Con Man Page #7

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I'll tell ya, I don't

know if you ever saw him in church,

in front of his congregation,

he was masterful.

I mean, he had them

in the palm of his hands.

Thank you. Nice to meet you.

Hi.

Hi.

Nice to meet you.

Thank you for coming.

First time here? Yes.

Wonderful sermon, Pastor Minkow.

Pastor Barry, please.

And this is my wife Lisa.

Hi, it's a pleasure

to meet you.

Hi, I'm Ellen Scott

and this is my husband Don.

Don, it's good to meet you.

We drove down from Santa

Barbara. Santa Barbara?

Well, my sermons don't merit that kind

of sacrifice, but thank you anyway.

We're here

for another reason.

The past 10 years, we put all our

retirement savings in a hedge fund.

About $250,000.

I earned that money, working

31 years as a longshoreman.

Now we're worried about the fund

and thought you could check it out.

Ma'am, I'm sorry,

I'm a pastor.

I don't really know a

whole lot about hedge funds.

I'm really sorry. I...

Look, why are you concerned?

The manager just moved

his office to the Bahamas.

How long

have they been around?

Twenty years. They're worth around

$800 million, about 2,000 investors.

Twenty years, $800 million...

Sounds like you don't have a

whole lot to worry about there.

Please, would you check on it?

I brought the prospectus.

Why me? I'm not an expert

in these kind of things.

Everything was fine until I

tried to withdraw the money.

They've been telling me that

it's in process for three months.

I told my nephew about it

and he suggested I see you.

Your nephew.

Who's your nephew?

Mike?

Mike

You look great.

You look great.

Not even you can

pull off that lie.

Well, I'm not exactly winning

any beauty contests myself.

How you been?

I'll be a lot better if you tell

me you can help out my uncle.

Yeah, well...

This hedge-fund guy, Lewis,

right, he's telling me

he's getting monthly gains

of 1.5% to 3.5%.

Yeah, I don't think anybody's

quite that good.

Hedge fund, I...

You know, I got that letter

you wrote to me from prison,

apologizing for what you did.

Were you lying then

or are you lying now?

Look, Mike, I'm not

the same guy I was before.

I'm married. I got the

church. I got twins.

I teach the FBI in fraud

prevention in Quantico. I...

I don't really want to hear about

the good deeds of my old schoolmates.

You can tell me you're working

with lepers on an island,

my opinion of you

wouldn't change, Barry. Okay?

I'll believe the change

when I see it.

Anybody who's ever been in a financial

dealing with me has lived to regret it.

You know that.

Yeah, I'll take my chances.

Besides, your rates

are unbeatable.

Rates?

I don't have any rates.

Exactly.

It became just too much

of a temptation for him.

Barry wanted to kind

of do the Catch Me If You Can.

It was impressive. I

mean, he really knew his stuff.

And there you have

the six red flags for fraud.

Should you choose to

commit those to memory,

you will be able to stop

the next Barry Minkow

before he is the next

Barry Minkow.

That's all I have today.

Thanks for joining me.

I think Barry viewed himself

as a hero in a sort of twisted way.

Well, well, well.

If it ain't the preacher man.

Good to see you, Smooth. I see

the streets have treated you well.

You look good, my friend.

Yeah, right.

You get a chance to look at the

copy of the prospectus I sent you?

Does your PO officer know that

you're associating with an ex

'Cause I will tell him.

I'm just trying to figure out

how this Lewis guy has managed to

run a Ponzi scheme for 20

years without it imploding.

Either I'm missing something,

or he's a financial genius.

Little of both.

Can I get a beer

and a whiskey, please?

Look, I need your expertise.

You're the best there is.

You already got

what you're looking for.

In the prospectus.

They practically advertise for people

to invest their retirement money.

Yeah, so?

When people take their IRA money and

put it into a fund like this one here,

there are heavy penalties if you

pull out before you're 57 and a half.

They can invest the money all they

want, they just can't pull it out.

The perfect ingredient for

the successful Ponzi scheme.

Barry becoming a fraud

buster didn't surprise me.

You know, I always wondered if going

undercover was an opportunity for him

to reenact his favorite '80s

detective shows, and he had many,

or was it part of a larger plan

to actually do good this time?

I don't know.

I mean, I don't know.

Let me explain this to you.

There's just a slight difference

between lecturing these guys

and dodging bullets for them.

And it's not like you've been

trained exactly. Not to a fine edge.

Look, the guy has been around for

over 20 years and he's a ghost.

No license

to sell securities,

no assets held

in the fund's name, nothing.

Who the hell is this guy?

It's the only way.

I'll tell you what I'll do. I'll

send Matt down to the Bahamas,

and he'll record

the meeting.

If there's any misreps,

we'll move forward from there.

How's that?

Uh, just one last thing is,

I need Quantico to create me

a bogus bank statement

showing the church has $5

million parked in a money market.

Wait a minute, how do you know this

guy's gonna show up in the first place?

Any Ponzi scheme operator

desperate for new cash

would do whatever it took to get

their hands on new cash. He'll show.

Uh-huh.

So, you're asking me to give

the carpet guy

this bank statement

for $5 million.

What, am I crazy?

Ernest Hemingway said,

"The only way you can learn

"to trust someone,

is to trust 'em."

Ernest Hemingway said that?

I think so. Could have

been Churchill. Or him.

"Barry,

you don't understand.

"You're going undercover,

you're not a cop.

"You're a pastor."

He said, "Listen,

I'm uncovering fraud.

"I'm helping people that are getting

scammed and victimized by others."

I said, "Barry, working so

closely with the government,

"if you're wrong one time,

you're in trouble."

You say Don Scott's

a friend of yours?

Yeah, he's a member

of our church,

and the church has been

growing so much lately

that we've established

a building fund,

to purchase some land

to accommodate the growth.

We wanted to invest that money, have

it working for us until we build.

Well, it would grow here, I assure

you. How much do you have to invest?

A little over $5 million.

Those returns that you've been

generating, can they be corroborated?

Yes. We earn 18% to 40%

annual. A 20-year track record.

And 800 million? Eight

hundred million. Yes, correct.

$800 million fund.

You just gotta forgive me. Numbers

like that get me a little bit nervous.

You are aware of my past, I was

convicted of securities fraud?

I read about you, yes.

I like how you disclose it up-front

on your church's website, too.

I'll be happy to work with

you. We all make mistakes.

You were just a kid.

You got greedy.

I have the money market

account, bank statement

to prove that the money is waiting

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