Broke billionaires. It sounds like an oxymoron. However, more than one person with billions in the bank has lost all that they ever had over the years. In some cases, they truly and tragically went broke. For most people with that kind of money, though, “broke” is a relative term. They may have filed bankruptcy either personally or in business, but that doesn’t mean that they went “broke” the way that it would mean for the regular person. Let’s take a look …
1. Elizabeth Holmes, Theranos Fraudster
If you haven’t seen the Theranos documentary then make sure to watch it. It’s one of the best examples out there of modern-day fraud. The company claimed to be able to detect a vast array of diseases from just a tiny drop of blood. It would be astounding new technology if it were true, but the claims have since been debunked.
Elizabeth Holmes was the founder and former CEO of the company. At one time, Forbes estimated her net worth at $4.5 billion. After the scandal, they revised her net worth, stating that it was basically nothing. She’s in the midst of lawsuits related to Theranos.
But just beacuse she’s got zero net worth, doesn’t mean that she’s exactly broke. She’s recently engaged to William “Billy” Evans, wealthy heir to the Evans Hotel Group. We don’t know exactly how they deal with finances between them, of course, but she’s certainly not living on the streets. But there’s no telling what might happen after her 2020 trial; her new home could be prison. She’ll be in good company with several other broke billionaires there, though.
2. Patricia Kluge, Trump Vineyard Owner
Patricia and John Kluge got married in 1981, when he was worth $5 billion. When they divorced about a decade later, she lost some of her own net worth. Nevertheless, she received $1 million per year in the divorce settlement. Plus she received a very fancy estate, which would turn out to cost her more than she could ever imagine.
Forbes reports that she took out $65 million in loans to aggressively grow her vineyard … but then the housing market crisis hit, and she ended up losing it all. Unable to pay her debt, she held an estate sale, getting rid of more than $15 million of personal items like jewelry. It still didn’t cover her bills; she filed for bankruptcy in 2011.
But what does that really mean? The New York Times reports that her and her husband “had listed assets of $2.6 million and liabilities of $47.5 million.” They further report that the couple “scrimped and saved and started” a new jewelry design business. They continue to comb their networks to find business partners willing to invest to help them get back to the lifestyle they were once accustomed to.
3. Vijay Mallya, Running from India
Vijay Mallya has been in the news repeatedly over the last several years. He is the former owner of Kingfisher Airlines in India. At his peak, he was a billonaire with a very extravagant lifestyle. However, he accrued countless debts trying to keep his airline afloat before it finally failed completely.
He fled to the UK, and although he claims that it wasn’t to avoid his debts, there seems to be no other reason. He’s been living there for the past three years, but the UK recently approved his extradition back to India.
He’s taken to Twitter about the issue, trying to fight extradition and claiming that he’ll pay 100% of his debt. So, apparently he must still have some of his money. India wants him back in the country to put him on trial as a “fugitive economic offender.”
4. Ruth Madoff, Bernie’s Wife
Bernie Madoff is infamous for the money-stealing Ponzi scheme that landed him in jail. His wife, Ruth, was never implicated in his crimes. However, as part of the legal agreement, she was only able to keep $2.5 million to live off of after his arrest.
That sounds like plenty of money to most of us, but when you’re used to life as a billionaire it probably feels paltry. The lawsuits have continued, and most recently Ruth agreed to pay over half a million dollars: $250,000 cash and the rest by giving up her grandchildren’s trusts. Moreover, all of her remaining assets upon her death will go to deal with her husband’s debts.
Ruth’s one of the broke billionaires who lost far more than money; both of her children have recently passed away, one of them to suicide.
5. Sean Quinn, Bad For the Whole Family
Sean Quinn was worth nearly $6 billion and was once the richest man in Ireland. However, his money was all tied up in investments, and they weren’t all good investments. For example, he had 25% stake in an Irish bank that had to get bailed out during the economic crisis, causing him to lose much of his wealth. Then he got into legal trouble. He racked up millions in fines because of insider loans.
Forbes named him “the biggest individual loser of the financial crisis.” That was more than a decade ago, and it’s taken until this year for the lawsuits to finally be settled. After all these years, the courts determined that Sean Quinn can stay in his home.
Moreover, although his children have had great losses due to their dad’s financial choices, they won’t have to file for bankruptcy themselves. They are all free to try to use their resources to get back into business and rebuild their lost wealth.
6. Eike Batista, From $30 Billion to 30 Years in Prison
Oil businessman Eike Batista was worth $30 billion in 2012. That’s personal wealth. He was the richest man in Brazil and one of the richest on the planet. But when you reach such great heights, you can fall so very far.
When Brazil’s economy tanked and his oil business failed, he lost $20 billion – in a single year. By 2014 he had negative wealth and filed for bankruptcy. Then it came out that he had engaged in money laundering and corruption, so in 2018 he was sentenced to thirty years in prison.
7. Allen Stanford, the Other Bernie Madoff
Bernie Madoff is the name we always think of when it comes to Ponzi schemes, but Allen Stanford was no better. Investors lost $7+ billion of money to his cons.
Allen is in prison now, and will be for the next 100 years. But, like many of these cases, the legal issues are far from over. A federal appeals court recently overturned a $65 million settlement related to the case. Wheras Bernie’s victims have recovered some of their money, most of Allen’s victims are still left out in the cold.
In these cases, it’s not just the billionaires who go broke – it’s their family, friends, and the people that they conned, most of whom didn’t have the resources to lose in the first place.
What other broke billionaires can you think of to add to this list?