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Yachts, planes, women, drugs – stockbroker Jordan Belfort had it all and lost it all. Tom Leonard meets the man who taught the Mafia how to cheat – then wrote a book about it
“I was a very smart kid, I was a great salesman and I was driven to make money,” he says now. “Those were God-given assets. But I had some God-given detriments, mainly that I was emotionally immature, insecure and I had a predisposition to instant gratification.
“My role models were Michael Douglas’s character, Gordon Gekko, in the movie Wall Street and Richard Gere from Pretty Woman. The best of everything – the presidential hotel suite, the Ferrari, the house on the beach, the gorgeous blonde, the expensive wine, the art auctions, the yacht – the ultimate Wall Street rich guy.”
And then some. I can’t recall Richard Gere’s character falling asleep in a pile of cocaine big enough to use as a pillow, or even the venal Mr Gekko co-opting his wife’s sweet old aunt to smuggle money out of the US.
Belfort managed both. He used his first Wall Street bonus to buy a white Ferrari because he’d seen Don Johnson drive one in Miami Vice and he once racked up a $700,000 hotel bill.
Now 45 and, he insists, a completely reformed and penitent man, Belfort lives in a modest three-bedroom house in Manhattan Beach, a relatively inexpensive part of Los Angeles.
Apart from the £9,000 Bulgari gold watch on his wrist and the painting in his bedroom of his old yacht, formerly owned by Coco Chanel, he says he has nothing left from the bad old days. Fifty per cent of everything he earns is going to the investors he defrauded. In five years, he has paid back $14 million of the $110 million he owes.
He is divorced from Nadine, a former beer commercial model, but they are friends and live near each other. They both look after their two children and Belfort describes himself as every inch the loving father and dutiful “soccer dad”.
There are pictures of him with his children dotted around the sparsely furnished house. On the large, empty coffee table where once might have sat an upturned mirror for chopping cocaine, there now lies a DVD of the children’s film The Goonies, and a porcelain figurine of Napoleon and Josephine.
It was, he tells me, a jokey gift from Nadine. He is 5ft 7in and some have suggested he suffers from a Napoleon complex – though he denies it.
Most men in Belfort’s position might hesitate to rake up the past but the man who was so determined to make it on Wall Street is now determined to make it as a writer. He has written a bawdy romp about his rise and fall, which predictably has been snatched up by Hollywood.
Martin Scorsese, Leonardo DiCaprio and the writer of The Sopranos are all “optioned” to be involved. “DiCaprio will just have to get stoned, stumble around like a moron and drool,” says Belfort, laughing.
He’s not wrong. After wading through all 519 lurid pages of The Wolf of Wall Street, readers may find themselves agreeing with the former executive at LP Rothschild who – in the opening sentence of the book – informs a fresh-faced Belfort that he is “lower than pond scum”.
A former meat salesman from Queens with a pronounced gift of the gab, Belfort – whose parents were accountants – was tailor-made to profit from the Wall Street bull market of the 1990s.
At Stratton Oakmont, his bucket shop stockbroker firm based not in Manhattan but suburban Lake Success on Long Island, a thousand hungry young brokers – many of them straight out of school – were simply handed a script written by Belfort and told to read it down the phone as they cold-called potential share buyers.
Belfort had a motto: “No one hangs up the phone until the customer buys or dies.” A lot of customers might ultimately have preferred the latter, as Stratton was running what was known as a “pump and dump” scheme.
Its brokers would drive up the price of shares and then Belfort and his partners would sell the large chunks they owned, causing the share price to collapse and leaving Stratton’s clients with heavy losses.
He claims that both his business dealings and his private life came off the rails because he kept pushing the boundaries of what he could get away with. “It was about becoming numb to what’s right and wrong,” he says.
“The first time I took a cash kickback, I was kind of nervous and it was just five or 10 thousand dollars. Before long I was getting millions of dollars and it seemed like it was OK. ‘Everyone on Wall Street does that’ was how I rationalised it.”
In 1991, Forbes magazine described Belfort as a “kind of twisted Robin Hood who takes from the rich and gives to himself and his merry band of brokers”. In reality, some of the investors were not rich and were ruined.
Belfort was earning $50 million a year, once reportedly making $12 million in three minutes. In the ultimate compliment, the Mafia were sending people to Stratton on “work placements” to learn how it was done.
A pioneer in promoting office bonding activities, Belfort thought it would improve morale if staff were encouraged to have sex with each other whenever they could, even under the desks. There were mid-afternoon “coffee breaks” with a troupe of hookers in the office car park. One office junior agreed to have her hair shaved off on the trading floor in return for $5,000 for a breast job.
And then there were the drugs. Most Strattonites indulged heavily in cocaine. Belfort’s favourite tipple was Quaaludes, a recreational drug based on a prescription sedative so powerful it was banned in many countries.
On one occasion, Belfort ran out of “ludes” while staying in a £9,000-a-night suite at the Dorchester in London. Waking his secretary in New York at four in the morning, he had an emergency supply sent out on Concorde.
Belfort and his wife appeared to spend most of their married life swearing at each other. Whenever she rang him when he was away on business, he invariably had a call girl in the room – and even he sometimes realised that it looked bad.
That said, in a characteristically classy moment, he once made love to Nadine on a “mattress” of $3 million in $10,000 stacks of notes. But after he kicked her downstairs in front of their young daughter and then drove stoned into his garage door with the little girl unbuckled beside him, Nadine packed him off to drug rehab. Then she left him.
By then, he had other worries. In 1997, Stratton was kicked out of the National Association of Securities Dealers for defrauding customers and the firm was ordered to be liquidated. Belfort and his cronies loved to boast of being bound by a sort of omertà, the Mafia vow of silence. But the broker boys proved not nearly so tough when the FBI came knocking.
Belfort gave evidence against his colleagues and, after admitting charges of money-laundering and securities fraud in 1999, served only 22 months of a four-year sentence in 2004. Curiously, there is very little in the book on his decision to turn against his friends. Belfort says 90 per cent of those involved did the same, adding that he had to reach a deal because he could have got 30 years if it had gone to trial.
Prison proved fruitful. Encouraged by cellmates to write a book about his life, Belfort found inspiration in a prison library copy of Bonfire of the Vanities, Tom Wolfe’s satire about a “Master of the Universe” Wall Street yuppie whose “childish sense of self entitlement” matched his own.
Leaving aside the financial crimes, the Belfort saga is above all a cautionary tale of what happens when immature young men become immensely rich. It has echoes of the stories surrounding the behaviour of Premiership footballers in Britain.
Except that in finance, the additional problem is the way the money is made, says Belfort. “You make all this money but there’s nothing attached to it. You make your money buying and selling the ingenuity of other people.”
There’s an “emptiness” to that sort of money, he says. So the bankers and brokers try to fill the void with material possessions – and when that’s not enough, with drugs. Belfort claims heavy drug-taking is “pervasive” on Wall Street.
“There’s a lot of hedge fund managers that love Quaaludes. Once again, it’s all about the insane money. High-powered Wall Street guys don’t lose their jobs if they have a drug problem. As long as they’re still making money it’s considered not the end of the world.”
Belfort says his drug addiction was to blame for some of his wilder behaviour at home, but he adds: “I wish I could say that about some of the financial fraud. I did that because I was just a frickin’ crook. That’s harder to rationalise.”
The book has been billed as an act of atonement. However, if they skip a paragraph in the prologue in which Belfort says he is writing in the “voice playing in his head at the time”, readers might think he is still rather pleased with what he did.
Critics have wondered whether he doesn’t still relish his depravity, but Belfort insists he “despises” the man he once was. So how did he feel as he wrote it? “Sometimes I laughed, sometimes I cried. Sometimes I just shook my head and thought what a —-ing nut I was.”
He is now writing a satire about the subprime mortgage disaster. For research, he has been talking to a top contact at Goldman Sachs on how traders “securitised these loans, how they essentially dressed up subprime packages to make them look good enough to buy as credit-worthy”. It sounds rather like what went on at Stratton.
The subprime crisis is dragging down America’s entire economy, but the fact that Belfort was able to become a mortgage broker even after admitting fraud and money-laundering charges speaks volumes about how carefully it was regulated.
And he wasn’t alone. “Everyone who was being thrown out of the securities industry was becoming one,” he says, his voice rising in disbelief. “Anyone could be a mortgage broker. Even me.” After the drugs and the madness, a final sobering thought from Mr Wolf.