Generally speaking – and this is not qualified financial advice – It’s pretty much always better to invest your money rather than lit it simply sit in the bank earning pennies in interest. Putting your money to work can often lead to increasing it, and over time, you can see those investments double, triple, or even become ten times their original worth.
Of course, not every investment is a sound one. Sometimes, you don’t discover that until the bottom falls out from underneath you.
And if you’re really unlucky, you might invest in perhaps the three most infamous fraudulent ventures of all time. That’s what happened to New York oil baron Robert Belfer. A man who has hit for the cycle in the bad investment triple crown.
Robert Belfer is the son of Arthur Belfer, who fled Poland during World War II and founded Belco Petroleum Corp. The business grew into a Fortune 500 company, and Robert Belfer eventually took it over.
By the mid-1980s, Belco Petroleum merged with InterNorth, Inc., which later merged with Houston Natural Gas. That merger led to the creation of Enron.
At the peak of their power in the 1990s and 2000s, the Belfer family owned roughly $2 billion worth of equity in Enron. That was enough to be one of Enron’s largest non-institutional stakeholders.
Unfortunately, as you likely know, Enron’s executives were illegally hiding massive debts from investors and creditors, and the company eventually declared bankruptcy. It was the largest bankruptcy in US history up to that point. Tragically, that $2 billion equity stake reportedly went to ZERO.
After the Enron fiasco, the Belfers made the seemingly safe and smart decision to invest a healthy chunk of their remaining family fortune with a wealth advisor named… Bernie Madoff.
As you likely now know, Bernie Madoff was secretly running the largest Ponzi scheme in history. The Belfers withdrew more than $28 million from Madoff’s fraud during their time as investors. In the wake of his arrest and claw-back lawsuits, the Belfers were sued by Irving Picard, who was in charge of liquidating Madoff’s assets to try and recover the funds of other victims.
Unbelievably, the Belfers’ bad investment luck did not stop with Madoff.
It has recently been revealed that two of Belfer’s firms, Belfer Investment Partners and Lime Partners LLC, held shares in both FTX and its United States subsidiary, FTX US. Those shares were worth $34.5 million as of early last year.
As you now know, FTX collapsed in a matter of days last November and has been working its way through bankruptcy while the firm’s former CEO Sam Bankman-Fried faces a litany of criminal charges.
If Belfer can take any solace over this latest failed investment, it’s that he’s not alone in being blinded by the FTX light. Tom Brady and his ex-wife Gisele Bundchen had nearly 1.8 million combined common shares of FTX. Several other celebrities also bought into the FTX buzz at various levels.
Belfer has several philanthropic endeavors, too, regularly donating to the Metropolitan Museum of Art and multiple medical institutions. Those charitable tax deductions might especially come in handy this year.
Even after the chaos of Enron, Madoff, and FTX, the Belfers aren’t in dire financial straits. Still, those are three tough pills to swallow, no matter how much money you have!