But believe it or not, these stories can leave you with great teachings; especially if you are an entrepreneur or business owner.
From millionaires to bankruptcy
The experiences of millionaires who lost everything show us that life can change in the blink of an eye.
They also reveal that financial crises, as well as poor personal decisions, have the potential to destroy even the most robust fortunes.
Below you will learn the story of the billionaires who went from living in opulence to being investigated, tried, imprisoned, and declared bankrupt:
1. Bernie Madoff
During his greatest peak of popularity, wealth, and success, Bernie Madoff chaired the Nasdaq Stock Exchange. Back then, he never imagined that he would spend the last days of his life in jail.
Bernie Madoff tops the list of millionaires who lost everything for running the biggest Ponzi scheme in history.
What does this scheme consist of? It consists of a fraudulent investment operation that pays profits to old investors with the funds of newly raised investors (instead of generating real profits).
According to a New York Times report, Ponzi schemes lure investors with a seemingly irresistible promise.
They are usually promised an unusually high return, thanks to the “investment manager being overqualified”.
Bernie Madoff, who was working as a well-known Manhattan investment adviser, took advantage of his success and “credibility” to commit a scam worth billions of dollars.
His pyramid scheme collapsed during the Great Recession of 2008 due to two big factors: he stopped attracting new investors and most of the ones he already had wanted to redeem their savings.
The reality was that Madoff’s system was underfunded and this led to an imminent collapse that affected many ordinary citizens and even major celebrities such as Steven Spielberg.
Although Madoff was sentenced to 150 years in prison in 2009, he died in April 2021 of natural causes.
2. Aubrey McClendon
McClendon was the co-founder of the oil and gas company, Chesapeake Energy. His net worth was estimated at 1.2 billion dollars, but in 2016 luck stopped smiling at him.
During his prime, Aubrey led America’s energy renaissance and became known worldwide as “one of fracking’s visionaries.”
At 56, he was being investigated for fraud and conspiracy in the purchase of oil and gas reserves.
In addition, it was learned that the Department of Justice of that country accused him of having “allied” with another oil giant to manipulate the price of subsoil drilling concessions.
Just one day after the department announced the lawsuit against him, Aubrey McClendon died in a car accident.
The official investigation of the case showed that at the time of his death his net worth was almost non-existent.
3. Björgólfur Gudmundsson
Gudmundsson is another millionaire who lost everything; after being the second richest man in Iceland.
Most of his fortune was amassed through his participation in the Landsbanki bank. However, this financial entity collapsed in 2008 and was finally absorbed by the Government of that country.
Back then, Forbes reviewed his net worth and found that this renowned businessman had gone from $1.2 billion to penniless.
Gudmundsson was also forced to sell West Ham United Football Club; a Premier League team that belonged to him.
The man who was once known as the second billionaire of this Nordic country had no other way out than to declare bankruptcy.
4. Eike Batista
Eike Batista was one of the most successful millionaires in the world. He served as president of the EBX Group, which housed OGX and many other companies.
This entrepreneur of Brazilian-German origin became known as “the oil baron” and in 2012 his net worth was approximately $30 billion.
However, his success foundered and he began to lose large sums of money after his oil company, OGX, was unable to meet its production goals.
In parallel, its finances were deeply affected by the economic debacle that Brazil was going through.
Finally, in 2017 he was accused of corruption and money laundering, and like other millionaires who lost everything, he had to file for bankruptcy.
5. Sean Quinn
Despite being one of Ireland’s richest businessmen, Sean Quinn did not make it out of the 2008 financial crisis unscathed.
In his greatest years of abundance and success, he held a 25% stake in Anglo Irish Bank and experienced a masterful rise in net worth.
But this changed when the bank was taken over by the Irish government and had to be rescued with taxpayers’ money, due to the financial meltdown of 2008.
This millionaire mind was forced to declare bankruptcy in 2011, and at that time he declared that his assets were less than 50 thousand pounds.
According to Celebrity Net Worth, Sean Quinn’s net worth in 2008 was $6 billion, but by 2012 he had lost it all.
6. Allen Stanford
Stanford is another of the millionaires who lost everything and who inevitably had to face justice.
Like Madoff, he defrauded more than 30,000 investors through Certificates of Deposit with a Ponzi scheme, for which he was sentenced to 110 years in prison.
Specifically, he was accused of carrying out the second-largest pyramid scheme in the United States.
The losses were estimated at 7 billion dollars and the worst part of the case was that none of the swindled received compensation for their loss.
In 2012, Allen Stanford was found guilty of 13 felonies and sentenced to more than a century in prison.
Despite Forbes estimating his fortune at $2.2 billion, he didn’t have a penny left and was eventually jailed.
7. Elizabeth Holmes
During her greatest years of popularity, splendor, and glory, Elizabeth Holmes was one of Silicon Valley’s most prominent stars.
The founder of Theranos, a blood-testing company that promised to revolutionize the medical field, turned out to be one of the biggest con artists in modern history.
In 2015, before she was accused of fraud in the United States, she was named the youngest self-made billionaire by Forbes.
That year, his company was valued at 9 billion dollars, while his net worth was 4.5 billion dollars, according to this prestigious magazine.
Everything collapsed when an FBI investigation revealed that Theranos was a fraudulent company and that Holmes had defrauded important personalities in the country.
Holmes could be sentenced to about 20 years in prison in September 2022, and it should also be noted that in 2016 Forbes updated her assets to zero.
8. Patricia Kluge
Patricia Kluge got 100 million dollars after divorcing John Kluge; a media mogul who is credited with founding the Metromedia company.
After their separation, Patricia bought a vineyard near her property in Virginia to become a successful entrepreneur.
His goal was to produce world-class wines and he certainly achieved it. By the mid-2000s, Kluge Estate Vineyard was worth $75 million.
However, Patricia’s economic situation began to deteriorate after investing huge sums of money in this company.
Everything got worse with the financial crisis of 2008, which forced this successful businesswoman to auction some possessions and all her jewelry to save herself from bankruptcy.
But that was not enough for Patricia. The debts were simply too great and in June 2011 she filed for bankruptcy.
9. Vijay Mally
This liquor tycoon and owner of several airlines savored both the honey of success and the bitterness of great failures.
The former owner of Kingfisher Airlines took out several bank loans in 2012 to boost this company but soon realized that he had no way to pay them off.
Unable to pay his debts, Mallya fled his native country to the UK and remains unextradited.
In any case, he was accused of money laundering and bank fraud and went from having a fortune of 750 million dollars to evading justice in India (his homeland).
10. Mike Tyson
This acclaimed American boxer once had a fortune of 300 million dollars, but in 2003 he had to declare bankruptcy.
But to what was this failure attributed? Tyson is said to have had very extravagant tastes and a strong addiction to drugs.
So that combination bankrupted him, confronted him with million-dollar lawsuits and difficult times, and even shattered his successful career.
Myke Tyson is another of the millionaires who lost everything at some point in their life, due to bad decisions and addictions.
The millionaires who lost everything
These millionaires who lost everything have made something very clear to us: not all stories have happy endings.
Especially when its protagonists act with malice, put the generation of money before legality, or do good deeds.
In short, if you want to start a business, or if you are an entrepreneur, you must act with honesty and transparency so that your company is sustainable and prosperous.
That way you can boost your profits and expand your wealth in a legal, fair and transparent way.