How a $6.2 Billion Empire Crumbled: The Rise and Fall of Gary Winnick

The story of Gary Winnick — once the richest man in Los Angeles — offers a cautionary tale for investors, entrepreneurs, and anyone fascinated by the intersection of ambition, wealth, and financial risk. From building a telecom empire worth $6.2 billion to facing a massive debt burden and eventual bankruptcy, Winnick's journey reflects the volatile nature of high-stakes business ventures. His downfall, now culminating in the threat of foreclosure on his iconic Bel Air mansion, is a case study in how even the most powerful fortunes can unravel.

A Rise in the Dot-Com Boom

In the late 1990s, Gary Winnick was at the forefront of the dot-com boom, transforming Global Crossing into one of the most valuable telecom companies in the world. His net worth soared to $6.2 billion, and he became the poster child of L.A. luxury, splurging on a $94 million Bel Air estate known as Casa Encantada, along with a Malibu beach house and a New York penthouse according to reports.

. The telecom sector was booming, and investors were eager to fund high-growth companies with ambitious infrastructure plans. Winnick's success mirrored that of many in the industry — until the bubble burst.

The Collapse of Global Crossing and the Start of the Freefall

The dot-com bubble burst in 2000, and by 2002, Global Crossing filed for bankruptcy. The telecom company had overextended itself, with massive debts tied to infrastructure that wasn't yet profitable. Winnick, who had built his fortune on the company's success, saw his wealth vanish overnight. The bankruptcy not only wiped out his company but also left him personally liable for significant debt. Despite the fall, he continued to live a lavish lifestyle — financing his expenses with loans secured by his assets according to reports.

A Debt Spiral and Legal Battles After His Death

Winnick's financial troubles deepened over the years. In 2020, he took out a $100 million revolving loan from CIM Group, using his homes, art, and jewelry as collateral. By 2023, that debt had grown to $155 million. After his death that same year, his wife, Karen Winnick, discovered the extent of the debt and the fact that their most valuable assets had been pledged to lenders. A legal battle ensued, with Karen alleging that CIM Group had engaged in a "loan-to-own scheme," while the lender denied the claims as "fantastical." In late 2025, the lender moved to foreclose on Casa Encantada and the Malibu home — only to have the auction temporarily halted by a court stay.

Lessons for Investors and Entrepreneurs

The case of Gary Winnick highlights the importance of managing risk, especially in volatile industries like telecom and technology. His rise was rapid, and his fall was even more dramatic, serving as a reminder that personal wealth and business success can become inextricably linked. While his story is extreme, it underscores the need for prudent financial planning, asset diversification, and transparency in high-stakes ventures. For investors, it's a reminder that even the most successful entrepreneurs can face ruin if they overextend themselves — especially in a fast-moving market with high debt levels. At the end of the day, Winnick's legacy is not just a story of wealth and excess — it's a financial lesson for those who dare to dream big.