Celebrities may lead glamorous lives and have fabulous automobiles and homes, but their wealth and fame don’t insulate them from the scams and hoaxes that plague even the savviest investors. In some cases, it can make them even more susceptible.
Here we take a look at some of the celebrities over the years who have been fooled into parting with their money, or who have found their fame being used as the basis of a scam perpetrated on others.
Kevin Bacon and Kyra Sedgwick
Perhaps the most widely publicized victims of rogue financier Bernard Madoff’s Ponzi scheme were actors Kyra Sedgwick and her husband, Kevin Bacon, who had managed to stay out of the tabloids for many years.
“I think the interesting thing about it was that I always thought, ‘We’re so boring. We should be in the tabloids more. C’mon honey, let’s have a scandal,'” the actress told the Associated Press.
Sedgwick and Bacon remained upbeat in light of their losses, but in early 2009, Bacon was quoted as saying he needed to work “for obvious reasons.”
Sidney Poitier, Norman Lear and Henry Mancini
Sedgwick and Bacon weren’t the first or the most famous celebrities to ever be duped financially. In the early 1980s, two Wall Street brokerages allegedly pulled off a huge tax-shelter fraud, taking more than $600,000 apiece from 88 investors, including (left to right) actor Sidney Poitier, television producer Norman Lear and composer Henry Mancini.
In late 1983, Sentinel Government Securities and Sentinel Financial Instruments were charged with the largest criminal tax fraud at that time in US history, allegedly supplying their investors with more than $130 million in income tax write-offs without actually buying or selling any government securities.
Though unaware they were claiming questionable deductions, the Sentinel customers benefited significantly from their “investments.” Lear deducted $1.8 million on his 1980 federal return, and Poitier wrote off $657,184 that same year.
Cindy Crawford and Rande Gerber
A German man was charged in November, 2009, of trying to extort $100,000 from former supermodel Cindy Crawford and her entrepreneur husband Rande Gerber over a photo of their daughter bound and gagged.
Edis Kayalar, 26, was charged with one count of extortion. The photo was purportedly taken by the couple’s former nanny and shows the girl, then 7, bound to a chair wearing shorts and a T-shirt.
The girl told her parents, who were unaware of the photo until Kayalar showed it to them, that the nanny took the picture as part of a “cops and robbers” game.
According to news reports, Kayalar was indicted in Germany in early February and extradited to the US. on one count of extortion and two counts of attempted extortion. The nanny has not been charged.
Art gallery owner Lawrence Salander was charged in March, 2009, with bilking several high-profile clients, including Robert DeNiro, out of $88 million altogether on high-priced art deals.
Salander allegedly stole around 50 paintings from DeNiro, all painted by the actor’s father. DeNiro said he consigned the paintings to Salander’s gallery, but Salander turned around and sold the paintings to help settle his debts.
DeNiro wasn’t the only celebrity to sue Salander, though …
Tennis great John McEnroe also claims Salander duped him out of $2 million. Prosecutors say Salander double-sold shares in paintings to unwitting investors.
McEnroe, who had invested money with Salander, reportedly filed suit against him in 2007 when he discovered Salander had sold him a painting with outstanding liens against it.
In Britain, more than 600 people, including singer and actor Jerome Flynn, found out they’d been duped to the tune of £80 million in a “Ponzi” scheme in August, 2009.
The mastermind of the scheme, Chelsea-based Indian entrepreneur Nandan Pruthi, along with his business partners Kenneth Peacock and John Anderson, were arrested after a series of raids conducted by the London police, according to Observer newspaper reports.
The alleged con offered clients returns of up to 13 percent a month as it claimed to lend the money to “distressed” businesses in need of short-term cash.
Also on the list of celebrity victims were former England cricketer, Darren Gough, Rising Damp actress, Francis de la Tour, and an unnamed 1960s pop singer.
In 1972, author Clifford Irving created a media sensation when he claimed he co-wrote an authorized autobiography of Howard Hughes. Hughes was such a reclusive figure that he did not immediately refute Irving’s claim, which led many people to believe the book was genuine.
Before publication, however, Hughes denounced Irving and the book in a teleconference. On Feb. 12, 1972, the Chicago Tribune reported that Time, Inc., cancelled its $250,000 contract with McGraw-Hill, branding the autobiography a “hoax.”
Irving later was convicted of fraud and spent 17 months in prison. In 1977, Irving’s book The Hoax was published in England, depicting the events of the Howard Hughes autobiography story. The 2007 film The Hoax, starring Richard Gere, is based on these events.
In January, Kiefer Sutherland found out he’d been roped into an alleged cattle selling scam that netted more than a million dollars.
Prosecutors said Michael Wayne Carr of Linden, N.M., had agreements to buy steers in Mexico for his customers and sell them for profit in the United States. Carr allegedly took $869,000 from Sutherland.
Prosecutors said there’s no record Carr ever bought the steers. They also said Carr sold steers that didn’t belong to him.
Carr is charged with 12 felonies, including grand theft, forgery and embezzlement. If convicted on all charges, Carr faces 18 years in prison.
Oprah Winfrey Fans
This scam wasn’t attempted on Oprah herself, but instead on her millions of fans. Fortunately, in April 2009, before anyone seemingly fell for the hoax, the Federal Bureau of Investigation and the Oprah Winfrey Show warned Internet users should not be confused by an e-mail scam disguised as an Oprah contest, purportedly giving away $1 million.
The FBI said the scam asked for contact information, and also asked recipients to buy a plane ticket in exchange for a promised seat to Winfrey’s popular Chicago-based talk show and a chance to win $1 million.
Winfrey’s Harpo Productions also posted a warning about the scam on the Oprah.com Web site.
The one-time midtown Manhattan home of actress Anne Hathaway and her then-boyfriend Raffaello Follieri is going on the market for $33 million. Hathaway and Follieri shared the five-bedroom duplex in the mid-2000s, paying $37,000 a month to rent the Olympic Tower spread, according to co-listing agent Alexander Bank of Compass, whose family owns the apartment. An Italian entrepreneur, Follieri, in 2008 was sentenced to 4½-years in prison on charges of conspiracy, fraud and money laundering. He was released in 2012 and deported to Italy.
Per Page Six, Follieri has been telling the Italian press that he is attempting to buy 50 percent in the Foggia Calcio soccer club in Southern Italy. He says he is being helped by his former investors, including Ron Burkle, part owner of the Pittsburgh Penguins hockey team. Burkle’s lawyer told Page Six differently: “Follieri is just making this stuff up. There is absolutely zero chance that Ron would invest with Follieri, directly or indirectly.”