A Brooklyn federal judge has shot down the latest effort by Jordan Belfort, Long Island’s one-time “Wolf of Wall Street,” to shield his assets from victims ripped off by his stock swindles who are still owed $97 million.
U.S. District Judge Ann Donnelly ruled that Belfort, whose 1990s Lake Success boiler room antics were portrayed in the Leonardo DiCaprio film, can’t use consumer credit protections to block garnishment of an equity stake he got for promoting Delos Living LLC, a real-estate firm.
“Congress adopted the garnishment limitation… to relieve countless honest debtors driven by economic desperation from plunging into bankruptcy in order to preserve their employment and insure a continued means of support for themselves and their families,” the judge wrote. “Nothing about the defendant's arrangement with Delos Living is consistent with that goal.”
Belfort, formerly of Old Brookville, was sentenced to serve 42 months in prison in 1999 for conspiracy, securities fraud and money laundering, and ordered to pay restitution of $110.3 million to victims of pump-and-dump stock manipulation schemes. He has paid back just over $12 million, the judge said.
At issue in the latest government collection bid was a stake in Delos Living LLC, a company promoting real estate projects based around wellness, paid to Belfort since 2016 through a company he set up called JB Global Holdings.
Belfort argued the stake was a form of “earnings” and federal law capped any garnishment at 25 percent. But Donnelly said it didn’t meet the test because the convicted fraudster doesn’t rely on his Delos stake for support.
She said he co-owns four companies 50/50 with his fiancé – an arrangement the government has claimed is used to try to shield income -- that he uses to market his “wolf” persona, including the chance to "experience the magic of... two full days of masterminding, brainstorming & one-on-one consulting and ... an intimate dinner with him at his private residence."
The judge also said that, while owing victims nearly $100 million, Belfort’s companies – owned by him and his fiancé – paid for their personal expenses of $1.4 million, $2.7 million and $3.7 million in 2013 to 2015, as well as paying “hundreds of thousands” to his children.
She wrote that the purpose of the cap on garnishing earnings was to enable a wage earner to support his family, not to frustrate the purpose of a restitution order, which is to “fully compensate… victims for their losses.”
Belfort’s lawyer did not respond to requests for comment. Donnelly’s ruling was issued last Friday.