Skinning The Wolf of Wall Street: Victims Speak Out
March 1, 2014
Pokorny was purging old documents inside his Illinois home last summer when he
came across two-decades old files from his case with Stratton Oakmont.
were a reminder of a miserable time in his life, which he was glad to finally
put behind him. Pokorny hadn’t thought about Jordan Belfort, Daniel Porush and
their penny stock-pushing band of misfits in a long time, and for good reason.
“brings back bad memories,” he tells me.
eventually decided to toss the documents.
try to block this out,” he admits.
long after trashing the files did Pokorny learn that legendary director Martin
Scorsese was releasing a $100-million film called The Wolf of Wall Street
starring Leonardo DiCaprio as Belfort, the founder of now-defunct Lake Success
“pump-and-dump” brokerage firm Stratton Oakmont, which one prosecutor at the
time dubbed “the most famous boiler-room brokerage firm in recent memory,”
according to The New York Times. The film, it turns out, was inspired by
Belfort’s memoir of the same name, which he penned after serving 22 months in
a federal prison for securities fraud and money laundering. (As legend has it,
Belfort’s cellmate Tommy Chong, of Cheech and Chong fame who’d been busted
for dealing mail-order bongs, convinced the penny stock fraudster to write a
can’t recall the name of the broker who first made contact with him in
November 1992 with a phone call that sent his financials plunging downward,
fast. But he clearly remembers him having a distinct voice, which continues to
can’t stand to talk to anybody with a New Jersey accent anymore. It’s bad to
say that,” he says, managing a laugh. “It was just bad memories.”
was living in Naperville, Ill., when the obnoxious Stratton Oakmont broker first
contacted him out of the blue. He was in his 30s and was running a commercial
general contracting company he purchased from his father. The firm hounded him
for a while before Pokorny was finally convinced to invest in an irresistible
blue chip stock, Stratton Oakmont’s modus operandi. His first investment with
the firm doubled its return right out of the gate.
next thing I know, I kept on giving them more, and I was making money,” he
spiraled out of control in January 1993 when the firm, unbeknownst to Pokorny,
used his money to buy other stocks without his permission, he says. His calls
for them to stop recklessly using his money went unheeded. Finally, he had to
get his lawyer involved, a counterstrike that led to the firm mailing him a
check for about $200,000.
at that point, Pokorny was already in an $800,000 hole. Then came another
crushing blow: “I ended up getting divorced over all this, too,” he says.
“That was even worse.”
is not the only story of heartbreak and financial distress caused by Belfort.
The former Wall Street charlatan—partly fueled by an insatiable drug habit, he
professes in the book; mostly fueled by greed and reckless criminality, counter
prosecutors—tricked then bilked countless victims out of millions, according
to court documents, interviews with attorneys on the case, short-changed
investors and his own book. In other words, the shyster not only lied, cheated
and robbed unsuspecting people, but destroyed their lives.
E. Dequine, Jr., a former Golden Gloves boxing champion, got burned by Stratton
Oakmont, according to his Northport-based attorney Timothy Dennin, and suffered
a stroke years later under extraordinary stress. Both he and his wife have since
had been persuaded to take his money out of the brokerage firm where he’d had
a very long-term relationship and put it with Stratton Oakmont,” his son Dr.
Louis E. Dequine III told the Times. “I remember thinking, ‘Oh gosh,
he’s finally getting old enough where people are taking advantage of him.’
Hollywood’s elite gathers for the 86th Academy Awards on March 2 to recognize
the top films of 2013, among the nominees for Best Motion Picture of the Year
will be Scorsese’s The Wolf of Wall Street. It also secured nominations
in several other prestigious categories, including Best Performance by an Actor
in a Leading Role for DiCaprio’s depiction of Belfort, who had received close
to $1 million for the rights to his memoirs. The film, which grossed $113
million domestically as of Feb. 25, grabbed a total of five Oscar nominations.
Buying It: Stratton Oakmont victim Robert Shearin of Manhattan Beach, Calif.
used to get in screaming matches with the firm’s brokers over their reckless
use of his money. He doesn’t believe the “Wolf” is a changed man.
film focused much of its attention on the drug-addled debauchery and
testosterone-fueled romps and lavish parties, which almost always involved
prostitutes and insane amounts of cocaine and other drugs, like Quaaludes,
Belfort’s favorite. It failed, critics say, to portray the rotten way in which
Belfort and his hooligans (“Strattonites,” as they’re called in his book)
scammed people into throwing away hundreds of thousands of dollars for their own
benefit. And by deciding not to offer a glimpse into the real-life implications
of their fraud, they are glamorizing the serious crimes that led to some
investors losing considerable portions, if not all, of their life savings,
victims of the scam and those close to the original case charge. What’s
playing out in real life at this very moment, however, could have far greater
implications for the 1,513 victims recognized by the government.
eight years since the self-professed “Wolf” was released from prison on
April 28, 2006, only $11,629,143.64 has been repaid toward a court-imposed
restitution totaling $110,362,993.87. The bulk, prosecutors and court documents
say, has come from the liquidation of some of Belfort’s and Porush’s
properties that the conniving duo forfeited as part of a plea deal.
victims who have tried to put Belfort behind them, like Pokorny has attempted to
do, may be shocked to learn that prosecutors are currently involved in ongoing
discussions regarding Belfort’s restitution. Last October the U.S. Attorney
for the Eastern District of New York moved to declare Belfort in default. Then
they withdrew the motion following a sharp rebuke from the disgraced ex-con’s
attorneys—who criticized the government’s letter for mischaracterizing the
facts in the case. They’ve also argued that the former head of Stratton
Oakmont was only obligated to pay 50 percent of his gross income until his
period of supervised release ended in 2009. Belfort, for his part, has offered
to turn over 100-percent of the proceeds from both books and the film, according
to his lawyers and public comments he has made. The government, Belfort’s
attorneys say, rejected that offer.
layman’s terms, Belfort is manipulating the legal system to stall, in an
attempt to get out of repaying the people he ripped off so severely.
in talks to find a resolution and seek a way for the victims in this case to get
the restitution that they were granted by the court,” Robert Nardoza, the
spokesman for the U.S. Attorney’s office in Brooklyn, tells the Press.
He declined to explain why negotiations are necessary despite the court-imposed
restitution, and he didn’t comment on Belfort’s attorneys’ claims
regarding his client’s obligations.
have no problem calling it as it is, however. Robert Shearin, a Stratton Oakmont
victim who lives in Manhattan Beach, Calif., which borders Hermosa Beach, the
waterfront community where Belfort now lives, isn’t optimistic that he and
other victims will ever be fully compensated.
“The reality is the losses were real, the criminality was real, and I don’t think his compunction is real,” he tells the Press. “Or else he wouldn’t have been fighting this whole restitution order and have so little come into the fund.”
Convict: Jordan Belfort, founder of now-defunct Lake Success brokerage firm Stratton Oakmont, went to prison for securities fraud and money laundering. (Photo credit: Wikimedia Commons)
in Sheep’s Clothing
Cohen was the assistant United States attorney who prosecuted the case against
Belfort and Porush, which led to a grand jury indicting the pair in September
1998, according to court records.
years federal prosecutors had been investigating Stratton Oakmont, which ran its
high-intensity boiler room operation out of a large office building on Marcus
Avenue in Lake Success, but the investigation that eventually led to the charges
of securities fraud and money laundering really began in earnest around 1997,
Cohen tells the Press. Investigators had previously attempted to go after
lower-level Stratton workers by charging them with a crime and hoping that
they’d turn on their bosses. But the firm was tight-knit, and brokers on the
floor weren’t members of Stratton’s close inner circle. So, they pushed on.
probe led them to Switzerland, where investigators were able to convince Swiss
authorities to hand over documents naming both Belfort and Porush.
was the moment we knew we really had it,” Cohen recalls.
and Porush were both arrested on the same day, but at the time, neither of them
was aware that the other was in custody. Prosecutors used that to their
advantage. They interviewed Belfort while he was out on $10 million bail and sat
down separately with Porush, who remained behind bars for several months
following his arrest.
always felt like we needed to confirm everything [Belfort] said because he’s a
salesman,” Cohen explains. “There’s never a moment when you can be sure
whether he’s being genuine or not; you’d have to confirm it all.”
tight-lipped Belfort that moviegoers were introduced to in Scorsese’s film
isn’t at all the same man who wilted under pressure when the feds had him
pinned. Never did he attempt to save Porush—or anyone for that matter—by
revealing he was wearing a wire—which is depicted in the film and makes
Belfort out to be a loyal protector of their collective sins.
flipped on him within 36 hours,” Cohen says. (Translation: Belfort was more of
a rat than a wolf.)
probe culminated with the greedy duo both copping pleas for reduced sentences.
was also the fiery scene that played out in the Stratton Oakmont broker room
floor when the filmmakers, apparently trying to bolster their mythical depiction
of the Quaalude-popping philanderer, made it seem as if Belfort refused to
settle with the U.S. Securities and Exchange Commission (SEC).
never happened,” Cohen says, bluntly.
the real world, Belfort has claimed that Stratton Oakmont targeted wealthy
investors, but Cohen says the firm’s victims “ran the gamut.”
of them were wealthy, some of them were not,” he says. “Obviously you have
to have enough disposable money to be able to take calls from a broker and
invest it, but there were people that invested fifty or a hundred thousand
dollars and a considerable portion of their life savings or their children’s
college fund or their pension money. So there were many people who lost a
sizable amount of their income. Belfort would like you to think that this is
just rich people who were throwing money away and don’t feel sorry for them,
but they weren’t.”
Nygaard, a Kansas City, Miss.-based attorney, represented or spoke to more than
two-dozen Stratton Oakmont victims who invested hundreds of thousands of
first call from Stratton Oakmont broker was fairly polite and serious, Nygaard
tells the Press. “You’d invest in the stock and you’d get your
statement and it would’ve tripled in a month and you’d get your next
statement and it’s up more,” she says. Before investors knew what was going
on, “The guy’s calling you and tells you, ‘You better buy more, it’s
going to go public pretty soon,’ ” she continues.
the money walked in the door, it’s like the No-Tel Motel, it’s not going to
come back out,” she says, adding: “None of my clients have received any
money from any voluntary restitution payment made by Belfort or Porush.
the Northport attorney, represented about 20 victims himself—he estimates to
have recovered money for half his clients—and said the culture depicted in the
film closely resembled life in the Stratton Oakmont broker room floor.
brokers, some who Belfort claimed in his book didn’t even graduate high
school, were instructed to never take no for an answer, and used “scripts”
to dodge all types of objections, Dennin says.
one of the scripts Dennin obtained during his work on the case, titled
“Straight Line Philosophy” (inspected by the Press; which happens to
also be the name of Belfort’s current product in his motivational speaking
business), brokers were told: “The introduction is the hook to catch the
prospect’s interest and his attention. The first attempt might not always
work, nor the second or the third, but before moving on make sure he bites.”
the next line screams, “the bigger the fish, the harder the fight.”
would “make representations about ‘I’m not pressuring you now but down the
road if I have an opportunity there’s a stock that we may be bringing to
market that’s only available to certain select investors,’ ” Dennin says.
“And get them to bite. If they agree to buy, then they get all enthusiastic,
then they got the room screaming.”
scores of investors were burned for hundreds of millions of dollars.
Belfort has stated that he’s a changed man after his prison stint. He’s now
a motivational speaker and his greatest priority is “to settle his fines,”
according to a letter sent from his now-fiancé to U.S. District Court Judge
John Gleeson, who’s been overseeing the case since its inception.
has turned his life around,” she wrote. “Our business and our family rely on
his reputation of being an honest and honorable man.”
Belfort nor his attorney Robert Begleiter, with Manhattan-based Schlam Stone
& Dolan, returned a request for comment for this story.
an interview with CNN’s Piers Morgan shortly after the movie’s debut,
Belfort told the host: “I try daily to right the wrongs I committed.”
does he feel toward his victims? “I feel terrible about what happened,” he
told the host, adding that he lives not with shame, but with remorse.
victims aren’t buying any of it.
Afraid of the Big Bad Wolf?
A.E. Vitt, 81, a retired dentist who lives in Heath, Texas, was practicing in
tiny Seneca, Kan., two decades ago when Stratton Oakmont got him on the line. At
the time, they were pushing Nestle stock. He was caught in the same trap as
hundreds of others.
were very persistent,” he tells the Press. “They wouldn’t take no
for an answer.”
firm wanted more money, so Vitt ended up taking out close to $100,000 in loans
from the bank just to continue his investments.
also blames himself.
sort of a dumbass,” he says, his voice getting lower, “so it took a couple
trips thinking it was good and then after that, it didn’t take long for me to
figure out that I was going nowhere fast.”
years had gone by before he realized the firm was playing him.
who has only been able to reclaim less than $8,000 of the quarter-million
dollars that Stratton Oakmont stole from him, still decided to buy a ticket to
see Belfort’s purported real life story.
thought it was the most vulgar and sex[ual] thing I’ve ever seen in my
life,” he says from Texas. “Plus, the way he treated everybody…I thought
he was a glamorized S.O.B.”
can’t understand why he can still get away with it,” he adds.
the Manhattan Beach, Calif., victim, is also retired. He lost several hundred
thousand dollars with Stratton Oakmont, but worked hard to make the money
back—though he estimates he’s only recovered 17 percent of what he lost.
got heated between Shearin and his broker once he realized they were trying to
pull a fast one on him.
would end up in screaming matches when I finally kind of figured out that I’m
just getting screwed here,” he tells the Press.
else would get on the phone and just be screaming back at me, calling me a
fucking asshole and an idiot and too stupid to make money,” Shearin recalls.
“Just screaming at me. So we would have these screaming matches in the middle
of my work day when I’m trying to run my business… They don’t show that
[in the film].”
has spotted Belfort cheering on his kid at the local soccer field. But he’s
resisted the urge to approach him. “What’s the point?” he asks. “What am
I going to do? Walk up to him and ask him to please write me a check? I don’t
need to be around him. He’s not in my circle of friends and I don’t want him
Harvard Business School graduate, now 66, says his brother once told him that he
serves as a cautionary tale because he should’ve had the educational
background to notice someone was hustling him.
Shearin, too, opened up his wallet to see the movie but he never intended to
walk out of the theater with a better understanding of Belfort’s life.
to a movie to see truth would be like going to Oliver Stone’s JFK to learn
about the Kennedy assassination,” he says. “So I didn’t walk out thinking
, ‘Oh, that didn’t tell the truth.’ ”
“[It was a] one-sided rollicking frolic through hedonism,” he says, “but it sure left out a lot of the story.”
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