and set for release on Christmas Day — chronicles the boyish, fast-talking Belfort’s antics as chairman of Stratton Oakmont Inc., the firm he started with a few desks and phones set up in a former Long Island auto shop.
“Leo’s amazing, a brilliant actor,” Belfort said. “I spent hundreds of hours with him. And Marty’s brilliant too.”
Stratton Oakmont made a fortune by using deceptive, high-pressure tactics to peddle penny stocks at inflated prices. After artificially pumping the value up, Belfort and others would dump their own shares before prices crashed.
Belfort and his cronies ended up making more cash than they knew what to do with: A movie trailer shows a smirking DiCaprio crumpling up $100 bills and throwing them in a waste basket. He spent part of his ill-gotten gains on a 166-foot yacht — which sank — and a $175,000 sports car.
Looking back, he says becoming rich by deceit wasn’t worth it.
“Fraud is not something you want to be good at,” he said. “I was always taking great efforts to cover my tracks. It was unbelievably exhausting, keeping track of all the lies. ... I think that’s why I lived so recklessly. You’re doing things that you know can’t go on indefinitely. It fuels that insane lifestyle.”
Belfort pleaded guilty in 1999 and agreed to become a government witness in a case against an accountant and other stock fraud defendants accused of cooking the firm’s books and funneling money into a bogus holding company and overseas bank accounts.
In 2003, after a broken marriage and a bout with drug addiction, Belfort was sentenced to 3-1/2 years behind bars and ordered to chip away at the $110 million restitution by giving 50 percent of his future earnings to the government. Book sales resulted in payments of about $700,000 from 2007 to 2009, court papers say.
But after completing probation in 2010, prosecutors claim Belfort’s payments have slowed to a trickle — even after he made $940,500 off the sale of the “Wolf” movie rights and continued to capitalize on his notoriety as a motivational speaker and business consultant. Under those circumstances, it’s not surprising that the government went on the offensive, said Marcos Jimenez, a former federal prosecutor now in private practice in Miami.
“I think it’s a little bit in-your-face when you write books and help make movies about your crimes, especially when the crimes are why you owe restitution,” Jimenez said.
In the interview, Belfort said he now can make tens of thousands of dollars for speaking engagements and other services. His website boasts that he’s developed a system to “take virtually any company or individual ... and empower them to create massive wealth, abundance and entrepreneurial success, without sacrificing integrity or ethics,” and features testimonials of heads of telecommunications and real estate companies in Australia.
“Jordan is no longer a criminal,” his fiance, Anne Koppe, wrote in a recent letter to the judge. “He is an exemplary contributor to the economy. He is a taxpayer and a very hard-working man.”
As to his current problems with the law, Belfort’s lawyers have argued that his obligation to pay half his earnings ended when he went off probation. Still, he claims he’s repeatedly offered to pay 100 percent of his book and movie profits and to negotiate a settlement on restitution, only to be met with silence.
“There’s so much distrust,” Belfort said of the prosecutors. “Most people lie to them. I don’t want to make any money from the books or the movie. I don’t think they could fathom that.”
Someone like Belfort bemoaning a lack of trust is outrageous, said Dianne Nygaard, a Kansas City, Mo., lawyer who once represented some of his victims. She recalled that one of her clients, after being duped by a cold call from Stratton Oakmont, sold the family farm so he could invest.
“No one should consider him trustworthy,” Nygaard said of Belfort. “He is the consummate con man, winning the confidence of the naive, the trusting and the greedy by calculatedly selling people what they wanted to believe.”
In a letter dated Oct. 25, prosecutors told the judge they’re reviewing documents turned over by Belfort before the case returns to court later this month. He’s hoping for a quick resolution so he can move on.
“I just want to finally close out that chapter of my life,” he said.
