Danny Porush

Last updated

Danny Porush
BornFebruary 1957 (1957-02) (age 66)
Lawrence, New York, U.S.
Occupations
  • Businessman
  • stockbroker
Criminal statusReleased in 2004 after 39 months
Spouse
Nancy Porush
​
​
(m. 1986;div. 2000)​
Lisa Krause
​
(m. 2000)​
Children4
Conviction(s)
Criminal penalty39 months in federal prison, $200 million in restitution

Daniel Mark Porush [1] (born February 1957) is an American businessman, former stock broker and convicted criminal who helped run a pump and dump stock fraud scheme in the 1990s at the Stratton Oakmont brokerage in collaboration with Jordan Belfort. In 1999, he was convicted of securities fraud and money laundering, for which he served 39 months in prison. [2] After prison, Porush became involved with a Florida-based medical supply company, Med-Care, which was the subject of federal investigations. In the biographical 2013 film The Wolf of Wall Street, which focuses on the story of Belfort and Stratton Oakmont, Jonah Hill portrays Donnie Azoff, a character loosely based on Porush. Porush has called the portrayal inaccurate and threatened to sue the filmmakers to prevent him from being depicted. [3]

Contents

Early life and education

Danny Porush, the son of a doctor, was raised in a Jewish family in Lawrence, Nassau County, New York. [4] [5] [6] He graduated from Lawrence Woodmere Academy. [4] He attended Dickinson College and Boston University but did not graduate. [4] [7] According to New York magazine, Porush then "bounced from job to job, working for, and starting up, a variety of small businesses." [7]

Career

Stratton Oakmont

In the late 1980s, Porush helped Jordan Belfort found Stratton Oakmont, a Long Island, New York "over-the-counter" (OTC) brokerage house of which Belfort was chairman and Porush was president. [8] Stratton Oakmont specialized in selling "penny stocks" and underwriting initial public offerings for small companies, including for Steve Madden (a childhood friend of Porush), [5] Master Glazier's Karate International Inc., Dualstar Technologies, [9] Select Media Communications, [9] United Leisure Corporation [9] and Questron Technology. [10] In 1994, Porush took over as chairman and CEO of Stratton after Belfort was barred from the industry. [11]

Beginning in 1989, Stratton Oakmont became the subject of numerous disciplinary actions by the National Association of Securities Dealers (NASD) and Securities and Exchange Commission (SEC). [11] [12] It was determined that Stratton Oakmont was involved in pump and dump stock fraud that involved artificially inflating the price of stocks through false and misleading positive statements in order to sell cheaply purchased stock at a higher price. Once the operators of the scheme "dumped" their overvalued shares, the price fell and investors lost their money. [13] In December 1996, the NASD permanently expelled Stratton Oakmont and barred Porush as well, fining him $250,000. [11] The NASD rejected Porush's claim that he was only "a figurehead", citing him as the salesperson with the largest individual allocation. [11] In its decision to bar Porush and his head trader, Steven P. Sanders, the NASD wrote that "[they] continue to deny responsibility and exhibit no remorse for [their] misconduct, and, but for the bar, would continue to pose an ongoing risk to the investing public." [11]

Following a federal indictment, Porush and Belfort pleaded guilty to 10 counts of securities fraud and money laundering in 1999. [14] In an exchange for reduced sentences, they cooperated with federal investigations of their colleagues. [14] Porush was "convicted of insider trading, perjury, conspiracy and money laundering and ordered to pay $200 million in restitution." [15] He was sentenced to four years in prison and Belfort to two years. Porush was released on probation in 2004 after serving 39 months. [2] [16]

In 2013, the story of Stratton Oakmont as told by Belfort in his 2007 memoir was made into Martin Scorsese's The Wolf of Wall Street . In the film, Jonah Hill portrays the character Donnie Azoff, loosely based on Porush. Porush has said that many of the movie's scenes are fictional. [3] The character's name was changed during movie development after Porush threatened to sue Paramount Pictures if he was depicted. [17]

Medical supplies

After his release from prison in 2004, Porush became involved with a Boca Raton, Florida-based medical supply and medical equipment company that, according to Forbes magazine, has operated under the names Med-Care Diabetic & Medical Supplies, Christian Diabetics and the Christian Healthcare Network. [2] Med-Care was the subject of a congressional hearing on Medicare fraud in April 2013. [18] [19] In May 2014, Porush's involvement with Med-Care was cited as reason for a portion of the federal Stop Scams Act of 2014, which would require Medicare providers to disclose their ownership interests. [19] [20] According to Med-Care's attorney, the Centers for Medicare & Medicaid Services had been informed and had previously reviewed, and approved, Porush's role with the company. [19]

In 2014, Porush and five other Med-Care company personnel were named in a whistleblower lawsuit alleging fraudulent Medicare claims. [18] The case was initially dismissed in federal court for lack of specific proof. [21] But the lawsuit was refiled and accepted in federal court when the initial whistleblower was joined by two more former Med-Care employees alleging the company of defrauding the federal government. [22] The lawsuit alleged that telemarketers, under Porush's guidance, made unsolicited calls to citizens and used high-pressure sales tactics to push them to accept medical supplies they might not have wanted. [15] On January 14, 2015, Federal Bureau of Investigation (FBI) agents, Florida fraud department, and local police raided Med-Care Diabetic & Medical Supplies' Boca Raton offices and removed files. [23] [24] On January 16, 2015, Med-Care's attorneys filed a motion in court to disqualify the whilstleblowers' attorneys for professional conflict of interest. [15]

Personal life

In 1986, Porush married his cousin Nancy. [25] They divorced in 2000. Porush is now married to Lisa Krause. [26]

In 2006, Porush's first wife sued him for failure to pay child support. [2] He said he owned no assets and that everything belonged to his second wife. [2]

See also

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<i>Stratton Oakmont, Inc. v. Prodigy Services Co.</i> 1995 decision of the New York Supreme Court

Stratton Oakmont, Inc. v. Prodigy Services Co., 23 Media L. Rep. 1794, is a 1995 decision of the New York Supreme Court holding that online service providers can be liable for the speech of their users. The ruling caused controversy among early supporters of the Internet, including some lawmakers, leading to the passage of Section 230 of the Communications Decency Act in 1996.

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<span class="mw-page-title-main">Stratton Oakmont</span> Defunct American brokerage house (1989–1996)

Stratton Oakmont, Inc. was a Long Island, New York, over-the-counter brokerage house founded in 1989 by Jordan Belfort and Danny Porush. It defrauded many shareholders, leading to the arrest and incarceration of several executives and the closing of the firm in 1996.

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References

  1. ↑ Sharon R. King, "Two Former Stratton Officials Indicted on Fraud Charges", The New York Times, September 4, 1998
  2. 1 2 3 4 5 Maiello, Michael; Stewart, Emily (August 21, 2008). "Blood Money". Forbes . Retrieved January 18, 2014.
  3. 1 2 Suebsaeng, Asawin (December 10, 2013). "Dwarf-Tossing, 3-Way With Teen Employee Never Happened, Says Real "Wolf of Wall Street" Exec". Mother Jones. Retrieved January 17, 2014.
  4. 1 2 3 Harrigan, Susan (2002). "Castles Made of Sand". In Andrew Leckey (ed.). The Best Business Stories of the Year: 2002 Edition. Vintage Books. pp. 227–257. ISBN   0-375-72501-6.
  5. 1 2 Pfefferman, Naomi (January 6, 2014). "Jonah Hill's not-so-nice Jewish guy". Jewish Journal. Retrieved March 1, 2014.
  6. ↑ Goldberg, Jennifer (February 2014). "Oscars are light on Jewish nominees". Jewish News. Retrieved April 15, 2014.
  7. 1 2 Johanna Berkman (February 26, 2001). "Steve Madden: Crisis of the Sole". New York . Retrieved January 14, 2015. After five years at Boston University, he left without getting a degree and bounced from job to job, working for, and starting up, a variety of small businesses, including an ambulance company called SureRide Ambulette.
  8. ↑ Wyatt, Edward (September 24, 1999). "Stratton Oakmont Executives Admit Stock Manipulation". The New York Times. Retrieved October 27, 2014.
  9. 1 2 3 "Order Making Findings and Imposing Remedial Sanctions". Administrative Proceeding File 3-9491. Securities and Exchange Commission. August 18, 1998. Retrieved October 27, 2014.
  10. ↑ "Questron Technology Inc". SEC Info. SEC database. November 15, 1995. Retrieved October 27, 2014.
  11. 1 2 3 4 5 Condon, Nancy A. (December 5, 1996). "NASD Regulation Expels Stratton Oakmont; Principals Also Barred". Press Release. Financial Industry Regulation Authority. Archived from the original on October 4, 2014. Retrieved October 27, 2014.
  12. ↑ Eaton, Leslie (December 6, 1996). "The N.A.S.D. expels Stratton Oakmont, ordering repayment". The New York Times. Retrieved October 27, 2014.
  13. ↑ "Pump and Dump Schemes". Fast Answers. U.S. Securities and Exchange Commission. March 12, 2001. Retrieved October 17, 2017.
  14. 1 2 Wyatt, Edward (September 24, 1999). "Stratton Oakmont Executives Admit Stock Manipulation". The New York Times . Retrieved October 27, 2014.
  15. 1 2 3 Green, Laura (January 18, 2015). "Former employees say Med-Care defrauded government". The Palm Beach Post. Washington. Retrieved December 22, 2017. It said the company cold-called seniors and other consumers, pushing them to accept medical equipment they may not have wanted or needed... The complaint alleges telemarketers were guided by Danny Porush, "who is an expert in running high-pressure telemarketing operations."
  16. ↑ Baynes, Terry; Michael Pell (February 21, 2014). "Health fraud lawsuit echoes 'Wolf of Wall Street'". New York. Reuters. Retrieved July 21, 2014.
  17. ↑ Nehme, Farran Smith (December 21, 2013). "Good Film, Extremely Bad Wolf". Barron's .
  18. 1 2 Baynes, Terry (February 21, 2014). "Health fraud lawsuit echoes 'Wolf of Wall Street'". Reuters. Retrieved September 2, 2014.
  19. 1 2 3 Green, Laura (May 25, 2014). "Legislation aims to curb Medicare scams". West Palm Beach Post. Washington. Retrieved September 8, 2014.
  20. ↑ "All-out press to combat Medicare fraud". Media Release. United States Senator Bill Nelson. May 13, 2014. Retrieved September 8, 2014.
  21. ↑ Green, Laura (June 26, 2014). "Judge throws out fraud claim against Med-care". West Palm Beach Post. Retrieved September 8, 2014.
  22. ↑ Green, Laura (January 14, 2015). "Boca Raton firm with link to 'Wolf of Wall Street' raided by feds". The Palm Beach Post. Washington. Retrieved December 22, 2017.
  23. ↑ Aruna Viswanatha and Zachary Fagenson (January 14, 2015). "FBI raids Florida firm with 'Wolf of Wall Street' link: witnesses". Reuters . Retrieved January 14, 2015.
  24. ↑ Bess Levin (January 14, 2015). "Guy Whose Life of Crime Was Memorialized in Leonardo DiCaprio Flick Not Yet Done With Life of Crime". Dealbreaker.com. Retrieved January 14, 2015.
  25. ↑ Dockterman, Elianna (December 26, 2013). "The Wolf of Wall Street: The True Story". Time .
  26. ↑ "How the Wolf of Wall Street's partner in crime lives". NewsComAu.
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