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12 Billionaires Who Are Now Broke | Filthy Rich To Bankrupt

[Estimated read time: 8 minutes]

As hard it is to make, maintaining a billionaire status is not an easy job. But many billionaires still do lose their entire wealth in a matter of months. But what could possibly cause those losses? Well, most of such losses are a direct result of illegal actions such as money laundering, stock manipulation and other financial crimes, while others were blindsided in economic downturns.

One such downturn was the 2008 financial crisis, which ultimately erased billions of dollars from the books and sent the entire world in depression. I think it is time to take a look at some of the former billionaires who are currently broke after losing everything one way or the other.

12. Ramesh Chandra

ramesh chandraImage Courtesy: Forbes

Ramesh Chandra is an Indian businessman, who made his fortune in the real estate industry. At the height of his wealth, he owned an empire of $9.2 billion, which he created with the help of Unitech, India’s second largest real estate company to date. However, in 2001, the company got involved in a national telecom scandal for which his son Sanjay Chandra was arrested in 2011.

Due to massive amounts of piling debts and massive sell offs, Ramesh Chandra never recovered his lost wealth.

11. Patricia Kluge

kluge

Patricia Kluge was married to once the richest man in the world, John Kluge, who had a personal wealth of $5 billion in 1990. At the time of their divorce, Patricia was left with just $1 million in alumni, but she also received the lavish estate of Albemarle in the Virginia countryside. She took her chance and established the Kluge estate winery and vineyard.

Patricia also entered the real estate business by taking $65 million in loan to build more than a dozen luxury houses, which later turned out to be her biggest mistake. The 2008 banking and housing crisis caused Patricia to default on her loans and was forced to sell her Albemarle estate along with her every valuable possession.

Fact: Her Kluge estate winery and vineyard was purchased by Donald Trump for $6 million.

10. Huang Wenji

china jicheng sharesImage Courtesy: Bloomberg

Huang Wenji is the chairman of the China Jicheng Holdings, a Hong Kong based umbrella making company, 75% stake of which is owned by him and his wife Chen Jieyou. In a recent stock market dip, his company’s stock fell about 91% in just two days, tanking his $1.9 billion of personal wealth.

The high volatility of the Hong Kong share market caused other companies to lost billions in market cap.

9. Alberto Vilar

Alberto VilarImage Courtesy: nydailynews

Alberto Vilar is a former U.S based investment manager, who made billions through his investment company Amerindo Investment Advisors. Along with his business partner, Gary Tanaka, Vilar made a hefty profit over the years. At its height, Vilar’s company had an estimated net worth of $1 billion.

But in 2000, a violent stock market sell off badly affected both his and his company’s financial status. Then in 2005, Villar and Tanaka was arrested on charges of securities fraud and in three years, both were convicted of money laundering, wire fraud and stock fraud cases. Currently, he is serving a 10 year prison sentence.

8. Adolf Merckle

adolf Merckle

Adolf Merckle was once one of Germany’s richest people with a personal wealth of around $12.8 billion. Like few others on this list, Merckle was also hit hard by the credit crisis of 2008 in which he lost about $3.6 billion. Despite of the massive loss, he still remained one of five richest men in Germany.

But by the end of 2008, his investment firm VEM, faced a serious liquidity crisis and reported $6 billion dollars in losses. To make up for it, Merckle played a huge gamble by making a series of risky investments, which ultimately caused him more money. After losing almost everything, Merckle tragically ended his life by throwing himself in front of a train.

7. Vijay Mallya

Vijay mallya

Vijay Mallya is an Indian businessman and a former billionaire, who is currently a subject of an extradition from U.K to India to face charges of a massive financial fraud. Mallya, the “King of Good Times” became India’s richest liquor king after taking over his father’s mid sized company at the age of 28 and turned it into multi billion dollar firm, making a personal fortune of 1.5 billion.

His troubles began when the amount of debt started to pile on his Kingfisher Airlines. He soon lost his controlling interest in United spirits and was forced to step down as chairman. With millions of dollars in debt, Mallya fled India to seek refuge in the United Kingdom. From being a billionaire, Mallya quickly escalated down to a criminal.

6. Seán Quinn

sean quinn

The recession of 2008 forced many companies out of business and wealthy persons to go bankrupt, and one of those people was Sean Quinn, who was once the richest person in Ireland with a net value of about $6 billion in 2005. With the help of his holding company Quinn Group, he purchased stakes in various multinational companies including Bupa Ireland and Anglo Irish Bank.

Soon after the financial crisis hit the Irish banking system, Sean Quinn lost almost all of his family wealth most of which is attributed to the drastic losses of the Anglo Irish bank. In 2008, one of his business Quinn insurance was fined a €3.25 million by Ireland’s Financial Regulator because of insider loans issued by Quinn insurance.

With multiple cases of liquidation litigation, corporate fines and fraud, Quinn finally filed for personal bankruptcy in 2011.

5. Bernard Madoff

bernie

Bernie Madoff was undoubtedly the modern king of Ponzi schemes. For more than 20 years until he was arrested in 2008, Bernie Madoff successfully defrauded thousands of investors of billions of dollars with his investment strategy called “split-strike conversion.” In his scheme, Madoff offered his clients of high and steady return, which he actually managed by pooling all the funds in one bank account.

After his scheme failed during the financial crisis of 2008, as he was unable to attract more clients because of the minimum liquidity in the markets, Federal investigations uncovered a $64.8 billion of fraud. It was estimated that during his operational years, Madoff accumulated billions of dollars in personal wealth.

4. Elizabeth Holmes

elizabeth holmesImage Courtesy: Max Morse

Elizabeth Holmes, an American inventor and entrepreneur became the youngest self-made female billionaire in 2015 after her health care technology company, Theranos reached $9 billion valuation and made a hefty profit. Holmes became an instant celebrity with her name on TIME’s 100 most influential people of 2015.

But her time as a billionaire was cut short as federal investigations loomed over her company with allegations of potentially misleading its investors about their new, innovative blood testing technology. Following these allegations, her credibility and personal wealth both took a serious hit.

Forbes devalued her personal wealth to zero and Fortune titled Holmes as one of the “World’s Most Disappointing Leaders.” She was also banned from any position in her company for two years by the Centers for Medicare and Medicaid Services.

Read: 23 Richest Engineers in the World

3. Allen Stanford

allen Stanford

Robert Allen Stanford is a former billionaire financier, who is now serving a 110 year prison term since 2009 after being convicted in a massive financial fraud. He was the Chairman of now defunct financial services company Stanford Financial Group. One of its subsidiaries, Stanford International Bank claimed it had around $8.5 billion in AUM (Asset under management) of at-least 30,000 clients in over 136 different nations.

It all started in 2009, when SEC launched an investigation on Allen Stanford and his company and charged him on account of fraud for illegally selling $8 billion in high-yield certificates of deposit in a massive ponzi scheme. He was finally arrested in June 2009, on counts of mail and wire fraud, money laundering obstruction of justice among other charges.

2. Bjorgolfur Gudmundsson

Bjorgolfur Gudmundsson

The banking crisis of 2007-2008 affected Iceland more than any nation in the world. It all started when all three major Icelandic banks default on their loans in late 2008, which ultimately caused a major economic and political unrest in Iceland for three years.

Bjorgolfur Gudmundsson, who was the second richest person in Iceland before the crisis, gained about 45% shares of Landsbanki, one of those three largest banks in 2002. According to Forbes in March 2008, Bjorgolfur was ranked 1014th richest person in the world with a total wealth of $1.1 billion.

Following the outbreak of the financial crisis in the country, Bjorgolfur lost his Chairmanship of Landsbanki in 2008 and declared his personal bankruptcy a year later. In less than one year, his personal wealth went down from $1.1 billion to $0.

His son on the other hand, Thor Bjorgolfsson, who also lost his entire wealth during the 2007-08 financial crisis, regained his billionaire status in 2015. Thor is Iceland’s only billionaire to date.

1. Eike Batista

Eike BatistaImage Courtesy: Juliana Coutinho

Brazilian businessman Eike Batista made and then lost multi-billion dollar fortune in mining and oil exploration industry over the period of two decades. With $30 billion of personal wealth in 2011, Batista became the 8th richest person on Earth and the richest in Brazil. His demise as a billionaire began after a sudden crash in the mining industry and the collapse of one of his biggest companies OGX.

Read: 35 Richest People in the World of All Time

Two years later in 2013, Forbes reported that Eike Batista lost nearly $20 billion in just one year alone. A year later, due to his massive debt and continuously falling company stock, his personal wealth took a huge plunge from $200 million to negative wealth.

On January 2017, Eike Batista was arrested by Brazilian authorities in a high-profile $100 million money laundering case (operation Car Wash).

One comment

  1. why is the british government shielding a criminal, ? Vijay Maallaya, & why is government of india incapeable of bringing him back to india to face justice ?

    it is probably due to the fact that the british government is so corrupt, aswell as those who just want the money of these rich criminals, so they ignore thier criminal activities.
    there is many criminals who are working in the insurance industry, aswell as the financial services industry, probably only god is going to bring them to justice, many corrupt hedge fund managers are getting away with fraud, deception aswell as the guys working in the city of london aswell as wall street. investigation into rothchilds, morgan, rockerfellers, plus similar clans is well over due.
    perhaps only on the final day of judgement all of humanity will come to know that justice has been done.

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