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What Did Jordan Belfort Do? – Illegal Things Of The Wolf Of Wall Street

In this article, you will now find the answer to “what did Jordan Belfort do that was illegal?” and related problems around this controversial person in real life.

What Did Jordan Belfort Do That Was Illegal?

The illegal things that Jordan Belfort committed back in the day were securities fraud and money laundering.

Belfort ran a boiler room under his securities firm’s name, Stratton Oakmont, which was started in 1989. During the time running the boiler room, Belfort and his broker’s team marketed penny stocks and defrauded investors with a pump and dump scheme. 

Specifically, his broker force pressured investors to place their money into highly speculative securities. When the share price rose, the firm sold its stake for a profit, sometimes 4-5 times the price it bought for after a month, and then its traders stopped pushing the stock. As a result, the price plummeted, and investors lost money.

At the peak of Stratton Oakmont during the “boiler room” day, the firm had to employ 1,000 stock brokers and was involved in the stock issues with more than $1 billion, including insider trading or stock launch for footwear company Steve Madden.

Besides, Belfort also did tax evasion and money laundering by sending millions of his own money to Switzerland so that he could lie to the US government to pay fewer taxes. He did this because the bank-secrecy laws in Switzerland are very strict, so the US cannot have such information from them.

In December 1996, Stratton Oakmont was shut down by the National Association of Securities Dealers, and in 1999, Belfort was charged with crimes of securities fraud and money laundering. The fraud had caused $200 million for his investors.

Jordan Belfort
Jordan Belfort

When did Jordan Belfort get caught?

Jordan Belfort got caught on September 2, 1998, and was convicted for securities fraud and money laundering in 1999. 

Before that, his firm Stratton Oakmont was shut down by the National Association of Securities Dealers. He got a 4-year prison term but was released after 22 months by the FBI owing to his cooperation.

How did Jordan Belfort get caught?

Before being convicted in 1999, his “golden dinastry” began to slope slowly, starting in 1994 with an agreement with the U.S. Securities and Exchange Commission (SEC) that “required a lifetime ban from the securities industry.” However, he continued conducting the business through Danny Porush, his associate at Stratton Oakmont.

Then, his firm was expelled from the National Association of Securities Dealers in 1996. And finally, he was arrested in 1998 for conspiracy to commit money laundering and securities fraud, according to Bussiness Insider. In 1999, he was indicted for such convictions. 

How did Jordan Belfort get away with it?

Belfort was taken to Taft Correctional Institution to begin serving his four-year prison term after being convicted of securities fraud and money laundering. However, he just had to serve his prison time for 22 months and eventually get released in exchange for a plea deal with the FBI.

What laws did Jordan Belfort break?

Belfort apparently broke the SEC financial law. Additionally, he also violated criminal, marital, and ethical laws because he was also involved in many problems such as drug dealing, DUI problems, substance abuse, and assault.

How did Jordan Belfort commit money laundering?

Belfort committed money laundering by sending money to Switzerland through his drug dealer Todd Garrett. According to Bussiness Insider, the money-laundering scheme of Belfort was run by a French private banker working for a Swiss bank. When this banker was arrested, he cited Belfort and Porush as his clients.

What did Jordan Belfort do wrong?

Belfort did many things wrong, which was also depicted in the movie “The Wolf Of Wall Street.” Besides committing money laundering and securities fraud, he also had problems with DUI, drug addiction, and domestic violence, which was claimed by his wife Nadine Caridi. He also encouraged reckless behavior in his employees, like sex and substance abuse.

In an interview with The Guardian, he said that “the drug use and the stuff with the hookers and the sales assistants and the sex in the office … that stuff is really, really accurate…”

Belfort (left) and Leonardo playing Belfort in the movie The Wolf of Wall Street (right)
Belfort (left) and Leonardo playing Belfort in the movie The Wolf of Wall Street (right)

About The Wolf Of Wall Street Movie

The Wolf Of Wall Street was a movie directed by Martin Scorsese, based on the same-named memoir by Jordan Belfort in 2007. The movie starred Leonardo DiCaprio as Belfort. After premiering on December 17, 2013, the film was released exclusively through digital distribution in the United States on December 25, 2013, by Paramount Pictures.

Belfort told The Guardian in an interview that his life of drug addiction was “even worse” than in the film. He also added that the scene in which Belfort hit his wife in the stomach was not true. He expressed that “it was more of a struggle” because he did not intentionally kick her out when she grabbed onto his leg. He said he did it because of the influence of “massive quantities of drugs.”

Who busted The Wolf of Wall Street?

The Wolf of Wall Street was busted by the SEC and the FBI since they noticed Belfort illegally making money and his “boiler room.” In 1998, the FBI arrested him. Then, he agreed to gather evidence on his colleagues for leniency.

How did The Wolf of Wall Street get busted?

He got busted because his firm drew great attention from the SEC and the FBI, owing to the tremendous and suspicious money he got.

To know more about this, you can watch the video about “How The Wolf Of Wall Street Was Finally Caught” that was embedded below.

FAQs

How much did Jordan Belfort steal?

When Belfort was arrested, he was indicted for stock scamming, leading to 1,513 investors losing more than $200 million.

What did Jordan Belfort lie about?

Belfort lied to investors about penny stocks, making them invest their money into highly speculative securities and eventually stealing money from them. 

Why was Stratton Oakmont illegal?

Stratton Oakmont was illegal because it was a type of boiler room that used the “pump and dump” scheme to artificially inflate the price of penny stocks.

Video: How The Wolf Of Wall Street Was Finally Caught

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