Death by Fake Gurus

Many people fall for a scam at some point in their lives. I know I have. Most of us forget about it and carry on, but for some, that’s not an option. When a get-rich-scam or a self-help seminar goes wrong it can have drastic consequences — from suicide to negligent homicide.

The sweat lodge tragedy

Self-improvement is a big business. Most of us want to better ourselves in some way, there is a demand and there is a supply — from Instagram influencers to famous gurus like Tony Robbins. For a while now, one of the most notorious figures in the self-help industry has been making a comeback. His name is James Arthur Ray.

James Ray is a motivational speaker, author and new age guru. At the height of his career, Ray was heavily endorsed by many celebrities, including Oprah Winfrey and Larry King. He’s known for his spiritual approach to self-help and is an advocate of the pseudo-scientific “Law of Attraction”. In 2009, 3 people died from heatstroke during Ray’s “sweat lodge” challenge — an exercise allegedly designed to help participants conquer their limitations. Another 18 participants were hospitalised.

The “sweat lodge challenge” was the culmination of Ray’s 5-day “Spiritual Warrior” retreat, which cost a whopping $10,000. Kirby Brown, one of the unfortunate victims, used her life savings to travel to Arizona for the event. On the final day of the retreat, 48 people crammed into a tiny makeshift tent where the temperature reached more than 90°C (around 200°F). The participants were already weak and disoriented, after meditating in the Arizona desert for days without food or water. By nightfall, many of the people inside the tent were screaming for help, hallucinating and vomiting. Ray refused to provide any assistance. Instead, he encouraged them to carry on. Kirby Brown and James Shore died at the scene that same night. Liz Neuman, a mother of 3, later died in hospital.

James Ray fled Arizona before the police arrived and he was reluctant to assist the law enforcement with their investigation. He was later arrested and convicted of negligent homicide in November 2011. For his crimes, Ray served only 20 months in prison.

Shockingly, he is still active in self-help circles. In 2013 he re-launched his career with a bang, making an appearance on Piers Morgan Live. Ray’s comeback is also the subject of CNN’s documentary Enlighten Us: The Rise and Fall of James Arthur Ray. Later, he went on to publish a new book titled The Business of Redemption: The Price of Leadership in Both Life and Business.

Soldier killed by debt

Danny Butcher, a 37-year old army reservist, killed himself after paying £13,000 ($18,000) for property investment courses. The company behind these courses sold him the dream of becoming “financially free” but in the end, he failed to make any money. Mr Butcher’s family revealed he was already in debt before taking out more loans and credit cards to pay for property seminars. He had also been struggling with mental health issues.

Property Investors, run by a UK based property coach Samuel Leeds, have refused to take any responsibility. Leeds said: “People should only purchase courses they can afford.” However, the company makes clear income claims on their website, suggesting that “anybody can become financially free within twelve months or less by investing in property”. Although it doesn’t mention any specific figures it’s nonetheless something that could be seen as false advertising. Mr Leeds also owns a successful YouTube channel where he flexes his wealth, gives investment advice and interviews other scammers (for example Grant Cardone, a popular motivational speaker known for his 10x wealth growth challenges.)

The property investment industry in the UK is not regulated, therefore, anyone can sell courses and run seminars. This type of content is hard to moderate and it’s even harder to prosecute content creators for overstepping the boundaries. Fortunately, this hasn’t stopped Leeds’ victims from trying. Samuel Leeds has been heavily criticised by former pupils and according to the BBC, at least 78 people are trying to get a refund from Property Investors. The total amount comes to £200,000 ($277,000). One person, Dianne Granville, has already managed to get her money back and is helping other people do the same.

Bernie’s Ponzi scheme

This could very well be the largest Ponzi scheme ever created. It’s definitely one of the most famous scams in recent history. Bernard L. Madoff Investment Securities defrauded almost 37,000 people worldwide and stole more than $20 billion in principal funds. Even 15 years later people are still picking up the pieces. Many of the victims lost all their saving, some spiralled into debt. At least 4 people connected to Madoff have committed suicide, including his own son.

Nobody saw it coming, or if they did they didn’t announce it publicly. It’s thought that Madoff’s Ponzi scheme started in the ’80s but he wasn’t arrested until 2008. Madoff was an experienced hedge-fund investor and a former chairman of the NASDAQ. He was someone people trusted with their money. He paid wealthy investors generous returns on their initial investments and used their recommendations to lure in more victims.

One of his victims was a successful hedge-fund manager for Fairfield Greenwich fund, Charles Murphy. Murphy invested more than $7 billion of his clients’ money with Madoff before the Ponzi scheme was uncovered. Fairfield eventually paid out $125 million in settlements and Murphy moved to another firm. In 2017, he jumped to his death from the 24th floor of a luxury hotel. His suicide can’t be linked to Madoff directly but Murphy’s financial troubles since the scandal have been well documented. Another victim was a decorated British war hero William Foxton. He lost his life savings (over $1 million) and shot himself in the head. A French financier and aristocrat René-Thierry Magon de la Villehuchet was also left “totally ruined”, according to his brother Bertrand Magon de la Villehuchet. He invested both his personal money and that of his clients — a total of $1.4 billion. René-Thierry Magon de la Villehuchet was found dead in his office shortly after the scandal erupted. He had cut both his wrists. Madoff’s own family weren’t spared either. His elder son, Mark, hanged himself exactly 2 years after his father’s arrest. Madoff’s wife Ruth later revealed she and Bernie also attempted suicide.

Madoff’s victims are slowly clawing back their losses. Madoff Victim Fund was set up in 2013 and has since paid out nearly $3,2 billion. Madoff is serving a 150-year prison sentence but is seeking early release due to ill health.