What's Become of Past Corporate Rogues?

Aug. 7, 2002 -- White-collar crime is nothing new, although tomorrow's punishments might become stiffer, thanks to recently passed corporate crime laws. Here's a look at some rogues and corporate criminals of the past and present and what has become of them.

Michael Milken: The so-called junk-bond king who pioneered the financing of companies with high-yield, or junk, debt, pleaded guilty in 1990 to six counts of securities fraud. He served two years in prison, paid more than $1 billion in fines and was banished from working in the securities business for life.

Milken, a prostate cancer survivor, now heads up the Milken Institute, an economic think tank in Santa Monica, Calif., and dedicates his time to prostate cancer research through an organization he founded called Cap CURE. With a reported net worth of $770 million, Milken ranked No. 340 on Forbes magazine's 2001 list of the 400 richest Americans.

Ivan Boesky: The former stock speculator pleaded guilty to making $100 million in illegal profits from insider trades in 1992. He served just under two years of a three-year sentence and paid an estimated $100 million fine. As part of a divorce settlement, Boesky reportedly received $20 million and a $2.5 million house from his ex-wife, Seema.

A mysterious figure, Boesky's whereabouts are sketchy — a recent report on MSNBC said he's thought to be staying out of the limelight in Europe. But he hasn't always been so low-key. After his release from prison, an article in Vanity Fair said the financier was finding "inner peace" on a mountaintop in California, leading a life of wine, women and weight-lifting.

Leona Helmsley: Known in the media as the Queen of Mean, Helmsley was convicted in 1989 of tax evasion and sent to a federal prison, ironically enough, on tax day, April 15, 1992. A judge later reduced her sentence from 30 months to 21 months so she could care for her ailing husband, Harry. Helmsley also paid $ 1.7 million in restitution and after her release was sentenced to three years' probation that included 250 hours of community service a year.

Helmsley was in the news again recently as a Manhattan judge fined her $10,000 for not showing up to a pretrial deposition in a defamation suit involving a former employee, who says Helmsley libeled and defamed him in a Wall Street Journal article in 2001. Helmsley, who said she was too ill to appear, was videotaped leaving a Manhattan restaurant with her dog, Trouble, hours after she was supposed to have appeared, according to published reports.

Charles Keating: A man who became a symbol of the savings and loan crisis of the 1980s, Keating's Lincoln Savings & Loan Association was charged with selling investors millions of dollars in unsecured junk bonds that turned out to be worthless.

Keating served four years of a 10-year state sentence and a concurrent 12-year seven-month federal sentence for securities fraud. Both convictions were overturned on appeals in 1996, but three years later, he plead to four fraud counts and was sentenced to 50 months in prison, time he had already served. Today, Keating reportedly lives modestly in Phoenix in one of the homes he built as a developer of affordable real estate in the '70s and '80s.

Nicholas Leeson : The rogue trader, who brought down Britain's Barings Bank after he incurred more than $1 billion in losses in 1995, served four years of a six-year prison term in Singapore, where he became sick with colon cancer and his wife left him to marry another trader.

Today, Leeson reportedly commands a nearly $10,000 fee for speaking appearances, where he talks about the perils of insider trading. His memoirs, aptly titled Rogue Trader, were made into a movie starring Ewan McGregor. Leeson has said that the $700,000 advance he made from the memoirs went to pay his legal bills.

Marc Rich: The former financier has been living in exile since 1983, when he was indicted on charges of racketeering, evading $48 million in U.S. taxes and buying $200 million in embargoed Iranian oil during the 1979 hostage crisis. He fled to Switzerland before he could be brought to trial. Rich's case was the largest income tax evasion case ever at the time.

He was later pardoned by President Clinton, a move the former president says he now regrets. Critics alleged that Clinton issued the pardon in exchange for contributions from Rich's ex-wife Denise, a generous Democratic donor. Clinton has always denied those suggestions.

Martin Frankel: In May, Frankel pleaded guilty to 23 federal counts of racketeering and wire and securities fraud for running a multimillion-dollar insurance scam in which he would gain control of insurance companies and steal cash from their reserves. He also recently pleaded guilty to 10 counts of felony theft in Tennessee.

When police went to Frankel's Connecticut home to arrest him in 1999, they found a "to-do" list with "launder money" written on it. Frankel, who fled the country, was later found in a German hotel room with nine passports and 547 diamonds. He is expected to be sentenced next year and could be facing as much as 150 years in prison and $6 million in fines.

Steve Madden: The maker of trendy shoes was sentenced to 41 months for securities fraud and money laundering in April. He plead guilty in May to helping manipulate more than 20 stock offerings, including his own company's, resulting in $100 million in losses for investors. Madden also paid a $1.8 million fine to settle insider trading charges with the Securities and Exchange Commission.

A University of Miami dropout who started his company on Long Island in 1990, Madden is scheduled to start serving his sentence this month.