Danny Porush

• 1. Introduction

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  Danny Porush once told securities regulators that he was merely "a figurehead" at his own brokerage. Born in February 1957, he became one of the best-known names in a stock fraud case that unfolded across the 1990s. Whether the figurehead claim held up is the first question this documentary follows. How does a young man who drifted between small ventures end up at the center of a federal prosecution? What does a scheme that cheats ordinary investors actually look like from the inside? How many years did he spend behind bars, and what business did he turn to afterward? And why did a Hollywood film about his old partner, Jordan Belfort, push him to threaten a studio with a lawsuit?

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• 2. Long Island Beginnings

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  Lawrence, in Nassau County, New York, is where Porush grew up. His father was a doctor, and the family was Jewish. He finished school at Lawrence Woodmere Academy, then enrolled at Dickinson College and later at Boston University. He left both without a degree.

  What followed was a restless stretch of work. New York magazine summed it up by saying that Porush "bounced from job to job, working for, and starting up, a variety of small businesses." None of those ventures made his name. That changed in the late 1980s, when he joined forces with Jordan Belfort.

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• 3. Stratton Oakmont

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  In the late 1980s, Porush helped Belfort found Stratton Oakmont, an over-the-counter brokerage on Long Island. Belfort took the title of chairman, while Porush served as president. The firm built its business on penny stocks, which are shares in very small companies, and on underwriting their first public offerings.

  The list of companies it brought to market included Master Glazier's Karate International Inc., Dualstar Technologies, Select Media Communications, United Leisure Corporation and Questron Technology. Another was Steve Madden, whom Porush had known since childhood.

  The balance of power at the top shifted in 1994. Belfort was barred from the industry, and Porush stepped up to become Stratton's chairman and CEO.

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• 4. Anatomy of a Pump

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  Trouble found Stratton Oakmont as early as 1989. From that year, the firm faced a string of disciplinary actions from the National Association of Securities Dealers, known as the NASD, and from the Securities and Exchange Commission.

  The charge was a pump and dump. Insiders bought shares cheaply, then pushed the price up with false and misleading positive claims. Once outside investors bid the price high, the insiders sold. The price collapsed, and the investors were left holding losses.

  In December 1996, the NASD permanently expelled Stratton Oakmont. It also barred Porush and fined him $250,000. His claim to be a figurehead failed, because the NASD pointed out that he was the salesperson with the largest individual allocation.

  The NASD's ruling on Porush and his head trader, Steven P. Sanders, was blunt. It said 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." Criminal charges were still ahead.

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• 5. Plea and Prison

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  A federal indictment led to guilty pleas in 1999. Porush and Belfort each admitted to 10 counts of securities fraud and money laundering. Both agreed to help investigators build cases against their former colleagues, and in return they received shorter sentences.

  One account describes Porush as "convicted of insider trading, perjury, conspiracy and money laundering and ordered to pay $200 million in restitution." His sentence was four years in prison. Belfort's was two.

  Porush walked out on probation in 2004, after serving 39 months. Within a few years, a book would put his old firm back in front of the public.

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• 6. The Film Version

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  Belfort published his memoir in 2007, and in 2013 Martin Scorsese turned the Stratton Oakmont story into The Wolf of Wall Street. Jonah Hill plays Donnie Azoff, a character loosely based on Porush.

  Porush was unhappy with what he saw. He has said that many of the film's scenes are fictional, and he called the portrayal inaccurate.

  His objection had effects before the cameras rolled. During development, he threatened to sue Paramount Pictures if he were depicted, and the character's name was changed as a result. Meanwhile, his own attention had moved on to a very different industry.

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• 7. Medical Supplies

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  After his release in 2004, Porush became involved with a medical supply and equipment company based in Boca Raton, Florida. Forbes magazine reported that it had operated under several names: Med-Care Diabetic & Medical Supplies, Christian Diabetics and the Christian Healthcare Network.

  In April 2013, Med-Care was the subject of a congressional hearing on Medicare fraud. A month after the following May, in 2014, his role at the company was cited as the reason for one provision of the federal Stop Scams Act of 2014, which would make Medicare providers disclose their ownership interests. Med-Care's attorney replied that the Centers for Medicare & Medicaid Services had been told of Porush's role, had reviewed it earlier, and had approved it.

  Also in 2014, a whistleblower lawsuit named Porush and five other Med-Care personnel. It alleged fraudulent Medicare claims. A federal court first dismissed it for lack of specific proof. The suit came back, and the court accepted it after two more former employees joined the original whistleblower.

  The new filing claimed that telemarketers, acting under Porush's guidance, made unsolicited calls to members of the public. It said they used high-pressure sales tactics to push people into accepting medical supplies they might not have wanted.

  On the 14th of January 2015, FBI agents, Florida fraud investigators and local police raided the Boca Raton offices and removed files. Two days later, on the 16th of January 2015, Med-Care's attorneys asked the court to disqualify the whistleblowers' attorneys over a professional conflict of interest.

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• 8. Family Ledger

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  In 1986, Porush married Nancy, his first cousin. The couple had three children and divorced in 2000.

  He then married Lisa Michelle Krause. In 2006, Nancy sued him for failing to pay child support. His answer was that he owned no assets and that everything belonged to his second wife.

  That second marriage lasted until 2020, when he and Lisa Michelle Krause divorced. By his own 2006 account, she was the one who held everything he lived on.

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