News flash: Entrepreneurs are people too. And as with any group of people, it includes a few bad—and downright rotten—eggs. Insider trading? Check. Forming a gambling ring? Check. Starting a violent spat with an innocent women? Check. Take note from these founders' cautionary tales of bad behavior.
Pinkberry founder Young Lee
In early January, the frozen-yogurt chain founder was arrested in Los Angeles for felony aggravated assault stemming from an incident in June 2011, when he allegedly beat a homeless man panhandling near his car. The victim was reportedly hospitalized with a broken arm and cuts to the head. This isn't the first time the entrepreneur has been in trouble. Lee was reportedly convicted in 2001 of a misdemeanor for carrying a loaded firearm. Even though Lee left his position at Pinkberry in 2010, and is only in an advisory position now, the company he built has unfortunately been linked to the violent incident.
Megaupload founder Kim Dotcom
In early January, the popular Hong Kong-based file-sharing service was shut down by U.S. authorities, who accuse the founder of facilitating millions of illegal downloads, which they claim cost $500 million in lost revenue for entertainment artists. As the fight in Washington heats up over piracy legislation, the case is taking center stage in the press—partially due to it's oddity: A German national formerly charged with insider trading, who had changed his name to Dotcom, arrested on his birthday on his massive estate in New Zealand. Meanwhile, Megaupload is also locked in a legal battle with reps for R&B artist Mary J. Blige and Kanye West over an ad that features the singers allegedly endorsing the site.
Girls Gone Wild founder Joe Francis
Francis—often called the soft-porn king—has a long list of run ins with the law, but the most recent incident happened earlier this month after a minor car accident. According to reports, a woman's car nicked the door of Francis' Bentley, and the two began arguing. After the woman grabbed his cell phone out of his hand, Francis allegedly hit and shoved the woman to give it back. The police showed up and, though Francis ended up in handcuffs, he reportedly calmed down enough to avoid getting arrested.
Rice to Riches founder Peter Moceo
In 2003, Moceo founded a high-end rice pudding shop called Rice to Riches in New York City's Little Italy neighborhood. While the man was certainly passionate about making delicious pudding, he was apparently getting rich in a very different industry. In 2005, he was arrested and charged with being the mastermind of a staggering $22 million-a-year gambling ring—which was reportedly operated out of his chic pudding storefront some of the time. Although the underground activities stopped, Moceo is still selling more than a dozen varieties of rice pudding out of his suspiciously named shop.
Martha Stewart Living Omnimedia founder Martha Stewart
In one of the most memorable entrepreneur busts of all time, the craft maven faced nine counts of securities fraud and obstruction of justice. In 2004, she was convicted of conspiracy and lying to officials and ended up serving five months in prison. Although many thought she would never recover after being behind bars, Stewart took less than a year to polish her brand and make a full comeback.
Broadcom co-founder Henry T. Nicholas
It's a scandal made for the tabloids. In 2008, the technology billionaire, who is often painted as an over-the-top personality, was accused of several illegal activities, including giving cocaine and ecstasy to associates and having a secret "lair" in his California home to entertain prostitutes. Two years later, both the criminal and civil cases against him were thrown out for lack of evidence.
WikiLeaks founder Julian Assange
As editor in chief of the whistleblower website, Assange has landed in hot water more than a few times executing the company's goal to find and expose news leaks. In the last few years, the group released hundreds of thousands of sensitive government documents to the public, including some confidential U.S. diplomatic cablesin late 2010. He also has been accused by two women of rape and molestation.
Microsoft founder Bill Gates
OK, this one's just for kicks. In the 1970s, the Microsoft mastermind was arrested twice for road-related offenses. In 1975, he was reportedly arrested for speeding and driving without a license. In 1977, he was booked for running a stop sign. Not a huge deal, we know, but the second arrest produced what is now a legendary mug shot of the billionaire.