American Greed

The Greed Report: 'Party Like a Perp—Legendary Bashes Thrown by the Rich and Indicted'

What good is having lots and lots of money if you can't show it off from time to time?

Fancy cars, opulent homes, maybe a mega-yacht — those are all nice. But there's no better way to show you really have money to burn than a giant, over-the-top party. Celebrity entertainment, an iconic location, hundreds of your closest friends — yeah, that'll do it.

That's apparently what David Brooks was thinking when it came time to celebrate his daughter's bat mitzvah in 2005. Nothing was too good for 13-year-old Elizabeth. So David rented out New York City's famed Rainbow Room, and hired Aerosmith, Tom Petty, 50 Cent, The Eagles and Kenny G.

How could Brooks possibly afford the rumored $10 million it cost to stage the so-called "Mitzvahpalooza"? Turned out he was running a massive fraud at his company that sold defective body armor to the U.S. Department of Defense. Today, Brooks is serving a 17-year prison sentence for conspiracy, fraud and obstruction of justice.

He also joins a long list of corporate crooks whose hearty parties came back to haunt them big time.

Koz He Could

Dennis Kozlowski
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Dennis Kozlowski

Perhaps the most infamous party of all is the 40th birthday bash that then-Tyco Chairman Dennis Kozlowski staged for his wife in 2001. No less than the island of Sardinia would do for the Roman orgy–themed event, featuring women in togas, scantily clad male models and an ice sculpture replica of Michelangelo's "David" that "urinated" Stolichnaya vodka.

As"American Greed" reported in 2008, the party cost more than $2 million, including $250,000 for the evening's main entertainment, singer Jimmy Buffett.

A videotape of the party became Exhibit A in Kozlowski's 2005 criminal trial on charges he treated Tyco as his personal piggy bank. At least half the cost of the party came from company funds, prosecutors said. Kozlowski served eight years in the New York state prison system for grand larceny, and today lives a much more modest lifestyle.

Billionaire Galleon Group hedge fund co-founder Raj Rajaratnam departs Manhattan Federal Court during his trial March 23, 2011, in New York City.
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Billionaire Galleon Group hedge fund co-founder Raj Rajaratnam departs Manhattan Federal Court during his trial March 23, 2011, in New York City.

Sri Lankan–born hedge fund mogul Raj Rajaratnam, the central figure in the largest hedge fund insider-trading scandal in U.S. history, apparently had a thing for country music — Kenny Rogers, to be specific.

So in 2007, at the height of Rajaratnam's success, he staged a giant Western-themed clambake at his $5 million estate in Greenwich, Connecticut. The headliner: none other than Kenny Rogers himself, who reportedly collected $4 million for a night's work.

Rajaratnam's favorite Kenny Rogers tune, appropriately enough, was "The Gambler," which Rogers played at least twice, according to people in attendance. But true to form, Rajaratnam always wanted more. According to reports at the time, Rajaratnam requested the song a dozen times at the party, before Rogers, exasperated, folded 'em and called it a night.

Rajaratnam would have done well to follow the advice in his favorite song about knowing when to hold 'em, fold 'em, etc. Federal authorities already had their eyes on him at the time of the party, but he kept on gambling, and within two years was under arrest for brazenly collecting and trading on illegal insider tips, mostly on tech stocks. He is serving an 11-year federal prison sentence for securities fraud.

Hef of the Heartland

Tim Durham in his office in Indianapolis
Source: Indianapolis Monthly
Tim Durham in his office in Indianapolis

Leveraged buyout king Tim Durham longed to be the richest man in the world, but he also wanted to stay true to his Midwestern roots. So when he turned 45 in 2007, he decided to turn his Indiana home into the Playboy mansion, and himself into a modern-day Hugh Hefner.

For the so-called "Pajama Party," he flew 25 gorgeous models from Los Angeles to Indianapolis, where Durham had them transported in Rolls Royces to his castle-like estate.

One of the models, Megan Hauserman, recalled for "American Greed" earlier this year how the locals in Indiana had never seen anything quite like it.

"Like, where did these girls come from," she said.

Meanwhile, amid ice sculptures shaped like dollar signs, Durham was right where he wanted to be.

"He had a huge stack of hundred dollar bills in his pocket," Hauserman recalls. "He was walking around in silk pajamas thinking he was Hugh Hefner with, like, a girl on each of his arms."

But now Durham has been ordered to exchange his pajamas for prison garb, sentenced to 50 years for fraud and conspiracy in one of the biggest investment frauds in Indiana history.

Hip-Hop Mayor

Kwame Kilpatrick
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Kwame Kilpatrick

The city of Detroit, which in 2013 became the largest municipality in U.S. history to go bankrupt, was already in rough shape in 2002. But you would never know from stories about the wild party Mayor Kwame Kilpatrick allegedly threw that year at the Manoogian Mansion — the mayor's taxpayer-funded official residence.

While never conclusively proven, stories about the party fed the growing scandals surrounding Detroit's so-called "hip-hop mayor," and things got even worse when two police officers who had been looking into the party alleged in court that they were fired in retaliation.

Former City Council member Sheila Cockrel recalled for "American Greed" how scandalous the party rumors were at the time. "The Manoogian Mansion is not a party house. What are you guys doing?"

There were strippers, the stories went, and calls to police and paramedics after Kilpatrick's wife supposedly assaulted one of the women who had been giving the mayor a lap dance.

The officers were awarded $8 million in a case that would begin the unraveling of what federal authorities claimed was a criminal enterprise run by Kilpatrick out of city hall.

Kilpatrick, once considered a rising Democratic star, is now serving a 28-year prison sentence for fraud, extortion and racketeering — allegations that might never have come to light were it not for one wild party.

And that's the thing about these swindlers' soirees. From the Playboy mansion on the prairie to the Mitzvahpalooza in Manhattan, it always seems like fun at the time … until someone winds up in prison.

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