Oh My Fraud

Warning: This is a machine-generated transcript. As such, there may be spelling, grammar, and accuracy errors throughout. Thank you for your understanding!

Greg: 2023 was a good year for Omi fraud. We crossed the 100,000 downloads threshold. We released 25 episodes, including 17 case studies, including a two parter on My Hero, former hero Dan Ariely, five interviews with various researchers, fraud investigators and even a convicted fraudster. And we had two deep dives, one into wire fraud and the other into the current state of fraud in the USA.

Caleb: And today we're going to cherry pick the top [00:00:30] ten episodes, our favorites, the stories of fraud and corruption that made us the happiest. Do they make us happy?

Earmark: If you'd like to earn CPE credit for listening to this episode, visit earmark Cpcomm. Download the app, take a short quiz, and get your CPE certificate. Continuing education has never been so easy. And now on to the episode.

Greg: Hello and [00:01:00] welcome to Oh My Fraud, a true crime podcast where our criminals receive capital punishment, meaning the judge takes away all their capital. I'm Greg Kite.

Caleb: And I'm Caleb Newquist.

Greg: Uh, Caleb, before we get into it, like we've been doing lately, uh, I would love to read a listener review real quick, if that's okay with you.

Caleb: If you insist, Greg.

Greg: I do insist. In the earmark app, Joshua C writes this is probably the first CPE provider I listened to without the express objective [00:01:30] of getting CPE. Just about every episode is colorful and informative, whether I want to learn something or not. Keep up the good work and the f bombs.

Caleb: Feels like high praise.

Greg: It is.

Caleb: Yeah.

Greg: I feel like he's he's he's seen into our souls and he approves.

Caleb: Well thanks Josh. And tough toenails. You're getting CPE okay. You're getting it. Take it. We're glad that. We're glad that you listen. Listen first. Okay? [00:02:00] Yeah. Listener listening first is good. And, um, anyway, if you like. Oh, my fraud. With or without the CPA on the side, uh, take a minute to write a review and maybe we'll read it on the show. And, uh, if your firm is looking for some in-house ethics or fraud training, we do that. So. Yeah, yeah.

Greg: We also do keynote addresses at events and conferences. And don't worry, we are pros. We can work clean. We don't have to include any f bombs or s hits [00:02:30] or damn words.

Caleb: Bastard.

Greg: Bastard. Right. If you.

Caleb: If you want more info and if you if you have a list of swears that you're okay with, please.

Greg: Include those.

Caleb: Include those and then we'll respond with pricing and availability. Uh, email us at Omi fraud@imaqtpie.com.

Greg: So, Caleb, this is our first ever Year [00:03:00] in Review episode.

Caleb: Yeah, I talked you into it.

Greg: Yeah, I and I'm. And I'm here for it once.

Caleb: Yeah. Good.

Greg: I'm glad. Looking back over 2023, we had some great some fantastic cases. And I'm kind of I'm excited to, to, uh, to dabble back into them once again.

Caleb: Yeah. Uh, I am too. And just give people an idea about what to expect. We're going to talk about our favorite case. We're going to talk about our favorite interview because we did a handful of interviews. [00:03:30] And then we're going to talk about our favorite perp from the 2023 year of oh my fraud.

Greg: So no more messing around. Let's get into our favorite cases from 2023.

Caleb: All right, Greg, um, do you have any idea what my favorite case I do?

Greg: Because you wrote it in the script, but I didn't until just now when I scrolled down to see. Oh, really? Yeah, but I'm excited about it. That was a good case. [00:04:00]

Caleb: Yeah. It was. And my favorite case of 2023 was, uh, the title of the episode is High Stakes Fraud The Case of Easterday Farms. And it is remind Me someone. Episode 27. Um. Here's why. It's my favorite case. I liked that it was. I grew up, I grew up in, uh, in in in rural country. Yeah. As we have mentioned from time to time. And so the story of a [00:04:30] ranch, a ranching and farm operation that, that kind of maybe tickled my nostalgia, uh, you know, uh, nostalgia bone a little bit. So I like that our perpetrator, Cody Allen Easterday, he was the heir apparent to this family farming and ranching empire. So, I don't know, like, as far as perps go, I don't think Cody was. He wasn't. He probably doesn't even make my top five as favorite perp. [00:05:00] Right. But the story, the the bigger story of it all, I think was, was my favorite story. And so just to kind of get into it a little bit is any any rancher or farmer will gladly tell you, uh, agro agriculture is a tough business. Okay.

Greg: And now, just to just to be clear, you what's your experience with ranching and farming?

Caleb: Oh, almost nothing.

Greg: That's what I thought, didn't you? Wasn't your first job like picking out weeds out [00:05:30] of a corn patch?

Caleb: Yes. Yeah. So like I did various I mean, it wasn't my very first job, but I detasseled as a kid. Okay. Uh oh, I walked yeah, I walked soybeans, which involved, like, cutting down weeds with a big corn knife. Okay. Which is, which is machete, like it's machete esque, right. So, um, this, this case of Easter Day farms. We've got Cody, right? He's he's he's the he's running the business. And [00:06:00] what a lot of farming. What we talked about in the episode, we'll just mention briefly here is that a lot of farming operations or agriculture operations will will use futures trading right to, to hedge their businesses. Right. Yeah. Through because their products are commodities. Commodities are traded on futures exchanges. And they you know, they get locked into a price. And so then they'll set up some derivatives. Right. Which is a hedge. Yep. [00:06:30] They'll use derivatives to hedge essentially hedge their bets. That's just a kind of a colloquial way of putting it. But they're actually they are they're actually hedging. Yeah. Um, they're and operations so that if there's wild swings and prices. Yeah. Then they don't lose their shirts. They'll, they'll, they'll make, they'll make out on the hedge if they lose out on their product. Yeah.

Greg: Because I think tell me because this, this is how I remember that all going is if you're using them the way, like I guess I'm going to say the proper way for a rancher to [00:07:00] use them is you're saying, okay, like let's say cattle ranching, you're going to they say, I can sell all my head of cattle at the time that they will be mature enough to sell for this particular price, and then you back out of that, you kind of do your cost accounting and go, hey, can I actually do that and make a profit? And then you go, yeah, actually I can. So then you buy but then you lose out on like you said on the price swing. So if the price goes way up then [00:07:30] you're, you're going to feel like you got screwed because you could have made way more money than you did. But you have to talk yourself through that by going, oh, well, I didn't know if the price went way down where I would have, you know, lost my shorts on it as well. Right. So, so that that's how that's like the legit way that I remember ranchers should be using those sort of futures contracts right now.

Caleb: Fun fact lots of people who have no direct interest in a farming and ranching operation trade futures. [00:08:00]

Greg: Right. Like those bastards on CNBC.

Caleb: Yeah, I mean, people, people trade futures because it's very lucrative. It can be very lucrative. Yeah. Right. And so, uh, people who are successful at trading in futures are very comfortable with risk. They're good at managing it. And they they're good at minimizing their exposure to it. Right. And so that's how they're able to make lots of money doing that. Right. Because these these markets are highly liquid [00:08:30] okay. That's the other thing that I think is very important to understand is that. And by highly liquid I mean lots of money, easy to get money, right.

Greg: Not just orange juice futures.

Caleb: As.

Greg: Right. A highly liquid. That's not what you you mean, right?

Caleb: Leave that to Billy Ray Robinson, right? Yep. Right. Okay. Um, anyway, so. Yeah, people who trade futures, you know, as speculators, that's kind of that's kind of the other side of trading derivatives is speculation. [00:09:00] Um, they can make a lot of money doing that. And the possibility of making lots of money trading futures, uh, is extremely seductive, I would say, for a certain type of person. And Cody Easterday. Was one of those people. But Cody Easterday was very bad at trading futures.

Greg: He was he was so bad at trading futures.

Caleb: Cody Easterday was so bad at Trading Futures that he lost [00:09:30] hundreds of millions of dollars trading futures on the Chicago Mercantile Exchange. Yeah.

Greg: How how could he do that? How could you lose hundreds of millions of dollars?

Caleb: I mean, his business. You have to believe that, like, you know, they had a they probably had a big brokerage account because of the operation they had. Right? Yeah, he probably had a broker who would get him set up like. Yeah, man. But like your broker, probably even a big operation like [00:10:00] that. You and again this is a lot of speculation here. But you have to imagine the brokers the broker doesn't care. The broker is there to service the client. Right.

Greg: He gets a commission whether you lose money or not. Right. Yeah. Right.

Caleb: Even your and a big wealthy client that's good at losing money. The broker still doesn't care. Right. Because someone is winning on the other side of that trade. Yeah right. Yep. That's the thing. That's the other thing about futures trading is that on every trade there's a winner and a loser. Somebody makes money, somebody [00:10:30] loses money.

Greg: Yeah right. Zero sum.

Caleb: And Cody Easterday was losing a lot. Yeah he was losing a lot. And eventually you know this guy, he got in a bad enough situation that he decided to, uh, he he led a big buyer of his, uh, family businesses, uh, cattle, a big buyer of cattle, Tyson Foods. He led them to believe that he would sell them a lot of [00:11:00] cattle in the future. Small problem with that. There were no cattle. They did not exist. And so Tyson, thinking they were getting some cows, that they would turn into food. They paid Cody Easterday over $200 million for these cows that did not exist. Or I shouldn't say cows. That's a technical firm. But cattle they [00:11:30] pay. Tyson paid Easterday over $200 million for these cattle that did not exist.

Greg: Right. And that was. Am I remembering right? That was like an advance payment that they gave him. They're like, yes, here's like here's some money up front to make sure that you have the, the, the working capital to get these, get this cattle to get them to the finish line. And then we're going to pay you the rest once. We're kind of kind of like a if I remember right. It's almost like a book advance they give you here's your money up front and then you get more profit once the book publishes. These guys are like, here's some money up [00:12:00] front. Once, once these cows are ready to eat, we'll give you some more money on that end.

Caleb: Yeah, yeah, yeah. You're remembering it, uh, correctly or correctly as as well as I remember it. Right, right. Um, small problem again. Another small problem is Tyson eventually, uh, showed up at, you know, an Easter day, one of the Easter Day locations, and, uh, came looking for the, the cattle. And Cody yesterday admitted that there was no cattle. Right. [00:12:30]

Greg: Right. Didn't he just fold like, immediately? He's like, yeah, hey, we're looking for our cattle. He's like, yeah. About that. Uh, I, I, I thought they were here too, but I they're not. So just kidding. Yeah.

Caleb: And the problem is the problem is like, he was he was in a bad situation. Right. Like, I mean, it's kind of he he must have he must have thought that he could take that cash, get it into the Merc, you know, trade it and [00:13:00] win the money back like it's just. Yeah. Fucking gambling problem is what it is. Yeah. You know.

Greg: Except the.

Caleb: Steaks. Except the steaks were extremely.

Greg: High.

Caleb: Right? And, uh. Yeah, it it didn't work out. And, uh, the family farm and ranching operation went bankrupt and, um, sold to another, uh, farming and ranching operation. Uh, to the best of my recollection, that is owned by the Mormon church.

Greg: Greg, I believe I believe the Mormon church took over quite a bit [00:13:30] of that. And the reason why Caleb through to me on that one is because I live in Utah, where everything is owned by the Mormon church. Uh, yeah.

Caleb: If you're new to the show, Greg is, uh, the only, uh, non-Mormon in the state of Utah, and he's he's he's holding his own out there.

Greg: I like to say, uh, I'm not Mormon, and I don't ski, so I could be deported at any moment.

Caleb: Yeah.

Greg: Yeah, yeah. Okay.

Caleb: Uh, Cody yesterday was sentenced to 11 years in prison in October 2022 [00:14:00] and ordered to pay $244 million in restitution. Now, I have a little bit of postscript on this story, because that just kind of just minor updates. Um, on the Easter Day stuff, Cody Easterday sued Tyson Foods after he was after he went to prison, he sued Tyson Foods. And as best as I can tell, let me just let me I've got the story here. So let me just let me just read a little bit. This was from March [00:14:30] Tyson Foods.

Greg: Yeah.

Caleb: So he this is March of 2023. So just a couple of weeks after we, we released this episode. But here we go. And so this is from the Tri-City Herald. Quote, while the bankruptcy case for his family business has wrapped up, Easterday is now suing Tyson Foods for breach of contract to avoid paying the rest of the nearly quarter billion he defrauded from the company. Sounds strange right? Let me read on Easter Day is suing Tyson for alleged [00:15:00] breach of contract over there. Quote. Cody's beef branding deal, which saw Tyson sell premium beef to Nippon Ham in Japan using a marketing campaign centered on Easter Day from 2015 to 2020. The lawsuit was filed on behalf of Cody Easterday, rather than one of the family's businesses, because his attorneys say the branding deal was struck with him personally. Okay, so it sounds follow that.

Greg: It's so he had like a name, image and likeness. [00:15:30] Uh, contract with Greg.

Caleb: Kite was listening people. Greg Kite was listening very closely. Yes. That is my understanding of why he sued Tyson Foods.

Greg: Wow.

Caleb: It's now.

Greg: Unbelievable. It's like you have to fulfill your contract to use my name, image and likeness. And if you do use those, I still need. I mean, I guess that makes sense. If they're still using them to market their product, pay the man, pay the man his [00:16:00] money, I guess so.

Caleb: So here we go. Crazy I love fast forward. Fast forward to November 2023. Not that long ago, as of this recording, again from the Tri-City Herald, I'm quoting Cody Easterday's legal troubles have more or less come to a close. Nearly three years after the ghost cattle scheme to defraud Tyson was discovered and a year after Easter Day, was sentenced to 11 years in federal prison. All of his active court cases have been resolved after a federal judge [00:16:30] dismissed the lawsuits filed against Tyson over copyright and antitrust claims.

Greg: Oh dang it, I was hoping that would go Cody's way.

Caleb: Yeah. Unfortunately not. Um, so yeah. So there there's your little there's your little postscript on the case of Easter Day farms.

Greg: Well, Caleb, my favorite case from 2023 was the case of Fat Leonard, best name of a perp [00:17:00] that we've had on the podcast at all, period. But also just a feature film length, uh, a feature film, uh, narrative as we go through. So.

Caleb: So who? So if I may just stop you right there, who is playing Fat Leonard on this biopic?

Greg: Gosh, who would play Fat Leonard?

Caleb: Um, Hugh Jackman.

Greg: Hugh Jackman? Yes, [00:17:30] absolutely.

Caleb: That's kind of that's kind of an inside joke. But if you're a listener of the show, you know what I'm talking about.

Greg: Yep. I, uh well, okay. And and again, I would also say, uh, Samuel L Jackson would, would also crush it.

Caleb: Fine choice.

Greg: Not not not in terms of how he looks. He needs some prosthetics in terms of physical appearance. Yeah, but he'd still be amazing as Fat Leonard. So here's the story of Fat Leonard. Uh, this gentleman, he grew up in Malaysia. He took over his family business, uh, as a as a younger [00:18:00] man. Uh, and that family business was supplying merchant ships at port, uh, which then he was able to grow fairly quickly because the guy was just a gregarious person. Uh, and and was great. He had amazing people skills. So he met the right people, and he started winning contracts with the US Navy. And at that point, he launched a company called Glenn Defense Marine Asia. And what Glenn Defense Marine Asia [00:18:30] did for the US Navy is primarily they they they they took care of those ships when they came to port, including the dirty work. So when a when a Navy ship comes to port, they need everything. Uh, and Fat Leonard supplied them with everything from water and fuel to helping them get out of sticky situations like bar fights and sexual assaults. Uh, and he was he was good at what he did and and part of it. Caleb, I think you remember [00:19:00] this. Is that, like, a lot of the like, we're getting into the bar fights and sexual assaults. Like when sailors would get in trouble with the authorities while they were at port. Uh, yeah. The US Navy just wanted those problems solved and didn't, but but also wanted distance from those problems. So Fat Leonard was providing a very valuable service by just going, don't worry, Fat Leonard's going to take care of this problem.

Caleb: Fat Leonard is here [00:19:30] to help.

Greg: Yeah, yeah, and he would and he and like I said, he was he was great at it. He he ended up opening multiple ports, uh, including Hong Kong, Singapore and Bali. And if you remember, uh, he, he started all this stuff before, uh, the terrorist attacks of 911. And not only that, he started it before, uh, the attack on the USS Cole, which happened in Yemen. If you don't remember that there was a little tiny boat that started approaching, [00:20:00] uh, the USS Cole and the people in the Cole had no idea that that boat had 400 pounds of plastic explosives that blew a hole in the side of the USS Cole. Uh, several US Navy sailors were killed. Many more were injured. It was a it was a beginning of a, uh. Well, it was it was on the front end because it was about a year before the nine over 11 terrorist attacks. So because of the USS Cole attack, uh, the Navy started looking to to contractors [00:20:30] like Glenn Marine Defense Asia to not only supply the ships with the things that they need, but also to get to actually protect the ships while they were at port, which seems weird because you go, this is the Navy. Why does the Navy need to be protected at all? Can't they protect themselves? But think back on that USS Cole situation.

Greg: The Navy can't be like, hey, don't come any closer, little [00:21:00] boat that looks like a fishing boat or we'll blow you out of the water. You can't. If the Navy not a good look. No, that'd be a horrible look. So they. But so again they're trying to they're trying to push off the dirty work of being of the let somebody else be the bad guy when we're at port. Uh, and and uh, Fat Leonard again did a great job. He developed a thing called the Ring of Steel, which, uh, eventually started off as, like, uh, 50 gallon, uh, empty 50 [00:21:30] gallon drums that he'd seal. So they float, and he connected him with a bunch of cable, and he just, like, somehow opened them up and have a big Navy ship, uh, dock, like, not dock, but, like, anchor inside of this ring of steel. And then they just say, no ships can come inside this ring and eventually progressed to where it was like four barges with heavy gauge cable between those. So you kind of open up the the cable. The ship had come in between the barges. They'd shut it and then you'd be more protected. This guy even went so far. He had he had, uh, frogmen [00:22:00] that would go scuba diving underneath the ships to make sure there was no, no, no threats underneath them.

Greg: He went. He he was amazing. He did he did these amazing things. He started amassing these things called Bravo Zulus, which were basically letters of commendation, uh, from the Navy. He actually, uh, in a more recent, uh, article that I read, since we did the episode, I found out he even got a letter of commendation from President George W Bush. That's how how good this guy was at his job. Um, the other thing [00:22:30] that he did is he, uh, he bribed, uh, Navy officers to come to his ports, which I think is understandable, because my understanding of life at any port is that it's kind of the underbelly of civilization, for whatever reason. Uh, in these ports where you're, you've got, uh, organized crime, you've got you got corrupt government officials. So you're probably bribing people all the time just to be able to [00:23:00] operate on the docks. So that was sort of the environment that Fat Leonard came up with. It came up in and he started applying those same tactics to just getting more business to his, to his ports that he operated. So if a decision maker within the Navy was out there, Fat Leonard befriended him, started giving him gifts, uh, started giving that person gifts like trips or meals or booze or cigars or even prostitutes.

Greg: Uh, and [00:23:30] with that, he gained not only their business, but he also gained their support. So what he started doing is giving inflated invoices to the Navy for the services that he provided. Uh, my favorite story of how they figured out one of the, uh, invoices was inflated is, like I said, he had to. He had to supply the ships with fresh water for while they were out at sea. And some lieutenant on one of these boats was looking over an invoice [00:24:00] and was like, this invoice. He overcharged us for water. And they were like, how do you how I think even I think actually even Fat Leonard was. How how dare you challenge me, you stinking lieutenant! How why do you think that that invoice is inflated? And he was like. Because you billed us for more water than our ship can hold. And and and apparently he did this a lot where typically he wouldn't push back like that. Typically if he gave an invoice and it was inflated and somebody's like, hey, this [00:24:30] seems like too much like, oh yeah, what should it be? And he just change it and be like, cool, no harm, no foul. Um, but, uh.

Caleb: But if there's more water. Then the ship can.

Greg: Hold, right? That's a hard maybe.

Caleb: Maybe you could just maybe dial it back a bit.

Greg: Right. That's. Yeah, that's some a pretty aggressive invoice tampering. But what we saw also is that the farther away from nine over 11 we got, the more uh, the, the, [00:25:00] the spending on defending our Department of Defense started drying up. So people were, uh, right after the terrorist attacks, people were willing to pay, the government was willing to pay, and taxpayers were supportive of this. Pay whatever you need to, to make sure that our troops stay safe. The further from nine over 11 we got, the less that was the case. So people started scrutinizing these invoices more and fat lenders started getting in trouble more. As a matter of [00:25:30] fact, there was 27 different NCIS investigations that were initiated against Fat Leonard and 27 investigations against fat into Fat Leonard that got dropped. Uh, but NCIS investigation number 28 is where things got awesome, because first off, they they talked somewhat. They talked a Glenn Defense Marine Asia employee into wearing a wire to a meeting. At that meeting, another Glenn Defense [00:26:00] Marine Asia employee confessed to inflating invoices. And that got back to the NCIS, obviously, because they were the ones who gave the person the wire. But what you didn't know up until now, fat Leonard had a mole inside the NCIS. So this guy, he gets this information about the the the person confessing to inflated invoices, and he goes to Fat Leonard and says, hey, you've got actually two problems.

Greg: First off, one of your people is on tape confessing that these invoices [00:26:30] are intentionally inflated. The other thing that you didn't know about is we just had an angry wife of a naval commander who just dropped off a bunch of information about you because apparently you've been supplying her husband with prostitutes. Not a great way to get on the good side of anyone, of any spouse by getting hiring prostitutes for the other spouse. So this guy, the mole, tells Fat Leonard about [00:27:00] her name was Marci Miscovich. She he tells her about that, about the Marci Miscovich situation. Her husband, Commander Michael Miscovich, was, uh, was one of Fat Leonard's cronies, obviously. And the mole tells Leonard, he says under no circumstances should you contact Commander Michael Miscovich right now, because clearly everybody's going to be watching everything right now. So Fat Leonard immediately contacts Michael Miscovich and says, hey, [00:27:30] what's up? What's up with your wife? And but the NCIS was already monitoring Michael Miscavige's emails, so they saw Fat Leonard asking Michael to explain what's going on with his wife. And they're going, how the hell did Fat Leonard even know about his wife coming to us? Because she just did that. And there's no way that he would know that unless, oh, no, we've got a mole. So the NCIS plants fake information in their own servers, saying that this investigation [00:28:00] number 28, was also closed against Fat Leonard.

Greg: The mole sees the fake information, contacts Fat Leonard and says, hey, looks like everything blew over. Once again, you're in the clear. Fat Leonard says, awesome. I'm going to go to San Diego to try to pitch for more contracts with the US Navy. He shows up in San Diego. He immediately gets arrested and goes and gets sent to jail, where he decides his whole his whole game is he's going to he's going to strike a plea bargain, and he's going to rat out every [00:28:30] single officer in the Navy that's ever received a bribe from him, which was like the entire Seventh fleet, which is in charge of the Pacific Ocean and, and and Asia. So he has dirt on all these people, including I mean, it gets pretty crazy where he has he's telling stories of where he had a hidden camera inside a karaoke machine at a party that he threw that was a party complete with booze and prostitutes that devolved [00:29:00] into a full on orgy. So he's saying that he has youporn like material on naval officers. Uh, so everybody is all concerned about all of this. Like I said, he goes to jail. He's in jail while he's, uh, testifying against all these naval officers. He ends up getting purportedly, uh, liver cancer. And at that point, he's allowed to leave the prison and go to house arrest.

Greg: But he has to pay for [00:29:30] his own house, and he has to pay for the security for his own house. And he's doing that and he's continuing to testify against these naval officers. It's, uh, 18 days before. For he's supposed to be sentenced and all of a sudden, poof, he's disappeared. They can't find Fat Leonard. Turns out he cut off his ankle bracelet. He fled to Mexico. Then he went from Mexico to Cuba. Then he went from Cuba to Venezuela. And in Venezuela, it sounds like he's on the tarmac, walking towards a set of stairs [00:30:00] to get on a flight to go to Russia when Interpol jumps him, because there's a red notice on him and they take him to jail in Venezuela, but he can't there. Venezuela and the United States, not friends, non simpatico. And they're not going to give Fat Leonard back to the US. They're going to keep him keep him under lock and key. But they're not going to give him back what we found out. Well here's here's how all those cases, uh, worked out against the naval officers. Uh, more [00:30:30] than two dozen naval officers pleaded guilty to taking bribes to defraud the Navy. And even a rear admiral was sentenced to 18 months in prison, making him the first ever Navy admiral to be incarcerated for a federal crime.

Caleb: That's the kind of history you don't want to make.

Greg: That's that's it exactly. Uh, but what's fun, Caleb, is this story also has incredibly recent updates. Uh. That, apparently. Like [00:31:00] we said, there was more than two dozen naval officers who pled guilty. But since then, and that was in that that all transpired like he he bounced out of house arrest in September of 2022. So as of this recording, that was just a little over a year ago. Uh, since then and since we've done our, our our initial podcast about this. Uh, there have been multiple motions for mistrial. Uh, for mistrials, for the various, for these various cases. [00:31:30] And because of those motions for mistrial and the evidence that they have of of, uh, I guess, uh, yeah, of of the government mishandling these cases, the US government actually has reduced its charges for, uh, a handful of these people from felonies, uh, that included possible decades long prison sentences down to misdemeanors with $100 fines. So it's it's basically [00:32:00] like you're going to jail for the rest of your life. No, wait. It's a parking ticket. And that's that's what's happening with that because of this, these these accusations of mistrial, which again, apparently the US government is going yeah, we kind of screwed this up. One one defendant, uh, who was who was pretty high up in the, in the, in the US Navy who got caught up in all this. He's quoted as saying China couldn't have done as much damage to the Navy as the prosecutors did by some of these false allegations. [00:32:30]

Caleb: I'm a little confused. Was all this corruption? And like, it was real, the corruption was still real, right?

Greg: Yeah, the corruption was absolutely real. The the thing was, the prosecutors were being too aggressive in how they were presenting the evidence in the courtroom. And apparently they had we're talking about like millions of documents that they had gathered, uh, from Glenn, defense, Marine Asia and different sources in their cases [00:33:00] against these naval officers. And, and and you had people testifying saying, hey, I've gone through all the data and then people going, you've gone through all of it and them going, yeah, I've gone through all of it. And and then they do the math and go, yeah, you it would take you 23 years of reading these documents, uh, uh, 24 hours a day to actually get through these documents. And that, that was, that was a part of, of, uh, apparently that was part of the [00:33:30] the. The linchpin for the mistrial stuff sticking in the US government backing off. I don't know a whole lot about legal procedures because that.

Caleb: It sounds like. Is it? Yeah, it sounds like it could be technicalities, but it.

Greg: Is that it definitely feels like technicalities. Everybody's aware that there was a lot of bribes going on, but it was technicalities with how, like I said, apparently how aggressive the prosecution [00:34:00] was going after them based on the information that they had, they were making, uh, inflated claims or claims. They were making a lot of assumptions with the claims that they were making against a lot of the defendants.

Caleb: And do we have a sense what did you find out, like what's going to happen to Fat Leonard?

Greg: Oh, Fat Leonard. Yes. Well, we had an update literally yesterday about what's up with Fat Leonard. He finally. Well, and I'm not sure if he if he was finally extradited to [00:34:30] the US yesterday or they just finally told everybody that he was extradited to the US yesterday. But regardless, one way or another, the story just dropped yesterday. He's he's either coming back or he is back now, uh, there was a prisoner exchange that the US had with Venezuela and and one of the prisoners that the US got was Fat Leonard. So he's he's back over here and he's going to be, uh, a sentence. I mean, I think his case is closed. All he was doing was awaiting sentencing. I'm sure [00:35:00] there's going to be more charges against him now that he's fled prison and tried to escape through multiple countries, but, uh, I'm sure that it's off to jail for him. Plus, people were skeptical about the whole liver cancer situation, and I think that that's a reasonable thing to be skeptical about. If somebody is able to just run from San Diego to Mexico to Cuba, to Venezuela and then be planning on heading over to Russia, it sounds like [00:35:30] he's not in. He's not frail.

Caleb: Right.

Greg: So that's the case of Fat Leonard, I loved it. Great story. So those were our two favorite cases from the year. Caleb, before we get into our two favorite fraudsters for the year, we did several, uh, interviews this year. What was just real quick, what was your favorite, uh, interview and real quick explanation of why?

Caleb: Yeah, my favorite interview of the year was Steve Thomas. [00:36:00] And that is episode 32. And Steve is an attorney. He's a litigator, and he's had a lot of success suing Big Four audit firms for their failure to detect fraud. And we talked to him a lot about we talked to him about a lot of different stuff. Um, but also I think one of the the main things or the main takeaways from that that I thought was super insightful is how he and his partners figured out how to be how to successfully sue these firms. And [00:36:30] he has he has a great explanation of that. And so I highly recommend that one. And I guess I'll just an honorable mention is also our interview with Mike Schaub, who is the who is an ethics professor at Texas A&M. And that's one of our most popular episodes this year. It's episode 37. Um, so I also I also really enjoyed talking to Mike Schaub as well. What about you, Greg? What what interviews did you like?

Greg: Hands down my favorite episode of of the year. My favorite episode of our entire [00:37:00] podcast to date. Uh, episode 28, where we interviewed Nathan Mueller. One of our earliest episodes was about the fraud that Nathan Mueller, uh, perpetrated. He stole $8 million from his employer, which was the insurance giant ING. But it's so cool to me to get all of the inside story of what he was thinking and what he was doing, and being able to ask him questions about specifics from the case that was like this didn't quite make sense. Explain [00:37:30] this to me. And and yeah, just so, so amazing in terms of of what he did, I loved some of the rules that he set for himself, for how he would spend the money that he stole. And my favorite question that, that, that I asked him was, uh, were were you having a great time with that 8 million bucks? And then you asked a great question where you were like, uh, so you were because he made it sound like he was convinced that he [00:38:00] was going to be caught and that he was going to go to jail. And you like you you forced him to answer that question point blank. And he was like, yep, pretty much. So, uh oh, wow. Yeah. He was he was miserable, even though he had I.

Caleb: Remember him being miserable. And I definitely remember him being miserable.

Greg: And he absolutely he was absolutely convinced that it was just a matter of time. He said if he maybe only stole a million bucks, he could. He'd probably still he would have gotten away with it.

Caleb: He got away with it.

Greg: 8 million bucks wasn't going to happen. So amazing. Amazing story.

Caleb: So really nice guy too. Like [00:38:30] I really enjoyed he I mean, I don't know, there was just there was something unassuming about him. And I think that's probably why he got away with fraud for so long, because he was kind of, you know, he had this kind of unassuming way about him. But also, you know, I think we talked about this a lot in other episodes, but, uh, yeah, even, um, you know, any anybody's capable of this. But also, he was very frank about certain things, like he, he liked money. And so he wanted he wanted to project [00:39:00] a certain, uh, image of success. And he, he, he, he figured out a way to get money and project that image that he wanted to do. And so, yeah, it was a it was a great interview.

Greg: My my take is exactly opposite of yours, I think. He was such a nice guy because I think he did a lot of work while he was in prison, just work on himself because he said, yeah, yeah. When he was deep into it, he was an he, he was like he said [00:39:30] he was an asshole. And yeah, he did say that. Yeah, that he was just angry and mean and brooding and he was an ass. He didn't say asshole, but that's clearly what he was describing was himself as an asshole.

Caleb: You're probably right. Like I should say, like our experience with him was. Yeah. Was really was really nice. Like. Yeah.

Greg: Like, but it's also but again, it's, it's such a cool picture where it's like, oh people can change and that's. Yeah, for.

Caleb: Sure.

Greg: There's nuance with all these stories and, and we'll get in and I'm going to touch on that just briefly a little later in the episode. [00:40:00] Oh but okay. Getting back but getting back online. What. Uh, well, who was your favorite perp from 2023?

Caleb: My favorite perp. Uh, I love all our perps. It's it's kind of like your children. I love them all. Love them all the same. Um. Uh, my, what I landed on, though, was a pretty recent episode. Uh, the DWI dude is my favorite perp from the last year. Uh, the billboard lawyer, Jamie Belleza, the DWI dude, the 420 dude. [00:40:30] Uh, he's the guy he had the the kitschy marketing to win. Clients accused of drunk driving and marijuana possession. He had the the bad car covered in marijuana leaves and his face and his phone number. Yeah, yeah. You know, he was basically, I think in the episode I put something like he's basically Saul Goodman. Uh, if Saul Goodman had been, uh, you know, in Texas rather than New Mexico, but maybe that's not a good I don't.

Greg: Know, he he. [00:41:00]

Caleb: Maybe doesn't.

Greg: Work. He struck me as being a really corny, uh, like, personal injury attorney, but instead of personal injury, like, because we all see those commercials on TV all the time. But instead of personal injury, he was DWI and marijuana.

Caleb: Yeah, very much so. And like he was and and. Yeah. And like he, he he wanted to help. He wanted to help regular people. That's how he kind of got into it initially. And he was able to create this kind of successful firm earning [00:41:30] I think, uh, at the high point, he, they were making like $3 million a year, but he went for broke. He went for broke trying to represent Colombian drug lords in high level extradition cases and. These these, these Colombian clients. They wanted him to bribe officials so that their cases would get dropped. And he had this partner, uh, Chuck Morgan, who kind of had these a lot of these connections. And instead of making these bribes. [00:42:00] They just kept the money.

Greg: Which is so ballsy. Why are you why why would you why would you mess around with a Colombian drug cartel?

Caleb: Right. And not even it wasn't. And that's obviously a big part of this, right? It's like they're they're fucking over drug dealers. Okay.

Greg: So yeah.

Caleb: Risky. But also these in these situations there are there are obviously people who do take on these clients and [00:42:30] they do actually represent them, true in extradition and stuff like that. But one thing that we learned in the course of researching this is that if you work with these people, number one, you got to get a license, okay. And there's a bunch of rules that you have to follow in order to, uh, uh, get paid by these, uh, accused, uh, like drug lords. And Jamie Belleza didn't get the license and he didn't follow any of these rules. [00:43:00]

Greg: Yeah, yeah, because it's drug money. It's like dirty, dirty drug money. And that's the reason why there's all these rules in place. Yeah. And and again, you just go. It seems so basic. It was like the he didn't he didn't pass go so he couldn't collect $200.

Caleb: That's it's weird man because it just he just had he had such a good thing going.

Greg: With the DWI in the.

Caleb: Yeah. Like with his firm. Like it just had this good thing going and he he kind of gets he kind of gets [00:43:30] enthralled with this guy Morgan about these. Yeah. You know these these tales of Morgan was, you know, he was DEA and and was maybe worked for the CIA. Had some, you know, just did this undercover stuff. And he thought, oh, you know, like, I don't know, it was it was it there was the the the lure of adventure, I guess. And but also making a lot of money. Totally. And so the way this all kind of came apart was, um, uh, he had one of his clients, Segundo Villota [00:44:00] Segura. Uh, he was suspicious because he had given these guys a bunch of money. Nothing had happened. He was still in trouble. So he filmed a meeting with them in his Colombian prison cell. Right. The bad.

Greg: Guy filmed? Yeah. Filmed the lawyers in his own prison cell.

Caleb: That's right. And so they they discussed this corruption scheme that they had talked about or fake corruption scheme from Morgan and and Malaysia's angle is like, uh, yeah, [00:44:30] we're doing that. Um, but not in so many words. You know, Belleza was trying to be as careful as he could be, but, um, ultimately that video ended up in the hands of the FBI. The FBI started investigating him, and they it really became obvious that he he wasn't being dumb about this, like, because they were making these cash deposits all over the country and, like, the way they they timed those deposits and the way the amounts of those deposits [00:45:00] were all, you know, designed to, uh, avoid detection. And ultimately, what happened was they set up this sting. They they nabbed Chuck Morgan, but, uh, but they jumped the gun on arresting Belleza. And this is such a funny, like, little exchange that we read about, but it went like this. Um, an FBI agent jumps out of the vehicle and aims his gun at Belleza and says, don't move, don't move. And he says, hey, man, I'm not doing nothing. And [00:45:30] the agent says, who are you? And Belleza just points the points to the picture of himself.

Greg: On his car. Yeah.

Greg: Um, and the agent.

Caleb: Uh, realized that he'd screwed up and he just let him loose, and he didn't explain anything.

Greg: Like what had.

Caleb: Happened. Yeah. What had happened that.

Greg: See, again, if we're talking movies in my head, that's like that. That seems like such a typical stoner movie, right? Like trope of of. Dude, I'm not doing anything, dude, who are you? [00:46:00] And then you just point at your big pot. The pot leaf. That's that's a face.

Caleb: On the side of.

Greg: A car. Right. Exactly. That's surrounded by a pot leaf. No, I'm not doing anything weird. Yeah, just look at my pot mobile. Yeah, I'm. I'm cool man.

Caleb: Uh, so Belleza was found guilty of money laundering, obstruction of justice, wire fraud and violation of the Kingpin Act. And he was sentenced to just shy of 15 years.

Greg: A lot of time.

Caleb: They threw [00:46:30] the. They threw the book at him.

Greg: Right. For for a not young gentleman too. That's a lot of time.

Caleb: Yep, yep. Okay. Greg, who's your favorite perp?

Greg: Oh, my. My favorite perp is is, uh, amazing. Uh, he comes from episode. What was it, 38? All that glitters is not fraud. Uh, so just to set before I even get to the perp, just real quick, a rehash of the case. It was about a company, a Canadian company called Brex minerals. They were [00:47:00] a junior mining company, which means they just did exploration. They didn't actually take, uh, minerals out of the earth. They were on the verge of bankruptcy. This was back in 1993. But then, like in a Hail Mary last ditch effort to actually make some of this company, they went to Borneo. Borneo is a big island. Uh, it's halfway between Australia and Vietnam. Um, it's it's actually four different countries claim parts of the island of Borneo. But these guys were in the Indonesian part, and their chief geologist was a dude named Michael [00:47:30] de Guzman. And Michael de Guzman out there on the island of Borneo says, hey, I just found a shit ton of gold. And the estimates of the gold, they started, they started. They were always in the millions of ounces. But at their peak, they got up to an estimation of 200,000,000oz of gold in the mountains of Borneo. So Brex stock, like I said, they were on the verge of bankruptcy. Their stocks were were trading at $0.12 [00:48:00] each at their at their minimum.

Greg: And after the after they found this gold, they went from $0.12 a share up to two to to a peak of $285.60 per share. Uh, so these guys were making they made all the money with this discovery of gold out there, uh, in, in Borneo. But like I said, Brex they could. They weren't a company that actually took the minerals out of the ground. So they had to partner with a real mining company that really [00:48:30] could extract the gold from the mountain. And so they struck a deal. That company went out to Borneo and they were like, hey, there's like zero gold here, that it wasn't like less than your it's like there's there is zero gold here. And so, uh, so the company Brex everybody was back in, in Canada this time they're like, hey, Deguzman, you got to go out there and you got to, you got to set these guys straight because we had tons of gold. Right? And he's like, yeah, we got tons of gold. So deguzman [00:49:00] he has to fly from Canada all the way halfway around the world to Borneo. And not only that, where this mine was, was in a very remote part of Borneo. So the last leg of his trip is via helicopter to get to the actual mining site in the mountains of Borneo. Deguzman gets on the helicopter, they take off and like a few minutes later, Deguzman jumps to his death out of the helicopter.

Greg: Uh, because apparently he he he had lied about all [00:49:30] of it. He had salted the core samples with apparently shavings of gold from, uh, like he he would just like like, I don't know, in my mind, he's just got, like, some kind of sharp implement, and he's just chipping away at cheap jewelry that he got at, like a pawn shop or something and just sprinkling those into samples, going, if this is just in my sample, think of how many flakes of cheap gold there are in this whole mountain. And so people got all excited. So he knew he was going and he couldn't defend this lie. So he instead [00:50:00] of confronting the people who who found him out, he jumped to his death. But that's why he is. Well, that's not why he's my favorite fraudster. What unfolds after that is why he's my favorite fraudster, because he falls to his death and all of a sudden that's a tragedy. And four different women come out of different parts of the world to say, that's my husband. He had Michael Deguzman had four separate families, nine children with four different women. None of these women knew about any of the other [00:50:30] women, and they were all married to him in these very in these different countries.

Greg: Not only that, it also turns out because because think about this. He jumps out of a helicopter in the middle of a, of a rainforest and in a remote part of of a remote part, right? A remote part of a remote part of the world. So it takes them a long time to actually find the body. And when they did, not only was it decayed because it's in the hot, humid, you know, swampy [00:51:00] jungle jungle of Borneo, but also like bugs have eaten at it, animals have, have eaten out when they get to. It's like there's no there's no skin on this. We can't get fingerprints. They couldn't positively identify the body. So there's theories that Michael Deguzman faked his own death to get out of this whole predicament while he was in this, you know, he's just like, hey, hey, helicopter guys, listen, I'm gonna I'm gonna. Once you're about ten minutes away, here's a body I [00:51:30] just bought from the morgue. Throw this out of there, and I'm just gonna. I'm gonna catch an Uber and go this way. But you guys go that way, and, uh. And the thing is, that starts to make sense. If you go, oh, this was a dude who was able to juggle four different families in different countries who had no idea about. So there's a theory that this.

Caleb: Doesn't make him a good job, but that doesn't make him a good juggler, does it?

Greg: Well, what if he if he's got four families that don't know about each other?

Caleb: I mean.

Greg: Those [00:52:00] are some skills. No, I'm saying that's some serious fraud skills. You can put you can put gold bits in core samples all you want and that's, that's that's like chump shit compared to tricking four different women into thinking that you're gone for a quarter of the year just because you're because work I yeah.

Caleb: How does how does how does one how does how does a person explain.

Greg: That I don't.

Greg: Know, but this guy did it. So that's why I'm saying this is also a guy that seems [00:52:30] like he could get a dead body of a random dude and chuck it out of a helicopter and go into hiding and be a okay. Apparently he had about 4 million bucks that he earned on the stock options that he had with Brex. So the theory is, well, in some of these, some of the wives were saying that after he was dead, they had like these mystery deposits of hundreds of thousands of dollars into their bank account. And they're like, that was my husband who's not dead, taking care of me still. That's that's what [00:53:00] they explained, which is crazy. So the theory is Michael de Guzman is still alive and well somewhere in Canada, living off the $4 million that he earned in Brex stock options. Amazing. I mean, is he a miserable human being? Absolutely he is. Did he give a great story? Oh my God, he gave the best story. So he wins for me. For favorite perp of our, uh, case. Is for 2023. We promised you guys ten [00:53:30] episodes to be at the top ones from 2023. We've gotten through seven, but we're out of time. So let's round out the top ten by I don't know, Caleb, what do you think if we just say episodes 43, 44 and 46?

Caleb: Fantastic.

Greg: There were some of the best. Go check them out. That's it for this episode. Uh, remember, when in doubt, fake your own death. Or if that's not possible, get your ass to Venezuela.

Greg: That's good advice.

Caleb: Also, remember, don't offer to sell anyone fake cattle and don't offer [00:54:00] to make fake bribes. I never thought something like that would have to be said, actually, but I guess it has to be said.

Greg: If you want to drop us a line, send us an email at oh my fraud at earmark Cpcomm Caleb, where can people find you if they want to interact with you directly?

Caleb: Uh, they can try LinkedIn. It's a slash. And then my name, Caleb Newquist. What about you, Greg?

Greg: Uh, just send me an email. Greg. Greg. Kite.com. Let's take out the middleman of these social media sites. [00:54:30] Just come at me, come at me, bro.

Caleb: Oh, my fraud is written by Greg Kite and myself. Our producer is Zach Franc. Rate review and subscribe to the show on your podcast platform of choice and if your platform of choice is earmarked, get the CPE. Do it. This is gonna this is gonna air, I think, just a few days before the end of the year. So it's not too late.

Greg: Cash in.

Caleb: Yeah, I know you're losing sleep over it, so you're gonna have to, you know, hustle.

Greg: Get it done, get it done.

Caleb: Join us [00:55:00] next time for more average swindlers and scams from stories that will make you say, oh my, oh my.

Greg: Fraud.

Caleb: Oh my fraud.