Inside The Criminal Past Of Jordan Belfort, The Wolf Of Wall Street
Jordan Belfort was dubbed the Wolf of Wall Street for his less-than-ethical money-making ventures, involving pump-and-dump schemes in the stock market (via Insider). Belfort used numerous techniques that turned out to be quite lucrative, such as the "Kodak pitch." The pitch involved Belfort telling his employees at Stratton Oakmont to convince investors to invest in relatively stable stocks that are almost certain to guarantee a profit — also known as blue-chip stocks (via Investopedia) — before attempting to get the investors to put their money in lesser-known markets, according to Insider.
Belfort and his brokers would heavily inflate these lesser-known and more volatile markets by purposely telling their investors false and unsound claims, before selling all of their shares in the markets and making a considerable profit, according to the Crime Museum. Stratton Oakmont, Jordan Belfort, and his allies would all face investigations for illegal acts like money laundering, market manipulation, and securities fraud, giving Belfort a reputation as a ruthless investor who did whatever was necessary to become rich.
The early life of Jordan Belfort
Born in New York City in 1962, Jordan Belfort was raised in the Queens district by two accountants, according to Insider. He originally planned to go to school to be a dentist, getting a degree in biology from American University, before enrolling in the University of Maryland School of Dentistry (via Insider). Belfort paid for his schooling by selling Italian ices with a friend of his on the beach, which earned him $20,000, according to Investopedia.
However, Belfort's dentistry ventures wouldn't last long at all, after his first day in dentistry school when the dean proclaimed "The golden age of dentistry is over. If you're here simply because you're looking to make a lot of money, you're in the wrong place" (via Insider). This led Belfort to drop out of the university to pursue a career that would make him the most money. He then found himself a job as a door-to-door salesman, according to Insider.
Pursuing wealth
Jordan Belfort found some success in his venture of selling meat and seafood, even having a team of workers who were able to move two tons of meat and seafood a week, but eventually, things went south and he had to file for bankruptcy at the age of 25, according to Investopedia. Belfort said the reason the business went under was because of small profit margins, according to Insider.
After this business stint, a family friend of Belfort's got him a job as a stockbroker trainee for L.F. Rothschild, and over the next couple of years, he would gain experience working in a number of firms. Belfort grew uncomfortable with the unstable working environments that the financial firms offered, so he opted to create his own firm. In 1989, Belfort and his previous co-worker Kenneth Greene started a Stratton Securities franchise in a small office at a car dealership. After five months, they made $250,000, bought Stratton Securities, and renamed it Stratton Oakmont, where the two would later make a fortune (via Insider).
A life of crime
In two years, Stratton Oakmont had raked in $30 million in commissions (via Insider), but the firm was quickly entangled in controversy. Within a year of its founding, the U.S. Securities and Exchange Commission, also known as the SEC, was investigating Stratton Oakmont for "questionable sales and trading practices" according to Insider. Stratton Oakmont had made most of its money by convincing its investors to invest in volatile markets, before selling all of its stock and making a profit, according to Crime Museum. Jordan Belfort was notorious for his sales practices, with the company motto being "Don't hang up until the client buys or dies" (via Crime Museum).
During this time of great financial success, Belfort became involved in excessive drugs, gambling, sex workers, and a very hedonistic lifestyle, according to Insider. He often bought luxury items like yachts, helicopters, and fancy cars, which he often destroyed while on drugs (via Insider). He was also accused of domestic abuse and reportedly kicked his wife down a flight of stairs, according to the Crime Museum.
If you or anyone you know is struggling with addiction issues, help is available. Visit the Substance Abuse and Mental Health Services Administration website or contact SAMHSA's National Helpline at 1-800-662-HELP (4357).
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Facing justice
Jordan Belfort would not be able to escape the consequences of his actions for long, and it was a money-laundering scheme that would earn him prison time, according to Insider. After Belfort had made illegal profits, he opened a bank account in Switzerland where he laundered money through his friends and family, according to Crime Museum. One of these friends who smuggled money for Belfort was his drug dealer, Todd Garrett, who was caught with $200,000 from Belfort and a partner of Belfort's, Danny Porush. The money was being sent to a Swiss bank. After this debacle, a French banker who was a part of a money-laundering scheme in Miami told the U.S. government that Belfort and Porush were his clients, which led to Belfort's arrest, according to Insider.
After being arrested for securities fraud and conspiracy to commit money laundering, Belfort agreed to work with the police in order to get a lighter prison sentence (via Insider). He still faced prison time and was given a four-year sentence but only actually served a year and 10 months, before being released according to Insider.
Life after prison
While Jordan Belfort was serving his prison sentence, he shared a cell with comedian Tommy Chong and wrote his autobiography, "The Wolf of Wall Street" (via Insider). The 2007 book became a huge success, and later helped contribute to Belfort becoming recognized in pop culture. Eventually, the book was turned into a film, also called "The Wolf of Wall Street," in which Leonardo DiCaprio starred as Jordan Belfort. After Belfort became somewhat of a pop icon, he began his career as a motivational speaker, according to Insider.
Belfort hasn't been without controversy after his prison sentence, however. Some prosecutors accuse Belfort of not paying his victims for his money laundering schemes and continuing to profit from his crimes (via Insider). Belfort still lives a very comfortable lifestyle, and now resides in Los Angeles, California, and talks to people about what he has learned when it comes to finance, his regrets when it comes to scamming people, and works to teach people how to become financially successful, according to Investopedia.