Jordan Belfort

Jordan Ross Belfort
Born:	July 9, 1962 The Bronx, New York
Charges:	Securities fraud, Money laundering
Sentence:	4 years (served 22 months)
Facility:	Taft Correctional Institution
Status:	Released

Jordan Ross Belfort (born July 9, 1962) is an American former stockbroker, author, and motivational speaker. He ran Stratton Oakmont, a brokerage firm on Long Island that operated penny-stock fraud schemes through most of the 1990s. In 1999 he pleaded guilty to securities fraud and money laundering. He admitted that for about seven years his firm manipulated the share prices of at least 34 companies and defrauded more than 1,500 investors of roughly $200 million.

A judge sentenced him to four years in federal prison. He served 22 months at Taft Correctional Institution in California. The reduction followed his cooperation with federal authorities. He wore a recording device and gave evidence against former partners and employees. The court ordered him to pay $110.4 million in restitution. Most of that debt is still unpaid. Federal prosecutors have returned to court more than once to argue that Belfort earned money from speaking and book deals without paying victims their share.

Belfort wrote a memoir, The Wolf of Wall Street, published in 2007. Martin Scorsese directed a film based on it in 2013, with Leonardo DiCaprio in the lead. The film earned five Academy Award nominations. Belfort now works as a sales trainer and public speaker.

Stratton Oakmont and the Fraud

Belfort was born July 9, 1962, in the Bronx. His family moved to Bayside, Queens, when he was young. Both parents worked as accountants. He attended American University and studied biology. He enrolled at the University of Maryland School of Dentistry and withdrew almost immediately.

His first job in finance was at L.F. Rothschild, where he trained as a stockbroker. By his account he was licensed shortly before the October 1987 market crash, and the firm laid him off soon after. He moved to a Long Island shop that sold penny stocks. That introduced him to the cold-call sales culture he would later build a firm around.

In 1989 Belfort founded Stratton Oakmont with Danny Porush. The firm operated out of Lake Success, New York. It dealt in penny stocks, the low-priced shares of small companies that trade outside the major exchanges. Stratton Oakmont grew into one of the largest "boiler room" operations of its era.

The firm ran a pump-and-dump model. It acquired large blocks of a thinly traded stock. Its brokers then cold-called retail investors and pushed the stock hard, driving the price up. Once the price climbed, Belfort and his associates sold their own holdings near the top. The price collapsed afterward, and ordinary buyers held the losses.

Brokers worked from scripts. They were trained to overcome objections and not to accept a refusal. Top sellers were paid heavily. Those who missed quotas were pushed out. At its peak the firm employed more than 1,000 brokers and carried about $5 million in monthly overhead. Stratton Oakmont also underwrote initial public offerings, including the IPO of the shoe company Steve Madden, Ltd. For a later case built on the same boiler-room mechanics, see Roger Knox's Swiss Web: The $137M Pump-and-Dump Empire.

Regulators tracked the firm from early on. The National Association of Securities Dealers kept it under scrutiny through the 1990s. In a 1994 settlement with the SEC, Stratton Oakmont paid $2.5 million, and Belfort was barred from running a securities firm. He sold his stake. In December 1996 the NASD expelled the firm and shut it down. Officials called Stratton Oakmont one of the worst actors in the industry and cited a disregard for the rules of fair practice.

Charges and Cooperation

The FBI opened a criminal investigation in 1996. The New York field office worked with the U.S. Attorney's Office for the Eastern District of New York. Agents interviewed former employees, pulled trading records, and traced money Belfort had moved through Swiss and Bahamian accounts. The investigation covered the pump-and-dump schemes, money laundering, and the use of a foreign banker to move proceeds offshore.

Belfort was indicted in 1998 on securities fraud and money laundering charges. He faced a long potential sentence. He agreed to cooperate.

His cooperation was extensive. He wore a wire to meetings with former colleagues and recorded conversations that helped build cases against others. He gave testimony against 29 former partners and subordinates. The agreement required him to disclose his assets and income. That disclosure requirement later became the basis for the long fight over his restitution payments.

In 1999 Belfort pleaded guilty in the Eastern District of New York to securities fraud and money laundering. He admitted that the scheme ran for about seven years, manipulated the stock of at least 34 companies, and defrauded more than 1,500 investors of roughly $200 million.

Sentencing and Incarceration

On July 18, 2003, U.S. District Judge John Gleeson sentenced Belfort to four years in federal prison. The court also ordered $110.4 million in restitution to his victims. Because of his cooperation, he served only 22 months.

Belfort reported to Taft Correctional Institution, a minimum-security federal facility near Bakersfield, California, that held mostly non-violent offenders. His paperwork was lost on arrival, and he spent his first days in solitary confinement before being moved into the general population.

His bunkmate at Taft was the comedian Tommy Chong, of Cheech and Chong, who was serving nine months for selling drug paraphernalia. Chong described Belfort's arrival as "like Elvis coming to jail." He said Belfort paid other inmates to make his bed and clean his bunk.

Chong was writing a book at the time and pushed Belfort to write one too. The two traded stories at night. Belfort started drafting, struggled with the prose, and nearly quit. He found a copy of Tom Wolfe's The Bonfire of the Vanities in the prison library, and its style gave him a model to follow. That draft became The Wolf of Wall Street.

Belfort was released from Taft in 2006 after serving 22 months of the four-year term. The early release came from his cooperation against other Stratton Oakmont participants.

Restitution

The 2003 sentence carried a $110.4 million restitution order, payable to roughly 1,513 identified victims. It is one of the larger individual restitution orders in a securities case.

The fund has collected a small share of that total. About $12.8 million has reached victims. Roughly $11 million of that came from assets seized at his arrest, mostly real estate. The government has said the remaining balance is close to $97 million.

Prosecutors have challenged Belfort over the gap between his earnings and his payments. A 2018 filing alleged that he earned at least $9 million from speaking engagements between 2013 and 2015 and did not pay victims a proportional share. The two sides have fought over which income is subject to garnishment. At a 2018 hearing in Brooklyn, U.S. District Judge Ann Donnelly said Belfort had to meet his obligations.

In 2013 the government revised his payment plan. The earlier terms called for half of his gross income. The revised terms set a floor of $10,000 a month. At that rate the full balance would take decades to clear.

Some victims have spoken publicly. One investor lost more than $100,000. Another lost $800,000 and has criticized the attention the film gave Belfort.

Books, Film, and Later Career

Belfort published The Wolf of Wall Street in 2007. The memoir covered his years at Stratton Oakmont, including the fraud and the drug use. A sequel, Catching the Wolf of Wall Street, followed in 2009.

In 2013 Martin Scorsese directed a film adaptation starring Leonardo DiCaprio as Belfort. The film ran three hours and grossed about $392 million worldwide on a $100 million budget. It earned five Academy Award nominations, including Best Picture, Best Director, and Best Actor. The picture renewed public interest in the case.

The film also drew criticism from victims. Some said it gave a soft treatment to a fraud that cost real people their savings. Under his restitution agreement, Belfort was required to turn over a share of his film-rights income. A 2018 court ruling forced him to surrender additional profits after the government disputed his accounting.

Belfort co-founded Stratton Oakmont with Danny Porush, who pleaded guilty to securities fraud and money laundering and served 39 months in federal prison. Steve Madden, whose company Stratton Oakmont took public, served 31 months for fraud tied to his stock.

Belfort now runs a sales-training and speaking business. He markets a method he calls the "Straight Line System" through seminars, courses, and books, including Way of the Wolf. Reported fees for his appearances have ranged from tens of thousands of dollars into the six figures. He has also written and commented on cryptocurrency markets, which critics note given the nature of his earlier conduct.

Wolf of Wall Street cameo

Belfort makes a brief on-screen appearance in Scorsese's The Wolf of Wall Street, the film adapted from his memoir. He appears in the closing minutes as the emcee at a sales training seminar in Auckland, New Zealand, introducing the fictionalized version of himself (Leonardo DiCaprio) to the audience. The scene depicts the real-world reinvention Belfort pursued after his release: paid public speaking on sales technique. The choice to give Belfort the introducing-himself role works as a wink to the audience about whose voice the rest of the film has been narrating from.

Clip provided by snip.ninja.

Frequently Asked Questions

Q: How long was Jordan Belfort in prison?

Belfort served 22 months at Taft Correctional Institution in California. His sentence was four years. The reduction followed his cooperation with federal authorities, which included wearing a wire and testifying against 29 former associates.

Q: What did Jordan Belfort do?

Belfort ran Stratton Oakmont, a brokerage that operated pump-and-dump penny-stock schemes from 1989 to 1996. He and his brokers manipulated share prices and defrauded more than 1,500 investors of roughly $200 million. He pleaded guilty to securities fraud and money laundering in 1999.

Q: Where did Jordan Belfort serve his sentence?

He served at Taft Correctional Institution, a minimum-security federal prison near Bakersfield, California. His bunkmate was the comedian Tommy Chong, who encouraged him to write the memoir that became The Wolf of Wall Street.

Q: How much restitution does Jordan Belfort owe?

A court ordered him to pay $110.4 million to victims. About $12.8 million has been collected, most of it from assets seized at his arrest. The government has said roughly $97 million remains unpaid, and prosecutors have returned to court over his payments.

Q: Is the Wolf of Wall Street based on Jordan Belfort?

Yes. The 2013 film directed by Martin Scorsese is based on Belfort's 2007 memoir of the same name. Leonardo DiCaprio played Belfort. The film earned five Academy Award nominations.