Curmudgeon's Corner

October 01, 2002

Watching the recent parade of corporate execs hauled in by the Feds, one would think that the sheer size of their alleged chicaneries puts these guys, if convicted, into the record books as America's biggest crooks. A little historical perspective on 20th-Century white-collar felons, however, allows us to accurately size up the current crop of alleged scamsters.

Charles Ponzi's illusory pyramid scheme in 1920 lightened investors' pockets by $2 million. Inflated to present-day value, the scheme ripped off the equivalent of $17.9 million. Ponzi eventually served a five-year stretch in the clink, giving him a reading of 3.6 on the Felons Index. How so? Divide the inflated losses, in millions of dollars, by the number of years served in prison. A higher take or less time served equals a higher index ranking, meaning a more heinously successful crook.

In 1938, Big Board president Richard Whitney's sticky fingers relieved the New York Stock Exchange Gratuity Fund, the New York Yacht Club and his wife's trust account of a shade under $1 million to buttress his flagging business. Adjusted for present-day dollars, his three-year stint in the Stony Lonesome earns him a 3.8 index tick.

Tino De Angelis' 1963 snookering of $200 million from banks and brokerages crowned him the 'salad oil king' and also won him a seven-year prison term. Tino earns an inflation-adjusted 166.9 mark for his work.

Bernie Cornfeld raised over $2.5 billion, mostly from U.S. ex-pats and military personnel before the chickens came home to roost in 1970. Cornfeld's run for the booty stuck investors with losses of $500 million. The cost to Bernie was only 11 months in a Swiss slammer, giving him a whopping 2,558.5 score.

By 1973, Equity Funding Corp.'s package of mutual funds and insurance wasn't raking in the bucks president Stanley Goldblum wanted, so his minions took to fraudulently goosing earnings. When the swindle collapsed, investors lost $300 million and Goldblum won eight years in the pokey. Give Stanley a 670.8 mark.

The exploits of Ivan Boesky and Michael Milken killed Drexel Burnham Lambert in 1986, costing Boesky 22 months in prison and $100 million in fines, an amount said to equal his ill-gotten gains. Milken earned a three-year sabbatical in the calaboose plus $1 billion in fines. Score 32.6 for Boesky and 543.5 for Milken.

By 1988 teen-aged prodigy Barry Minkow had turned nothing into, well, nothing. Minkow kept his ZZZZ Best carpet-cleaning outfit propped up with bogus insurance contract revenue. When the sham unraveled, shareholders and creditors were left holding a $100 million carpetbag. Minkow, paroled after serving five years, clocks in with a 30.2 reading.

'Taxes are for the little people,' Leona Helmsley said. In 1989, the 'queen of mean' got notably smaller when her scheme to bill home refurbishing costs as business expenses earned her a $1.7 million dunning from the IRS and 18 months in jail. Leona comes in with a paltry 1.6 index value.

Now, about those new guys...

Messieurs Sullivan's and Myers' alleged $7.1 billion scam at WorldCom indexes them at 109.2 if they get slapped with presently threatened 65-year terms. If they only do a nickel in Greystone, as some experts predict, they'd jump to the second slot with a 1,420.0 score.

For booking $3.8 billion in off-balance-sheet loans at Adelphia, a possible 100-year visit to the slam by John Rigas et fils yields a 38.0, winning the number five ranking. They crank their index value to 760.0 for five-year jail stretches.

And ImClone's Sam Waksal? For saving his family $8.6 million (as of this writing), Sam is chump change. He rates a potential 0.7 index value if he does 12 1 /2 years, and 1.7 for a five-year spell.

So, while these new players may be accused of filching huge sums of shareholder lucre, their index numbers aren't very strong. Toppling Bernie Cornfeld from his pedestal at the acme of swindle plainly requires a better class of criminals.

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