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Caleb Newquist: This is My Fraud, a true crime podcast where the defendants are found incredibly guilty. I'm Caleb Newquist. Greetings. Salutations. Hello. How do you do? I do fine, [00:00:30] I do just fine. Uh, thanks for thanks for being here. We have a fun episode today. It's another installment of our infrequent and not regular. Let's talk about a movie with fraud in it episode. I believe this is our third one. Zach and I discussed The Informant starring Matt Damon. That was last spring. That was just a bonus episode. And then for our 100th episode, we discussed The Accountant With Ben [00:01:00] Affleck, Jon Bernthal, Anna Kendrick, John Lithgow, and Jean smart. Um, that was fun. For this one, we thought we'd discuss a deep cut or a classic something out of the not so recent past. We like digging into, you know, old frauds around here. Some stuff from many, many years ago. And so why not talk about a movie from long ago? Right? So anyway, today, uh, on the podcast, uh, Zach and I discuss [00:01:30] Mel Brooks's debut classic satire The Producers from 1967. Now, uh, for those of you who weren't around in 1967, which includes Zach and I, uh, you know, I think my first experience of the producers was, um, was the phenomenon that was created when it ran as a Broadway musical. And that musical had Nathan Lane and Matthew Broderick, and it ran from [00:02:00] 2001 to 2007.

Caleb Newquist: It won a record 12 Tony Awards. I think that record still stands. Um, but anyway, that's how The producers was. That's how I even knew it was a thing. And then they released a movie in 2005, which also had Nathan Lane, Matthew Broderick, and also Uma Thurman and Will Ferrell. I haven't actually seen it, which is weird. But anyway, um, none of that. The point is, none of that would exist if it weren't [00:02:30] for the movie from 1967 that Brooks wrote and directed, and it stars Zero Mostel and Gene Wilder in the two lead roles of Max Bialystock and Leo Bloom. Uh, Mel Brooks. He won the Academy Award for Best Original Screenplay. It is Mel Brooks masterpiece, and if you have no experience with it whatsoever, then. Okay. Sorry, [00:03:00] but, uh, but you are listening to this podcast and you're probably wondering why we're talking about it. And the reason is, is because a fraud is at the center of the story. And, and Zach and I, we discuss it at length and it's, it's, it's, it's fantastic. And so rather than me just continue to go on, I think we'll just get into, uh, the, the conversation and, um, anyway, and you'll learn if you, if you don't know anything about the producers, [00:03:30] you'll learn all about it. Okay. All right. So here is Zach and I talking about the Mel Brooks 1967 classic The Producers.

Zach Frank: First impressions of the movie. What do you think?

Caleb Newquist: First impressions? I, I it's it's very campy, which I like. I don't necessarily find myself laughing [00:04:00] at like I don't like when I'm watching like something super campy like this. I don't find myself laughing a lot, but I do enjoy it. I kind of enjoy the absurdity of it. Or like, I think the word that you used at one point in the script, you call it, it's a farce. And I, and I do love that, um, kind of this over the top ridiculous kind of, uh, circumstance and yeah, just see it through to the end and then the laughs, you [00:04:30] know, we'll get it, we'll get to it later. But like the laughs came kind of later.

Zach Frank: You know what, let's just for listeners who might not know about the show, I've never seen the musical. They never watched any version, I guess let's read the logline.

Caleb Newquist: Okay, the producers, here's the logline to give you like a real succinct idea of what the story is. A stage play producer and his neurotic accountant devise a plan to make money by producing a sure fire flop.

Zach Frank: All right, so that's the logline. So [00:05:00] yeah, the two the two people there are Zero Mostel who plays Max Bialystock, and he's the Broadway producer down on his luck, and Gene Wilder, who plays Leo Bloom, who is the accountant, who is a typical accountant. High anxiety. Um, a little nerdy, I'd say. And, uh, yeah, yeah, they cast it. I, I think the casting in this is fantastic. Both great.

Caleb Newquist: Yeah. I mean, when you think about it's kind of one of those movies where like, oh, where do all these kind of cliches come from? And it's like, well, [00:05:30] this one is, this is one of those movies. Like it invented, it invented the, the, the, the timid, nerdy accountant, at least in the movie context. And I think, I think it's great. It is a little bit. It is it's very if you know Mel Brooks movies at all, you will find it familiar. Like you said, he's got a he's got a tone and like the dialog and kind of again, the campiness. But anyway, yeah, you're right, they, they come up with this kind [00:06:00] of absurd scheme.

Zach Frank: The first scene, uh, I think it sets up a lot with just the first scene. We're introduced Max Bialystock and he is, uh, seducing, uh, I don't know what you want to call it. Uh.

Caleb Newquist: Older, elderly, an elderly. Yes, an elderly lady.

Zach Frank: And we quickly learn multiple.

Caleb Newquist: Yeah.

Zach Frank: Uh, to get, uh, money he calls A checky to get money for, uh, a Broadway musical is what we learn. He's trying to raise money for Broadway play. I don't know if it's a musical or play, but he's, uh, basically just [00:06:30] instantly, uh, going one after we see one old lady leave and another one come in.

Caleb Newquist: That's right. Yeah.

The Producers Movie Clip: Don't forget the checky. Can't produce plays without checking.

The Producers Movie Clip: You can count on me, you dirty young man.

Caleb Newquist: There's just a train of them, and. Yeah, he's raising money and he's he's charming them, giving them attention that they probably won't get anywhere else. And, uh, yeah, so, uh, right away you're like, this [00:07:00] is a legit fraud because he's taking advantage of old widows who have just a bunch of money sitting around.

Zach Frank: Or he's like, he's a male gigolo.

Caleb Newquist: Yeah, right. Yeah. Whatever. Whatever it is. Uh, it's it's it it is, it is based in reality. So, um, that, uh, that was, um, that was, that was highly accurate. Yeah.

Zach Frank: So then, uh, I guess another way to say that is like, it shows us very, very early on that Max basically thinks transactionally [00:07:30] about people. He does not care about these women at all. He just is trying to get their money.

Caleb Newquist: Yeah, yeah.

Zach Frank: Now enter the room. Leo Bloom, uh, who literally enters the room when he's with one of these women. Yeah. Gene Wilder, he's sent to do the he sent to do the books, the accounting. Now, I have a question for you. You might not know the answer to this, but as an accountant yourself who.

Caleb Newquist: Former.

Zach Frank: Sorry. Yeah. Former accountant who would hire him like would it be Max hired him would like why or like I'm [00:08:00] just confused why he would need someone to do his books in the first place, right.

Caleb Newquist: Um. It's a good question. I would think that normally.

Zach Frank: To be fair, he's a very messy man. It could be that Max literally just hired an accountant himself because he's. Everything's a mess. Nothings are well accounted for. It's just all over the place. He's like, you know, so.

Caleb Newquist: My hunch, my hunch would be that the, you know, the producer would hire a firm or [00:08:30] hire someone as part of the crew to keep track of all the ins and outs for the production. Um, but if he's got multiple productions in this case, like he supposedly did, then it, you know, he's got a product, he essentially has a production company. And so he's trying to run a business. He's like, I gotta get myself together a little bit. And then he might decide to call whatever accounting firm he's familiar with. Yeah. In this case, Whitehall and Marx and say, uh, I need someone to get my, you know, to help me get my books [00:09:00] together. And then you can imagine him easily just forgetting, uh, that he did that. And then. Yes, then the kind of nervous, anxious accountant shows up and says, I'm here to do your books, sir. And he's like, what? You know.

Zach Frank: Yeah.

Caleb Newquist: Immediately suspicious.

Zach Frank: He calls him Mr. Tax.

Caleb Newquist: That's right. Yeah.

Zach Frank: So I guess very early on, uh, Leo finds a discrepancy immediately in Max's books. Basically, Max is raising money from these old ladies and selling percentages of the show. [00:09:30] And he realized that he raised $60,000 from these old ladies. But the play only cost $58,000. So there's $2,000 unaccounted for.

Caleb Newquist: Right. And he brings this to his attention.

Zach Frank: Yeah. He instantly tells him, uh, yeah. And then, of course, Max tries to minimize it. He says, like, who cares? The show was a flop. Like move some move numbers around.

Caleb Newquist: That's right. He's like, he went to the Turkish bath.

Zach Frank: So yeah, yeah.

Caleb Newquist: He's like, what's the big deal?

Zach Frank: Yeah. Uh, and then Leo being more of a normal [00:10:00] person, you know, he's like, no, he can't do that. You know, this is this is fraud if I do that. And then Max very quickly says, like bloom, I'm drowning. And he tries to manipulate to Leo Bloom, Gene Wilder's character.

Caleb Newquist: Yeah.

The Producers Movie Clip: I am being sung by a society that demands success when all I can offer is failure. Bloom, I'm reaching out to you. Don't send me to prison. Hey!

The Producers Movie Clip: Hey! [00:10:30] I'll do it. I'll do it, I'll do it.

The Producers Movie Clip: Thank you. I knew I could. Can you?

The Producers Movie Clip: That's all right.

The Producers Movie Clip: What? Nothing, nothing. Do it.

Zach Frank: Do it now, before we get back to the actual plot of the show. I wanted to give some background on Broadway accounting and just like, okay, basically what happens with shows. So Broadway financing is already messy and really relationship driven. Uh, almost any show these days [00:11:00] lose money. In fact, only 20% of Broadway shows recoup their investment. And when they recoup their investment, the 20%, it might not even happen on Broadway. It might happen on their other runs that they do across the country as well. When they make their they cut their costs way down. Their band is, you know, cut off a third of their band, hire less people. So it's very, very hard for Broadway show to be successful. Yeah. Um, another thing, just to be interested in some background, around this time in 1967, there was between 85 and 100 shows opening a [00:11:30] year. Uh, in today's numbers, there's about between like 40 and 45. Okay, so.

Caleb Newquist: Roughly about half.

Zach Frank: Yeah, 40 to 50%. Um, also just for some quick, you know, math, we just said that he raised $60,000. That's about ten X from inflation to today. So that'd be like $600,000 today. So that $2,000 discrepancy is more like $20,000. And the way that it works for Broadway structures, which is the same way we get to in this movie, [00:12:00] is producers and productions usually finance their shows from multiple investors buying percentage ownership interest. So producers raise the capital before opening because they need money to fund it, you know, to make the show, to get the director or the actors that they already have money. They don't just get a obviously they don't. Yeah, they don't get people.

Caleb Newquist: Aren't working for free.

Zach Frank: Yeah. They don't they don't get a loan. And then like, hey, I don't know. Now I think deals differ usually. Obviously it's after getting back your investment, then they then they give these people whatever ownership they potentially own of that money, right? Like of [00:12:30] the profit. And, you know, it's very expensive. Theaters are expensive. Your whole cast is expensive. Directors, costumes, band. It's like a, it's a very expensive thing. Broadway economics are not something you're going to to make money. You're not going into Broadway productions and be like, oh yeah, this is going to be a hit. I'm going to make a killing on this. Um, nowadays, you know, millions and millions of dollars to produce, uh, opening costs are very, very high. And, uh, even shows that when Tony's, which is like they're the Oscars for, for Broadway shows, [00:13:00] tons of those will even close down within the first year of opening. They it's a, it is a hard, hard business to be successful in. Um, anyway, that is just obviously of the outliers of things that run for years and years and maybe ten, 10 to $20 billion. But, uh, those are the insane outliers. And in general, it's a very, very hard business to be in.

Caleb Newquist: All right. So then it's with this kind of knowledge that even even then with, uh, [00:13:30] Broadway productions, with so many failures, it kind of hits, it kind of hits. Leo. The, the revelation kind of comes to him. He's like, oh, under the right circumstances, a producer could make more money with a flop than a hit.

The Producers Movie Clip: But under the right circumstances, a producer could make more money with a flop than he could with a hit. Yes, it's quite possible. If he were certain that the show would fail, a man could make a fortune.

The Producers Movie Clip: Yes.

The Producers Movie Clip: Yes. [00:14:00] What?

The Producers Movie Clip: What you were saying. Keep talking.

The Producers Movie Clip: What was I saying?

The Producers Movie Clip: You were saying that under the right circumstances, a producer could make more money with a flop than he could with a hit.

The Producers Movie Clip: Yes, it's quite possible.

The Producers Movie Clip: You keep saying that, but you don't tell me how. How can a producer make more money with a flop than he could with a hit?

The Producers Movie Clip: Well, it's simply a matter of creative accounting.

Caleb Newquist: And of. This, of course, gets Max's attention. So he wants to know more. And so Leo goes on to explain that if [00:14:30] you have a production that only costs $60,000, but you raise $1 million, you can put on the show for $2,000 and. But if it's a complete flop and nobody goes to see it, you just keep the money in the access of the production costs and nobody else is coming to see it. And so you recoup your costs quickly and you keep all the all the profit. And Max, of course, loves this idea. Um, [00:15:00] and so, and then they, they, they set off and so instantly, uh, Leo and Max or, or Max decides to make Leo his new partner. And then they go off, uh, traipsing through the city a little bit. Uh, I don't know, he, he invites him to lunch and then there's like a little montage of them.

Zach Frank: Uh, I like, I like that part because, uh, he tries to, like, court him to be his partner. And he's like, yeah, I'm gonna take you. I'm gonna take you to lunch. And then he gets him a hot dog because he has no money. That's what it's like. And he calls it. That's right. I forgot what he calls it. He's like, we're going, you.

Caleb Newquist: Say [00:15:30] Del Frisco's or something, I don't remember. Yeah, yeah, but you're right. They eat hot dogs. And he's like mhm.

Zach Frank: Yeah. 50 cent hot dogs in New York. 50 cent hot dogs. Yeah. And like this whole thing because. Yeah, basically what is Leo's, you know, Max has reason he talks about we didn't mention this, but he talks about at one point having six shows opening on Broadway or whatever. And now it's now it's nothing. He's down on his luck. Everything's failing him. And meanwhile, Leo is an accountant. Like, sure, it's boring, it's invisible, but there's nothing wrong with his life. There's nothing [00:16:00] like there's no, there's no nothing like big wrong. Now he does say like, why not me? I'm counting other people's money. I want my share. Right. So, you know, give a max credit. He's a very convincing man. I guess he's good at sales. There's like a moment of decision they show at the Lincoln Center fountain scene with fountains going off. Yeah, it's a great little scene. That's when he basically decides like he's in.

Caleb Newquist: Yeah. So Leo's so Leo. So Leo's in, Max brings him in. And so then it's off to, um, basically [00:16:30] to they then they have to, then they have to, then they have to, they have to find the the script. They have to find the play they have or the musical. They have to find the show that they're going to produce. And it's very important that it is a terrible, terrible story or it's a terrible play or a terrible musical, whatever it is, because if it if it isn't a complete flop, then they, uh.

Zach Frank: Someone will make money, someone expect to pay someone.

Caleb Newquist: That's right. The investors [00:17:00] will, will be expecting a payout. And so they, the next scene of them is doing what many producers do, which is reading script upon script, upon script, upon script, upon script. And like, yeah, they're they're just sitting in Max's little, uh, you know, uh, office, shabby, shabby office and reading these scripts and, uh, they land on one. Uh, I don't, [00:17:30] I mean, I, it, I mean, this is the genius of Earl Brooks, but they land on one. And it's called springtime for Hitler, and it's ridiculous. It is so ridiculous.

Zach Frank: Yeah.

Caleb Newquist: So anyway. Yeah. Go ahead.

Zach Frank: So yeah, the play They Land on Springtime for Hitler is not written as a comedy. The writer is a former German German writer. Actually, here's a fun fact. Uh, the original actor who was supposed to play the writer in the movie was Dustin Hoffman. [00:18:00]

Caleb Newquist: No way.

Zach Frank: Yeah. And Dustin Hoffman, Mel Brooks, he he got he got offered to audition for The Graduate. Mel Brooks was like, oh, he's never getting that. So he let him go on the audition. Yeah. Got the graduate. Had to drop out to recast it now. Uh, which is funny because.

Caleb Newquist: A good story.

Zach Frank: The actor they ended up casting is a bigger man who's very, like intimidating with physically and obviously Dustin Hoffman ever. Uh, so it became a different character, but I think that actually worked really well for the character. But it is interesting.

Caleb Newquist: It did.

Zach Frank: So anyway, they kind of just have [00:18:30] to find so that they get the writer to agree to it, and they have to fake like being, uh, agreeing with his values a little bit. It's a good scene. Yeah. Um, and for every single, like, role they have to fill, they're trying to do it as the worst they can. They cast a flamboyant director who generally, like, loves the place, and he finds an angle. He can take the play where he's like, he loves it. Uh, that's a funny scene. And then casting the they like Hitler. The, the guy they ended up casting is someone who walked into the wrong audition and like, he's like, oh, just audition anyway. [00:19:00] And then, uh, I love Max. He yells out after he finishes his song. That's, uh, Hitler. Yeah.

Caleb Newquist: Yeah. And I mean, it's actually even before they, they, they do the casting scene. It's pretty hilarious because they open up in the theater and there's all these guys with Hitler mustaches, and they're all on the stage and they're mostly dancing. And so there's these guys like in leotards and like, one guy doesn't have a, is doesn't even just he has basically a speedo [00:19:30] on. And there's these guys like dancing around, but they are all wearing these Hitler mustaches. And they have that terrible like Hitler haircut. And it is kind of this hilarious scene. And again, the movie is a farce. And so like to have the idea that there would be this many, uh, artists, uh, desperate to be part of the next big production, uh, willing to, uh, you know, uh, be Adolf Hitler in [00:20:00] the play is, is pretty great.

Zach Frank: Yeah. Before we get to the next part of the story, I want to talk a little bit more about the actual scheme, step away from from the movie, because I think I talked to you about this before, even watched this, how it just again proves how smart Mel Brooks is. I honestly think that this is one of the smarter fraud stories that we've covered, like in terms of just actual ideas for fraud. If I if like, you know, we cover tons of stories, the idea of this one is smart, like creating [00:20:30] a play that you know will be a flop, that you know, will be like, you know, not successful a failure. So yeah, a failure, it gives you basically gives them an exit out of this fraud from the get, they have an exit plan, an exit strategy. How many of these frauds have you covered? We've talked about Rita Crundwell got caught when she eventually went on vacation. Someone else had to cover for her bank account. Same thing with, uh, the Santa Cruz County treasurer. Elizabeth. Uh, I don't remember her name. I think that's it.

Caleb Newquist: Yep.

Zach Frank: Um, and so many of these cases, we, you [00:21:00] know, the fraud becomes what traps them. They're trapped in their own devices. Like they can't get out of it because of, um, getting out of it would open them up for like someone else finding out about it. This one basically your play fails. No one's ever going to ask for their money because they know there's nothing to recoup. Uh, no one knows that. Yeah. These people don't know that. They raised $1 million. Everyone's thinking, oh, we raised I contributed the $60,000 it cost. Like they don't know that there's, you know, all this extra money. So no one's ever asking anything to anything back. They could. The [00:21:30] play fails, you know. They disappear. They have their money. It's done. It's so much smarter than so much of the things we've covered, which is just hilarious to me and I.

Caleb Newquist: Yeah. And I think part of the reason that makes it a good kind of framework for a fraud is, as you said, there's an exit plan. Yes. And it's a relatively easy one. Whereas, you know, the examples you were talking about were embezzlements. It's like the for the exit plan for an [00:22:00] embezzlement is like what? Fake your own death. Like, what are you going to do? Like to get out of that situation. And in this case, it's like, ah, you know, it's a risk. A, a production, a, a theater production is a risk. And you, you take on that risk, you risk losing it all. And you and people go into it knowing that. And if you it's a surefire flop. If it's if it's a complete disaster, it doesn't make any money. Then they know they're not going to get their money back. They know they're not going to recoup their investment. And they [00:22:30] certainly know that there's not going to be any profits to be divvied up. Um, amongst, uh, the, the investors.

Zach Frank: Um, and at the same way, it's also smart, the same way. It's also smart is compared to typical Ponzi scheme where again, there's no exit strategy, you're always going to have to recruit new investors to cover the old ones. You pay out like, you know, okay, so, you know, I raised $1 million for a fake thing, but like some people ask for distributions, they want to get out of it. So I have to raise more money to fill in that hole and then keep on raising more money, more. Bernie Madoff had no dying. [00:23:00] That was his exit plan. You know, like Bernie Madoff was going to get away with it until he died. Uh, yeah. There was nothing. You know, you can't pretend like, oh, an entire fund just failed and lost everyone's money, especially a diversified fund. This one is such a simple like, yeah, the it, the play was a, it was a massive bomb. It's over. We have nothing on paper.

Caleb Newquist: Just reading the script. You're like, this is awful. No one's going to like this. Yeah. And I think and then so what we haven't talked about yet, but which is kind of important is [00:23:30] that you when you're raising money for a production like this, you know, the, it's usually spelled out like what your share of any profits would be. Like that's explicitly just in any kind of like, uh, kind of, um, uh, similar type of investment. Like what you stand to gain is spelled out and what these guys did, what Max and Leo do is that they sell more than 100% interest in [00:24:00] the production.

Zach Frank: Um, a lot more.

Caleb Newquist: A lot more, a lot more.

The Producers Movie Clip: This is Sarah Cathcart. She owns 50% of the profits. Mrs. Virginia Resnick, she also owns 50% of the profits. Mrs. Eleanor Biddlecomb. She also owns 50% of the profits. Mrs. Elma Wentworth she owns 100% of the profits.

The Producers Movie Clip: Leah, how much percentage [00:24:30] of a play can there be altogether?

The Producers Movie Clip: Max, you can only sell 100% of anything.

The Producers Movie Clip: And how much of springtime for Hitler have we sold?

The Producers Movie Clip: 2500 0%.

The Producers Movie Clip: 2500 0%.

Caleb Newquist: Yeah, 250 0%. And that that reminded me of the case of the art dealer with Inigo Philbrick, where he was running a Ponzi scheme. And if you recall this story, he was an [00:25:00] art dealer and he was selling interests in pieces of fine artwork and was often selling in excess of 100% interest in those paintings. And, um, it's a, it's not quite as elegant. Well, maybe it is, but it didn't work.

Zach Frank: He got doesn't have the exit strategy. Still, that's the problem, right? People are gonna ask for the money back, right? Because the painting.

Caleb Newquist: The painting still exists. Yeah. Right. Right. [00:25:30]

Zach Frank: Well, actually, it's.

Caleb Newquist: Like, well.

Zach Frank: The good thing for him wasn't even selling some that he had no control or interest into. Like he was completely. Yeah.

Caleb Newquist: He would, he would forge, he would forge like bills of sale and stuff like that to say that he had taken possession of the painting or. Yeah, yeah.

Zach Frank: Yeah it was. I agree it's similar though, but just no exit strategy. Again, no exit strategy. You can't have a painting fail.

Caleb Newquist: Yeah. Yep. That's right. A painting can't fail. Oh. All right. So 25,000% interest sold in in springtime for Hitler. And so they've [00:26:00] they've raised all the money they can raise or that they wanted to raise.

Zach Frank: And, and I love, I love again, there's another montage. Like it's like, you know, Max with the old, old ladies, it shows. Oh yeah. Going to all of them and always getting the check. There's the one with the waiter. There's one like on a carriage. Like he's just, he has to get those checks from those old ladies.

Caleb Newquist: The ones eating ice cream and she's got a he's yelling into her hearing aid.

Zach Frank: Oh, yeah.

Caleb Newquist: Yeah. It's very um, I mean, I don't know, it's there's something kind of, uh, it's very, I guess [00:26:30] these days people call it cringey. Uh, you know, the kind of the dynamic between, uh, a kind of like shifty man in a, in a, in a lonely old woman with money. Um, but, you know, for the, for the premise of this, uh, for this movie, it's, it's perfect. And yeah, it's a, it's a funny little montage of, of, uh, scenes and yeah, so they get the money and then, uh, they.

Zach Frank: Finish, they finish like preparing everything. And it's, uh, opening night.

Caleb Newquist: Right.

Zach Frank: And [00:27:00] I love how they add this little detail that it just shows what type of person Max is and how like slimy he is. Anyway, uh, there's a critic there that Max tries to slip like 100. I don't know how much money it is. He tries to slip him like a bill, like to give him a good review of the play or whatever, and he knows his critic is never going to take it. He just wants to piss him off to even guarantee a worse review. It's like, yeah, he's a smart man. He's a smart guy. Like he's like, oh, you know what? You can piss off this critic more. If I try to bribe him for a good review, even though he's really just pissing him off to get a bad [00:27:30] review.

Caleb Newquist: That's right. Yeah. And it is, I mean, the I don't know when I lived in New York and I would I never went to an opener. I never went to an opening night, but I went to the theater quite a bit. And you know, it used to be probably in the late 60s, going to the theater was kind of a big deal. And so people are dressed up, they're wearing they're wearing like black tie up. The dress code is black tie. And I remember going to the theater in New York and, you know, you'd see, you'd [00:28:00] see college students in their sweats like it's the theater has changed a lot, I think, you know, for, for better or for worse. Um, but in any case, yes, it's a big opening night. And, um, yeah, there's, there's all these kind of, you know, social Socialite about town people. Yeah, that's kind of the. That's kind of the vibe in the room. And Leo and Max are very excited. They don't. I mean, maybe they're a little nervous, but like you said, they're doing everything they can to ensure its failure, including, [00:28:30] uh, bribing a critic. So yeah, things are looking good.

Zach Frank: The show opens, and, uh, I think springtime for Hitler is the big opening number.

Caleb Newquist: Yeah. Big opening number.

The Producers Movie Clip: And. And now it's springtime for Hitler and Germany. Deutschland is happy and gay. We're marching to a [00:29:00] faster pace.

Zach Frank: And, uh, they see the reaction of the audience is not happy. A lot of confused faces, a little bit of disgust, a little bit of, uh, anger, I'd say for some of them. So Max and Leo decide like, let's get out of here. Like, we don't want to see this because.

Caleb Newquist: They're back and they're watching. Yeah.

Zach Frank: It's gonna get ugly. Let's go across the street. There's a bunch of like these bars that are there. Yeah. So, uh, they go to a bar and they start, uh, drinking. They start drinking. Celebrating? Yeah, [00:29:30] yeah. Celebrating drinking. They say, um, Caleb, what do they they cheers of something, right?

Caleb Newquist: They they toast. They toast to failure.

Zach Frank: And Max.

Caleb Newquist: Max, uh, buys another round and then he buys one, uh, for everyone in the bar.

Zach Frank: Which is one, one extra guy.

Caleb Newquist: Which one?

Zach Frank: One one guy that detail too. Yeah.

Caleb Newquist: And he's, and he's, he's, uh, you know, he's barely awake. And, uh, yeah, they toast the failure.

Zach Frank: All right, so now when I describe the plan and how smart it was, I stand by that. But this [00:30:00] plan does have, you know, maybe one fatal flaw. Yeah. You know, one thing I don't know, Caleb, what would that floor be?

Caleb Newquist: The floor is that people love. People love the show.

Zach Frank: The. The floor is. If it's a hit, it's a hit. They have to repay 25,000% of investors who own the show. That's right. And, uh, I guess what they didn't expect was that by making a show so over the top and ridiculous that [00:30:30] people read it as a comedy, that the director made it as a comedy and the lead actor, the hippie actor playing Hitler, it's no longer like an intimidating, weird, like, you know, love letter to Hitler. It's a mockery of Hitler. In fact, so much so that the the writer of the play storms out during it and yells and he's he's pissed off.

Caleb Newquist: Yeah.

Zach Frank: So the intermission is coming up and Max and Leo are at the bar and they're like, oh, like, we have to hide ourselves. We don't know, like, we don't want to get beat by these people gonna be so angry. And all the patrons from different [00:31:00] Broadway shows, I guess around, you know, because they're not in the actual theater, they're across the street, come in and they're all like talking about, this is the funniest show I've ever seen.

Caleb Newquist: That's right.

Zach Frank: For a second, they're like, maybe there has to be some other show. They have some. They hold out some level of like hope. And then they say, who would ever thought like a show about Hitler would make me laugh? Whatever the line is. Yeah. Uh, and then.

Caleb Newquist: This will run for five years.

Zach Frank: Yes. It run for five years, and instantly Leo knows we are screwed. It's all over for us. We are? Yeah. This is the big. This is the worst. This [00:31:30] is the worst case scenario. This is as poor as it could have gone. It is over for us.

Caleb Newquist: Completely backfired. Yeah.

Zach Frank: Yeah. And, uh, I think they decide to go back in for the second half. I'm pretty sure they go in and they see people laughing cheersing standing ovations. Uh, the funny thing is, actually, I think in the bar, Leo instantly starts recalculating about that. Percentages sold. Yeah. That's right. He basically. Yeah. The second that it was a hit, the whole fraud came apart. Um, anyway, so that, that goes back [00:32:00] to like when I said how good of this is an idea. Still, I think it's much, much better than most of the frauds we covered. This was their flaw. They're the biggest flaw was going too far to the bad stuff, you know? Yeah. If if four out of five Broadway plays fail on their own, he probably could have just tried Broadway shows, not just plays. He probably could have just done anything and it most likely would have failed. Right? Yeah, that would have been the simple thing by going to such an extreme, obviously the point of the movie, but it was just too far that people like we wouldn't.

Caleb Newquist: Have we wouldn't have a movie if.

Zach Frank: Yeah, yeah, if he just gets away with it. [00:32:30] Yeah, yeah. Um, anyway, so it's, uh, you know, they realize they're screwed. Cuts back to the office. Leo as being, I'll say the man with more of a conscience, he decides, like, the only thing left to do is I'm going to turn myself in, maybe go, like, a little bit lenient on us. But I have to, you know. So he's tried. He goes to the office, he's trying to take out the books, and Max tries to grab them back. They're arguing. And that's when, uh, the writer who said the, the German who actually wrote it as [00:33:00] a serious play barges in. He's pissed off and tries to kill them, shoots at them with a gun. Uh, they have to convince him. Like, who's at fault? Is it the actors or whatever? And they decide like, oh, you know what we could do? We're gonna blow up the theater. Which yeah, gives them, I guess, another out. If the theater blows up, the play ends like that's it's another out. Uh, unfortunately for them, they do blow up something. I don't I don't know if he blows up with them still inside and doesn't quite destroy everything. Yeah.

Caleb Newquist: It doesn't quite work out.

Zach Frank: Yeah. And so it cuts to the [00:33:30] next scene and they are at court in handcuffs. And, uh, that's the next scene. And oh, my favorite part of the courthouse scene is it shows all the old ladies that Max raised money from very, very sad.

Caleb Newquist: And they're all weeping in the gallery of the courtroom. That's right. Yeah. Oh, yeah.

Zach Frank: And then it goes to Leo. Leo gives, like, a little testimony at the end before.

Caleb Newquist: Well, they find him guilty for. They find him guilty. Yeah. So they say. Ladies and gentlemen of the jury, uh, have you reached a verdict? [00:34:00] And he said, yes, we have, Your Honor. It's like, what is your verdict? And he says.

The Producers Movie Clip: We find the defendants incredibly guilty.

Caleb Newquist: Which feels like a very feels like a very Mel Brooks kind of piece of dialog right there. Um, yeah. But then yeah, Leo, Leo gets up to give a little speech.

Zach Frank: Yeah. And the only thing he says is like, he condemns Max. Like Max is selfish. He's blah, blah, blah, blah, blah, blah. And like, you know, all the flaws of him. But then he also defends him and says, but in the end, who did he hurt? Like basically [00:34:30] from this, Your honor.

The Producers Movie Clip: As I understand it, the law was created to protect people from being wronged. Your honor, whom has Max Bialystock wronged? I mean, whom has he really hurt? Not me, not me. [00:35:00]

Zach Frank: And he defends like me. I was like living a boring life or whatever. And I got to do something fun. The actors and the producer got to put on this show, and the old ladies, they got to feel loved and attention that they don't get or whatever. I don't know, it's like, uh, that part I'm going to argue against the rest of it. Sure. You can argue. And yeah. Um, I mean, I guess maybe the ladies, I don't know how this works with legally too. I'm not. I'm sorry. You don't know the law well enough, but like, could they potentially not press charges and then it's fine. Like if they're like, oh, we don't [00:35:30] need the profit.

Caleb Newquist: They understood they understood the risks of their investments, I don't know. Yeah.

Zach Frank: But the, uh, you know, the fraud is very obvious. If you are going to just go like, look at it legally that yeah, you raised way too much money for this. And the the old ladies are the victims. That's who you sold the money from. I guess if you want to get into it, the writer is a victim too, of his work. But I feel like that's true. That's a common thing in Hollywood. You know, you're never complete creative control over anything. Who knows what the actual end [00:36:00] product is going to be. But, um, yeah, anyway, so we talked about this a little bit, but I guess going back to a little bit more of the fraud we talked about, you know, Max's pressure is the financial ruin, loss of status opportunity. He realizes like, I could get elderly investors to give me this anytime I want. There's nothing I basically, I could raise as much money as I want, and it's not going to be a big deal. And also the opportunity of Leo explaining to him like, well, we could do a flop, make more money. And the rationalization is if [00:36:30] the show flops, no one like they were fine giving up this money with that risk. So who really lost? Who really lost here? Yeah, we're paying everyone to put it on. Who's really losing out here? Um, Leo, Leo's fraud triangle is a little bit weaker. We talked about this is basically just rationalization. I've spent my life counting other people's money. He says something like that. He has resentment and anger about it, but it's more just Max convincing him to be like, just do it. Uh, but I will say it doesn't [00:37:00] take much. I mean, I'm sure it's on purpose, but like, you know, it does not take much for him to just be, uh, down with committing a massive.

Caleb Newquist: Convinced, convinced that he wants to do it. Yeah, yeah. Why not me? Right.

Zach Frank: So, uh. All right, do you want to talk about some? I guess we should talk a little bit about, like, some of the accounting angles, which is funny that the accountant isn't accomplished to this. Yeah. So, you know, Leo is hired to do the accounting for Max, we think probably for Max. And then instantly he agrees to commit a small fraud. [00:37:30] Right. The first thing he agrees to from feeling pity is to commit the $2,000 discrepancy. And somehow like, okay, okay, I'll write it off for Max begging him, which we said would be about $20,000 today. Now, would most accountants do that? I would hope not. I would hope not. Most accountants would disagree very instantly about, you know, unaccounted for that.

Caleb Newquist: Uh, they categorize the Turkish bath as, uh, you know, uh, you know, uh, production expenses. Yeah. Some kind of production expense.

Zach Frank: Mental health, like.

Caleb Newquist: Yeah, mental health.

Zach Frank: Retreat.

Caleb Newquist: For [00:38:00] the producers.

Zach Frank: Yeah, yeah. Um, so obviously I don't know exactly what the mechanism would have been, but, um, an interesting parallel. We just did a case a few weeks ago on Lou Pearlman and Lou Pearlman's background was studying accounting. So I feel like this just shows that like they're always there. I mean, we, we also covered obviously, um, Nathan Mueller. So it just shows you that there is a mechanism where former accountants or whatever are more likely to know how to commit fraud and like do it well, potentially because [00:38:30] they know the mechanisms, they know how things are supposed to look. So it almost gives accountants a advantage to commit fraud and let's say an advantage compared to like a layman.

Caleb Newquist: Oh for sure.

Zach Frank: Yeah. And then another part that we talked about, we talked about this, but like being the old ladies, are they victims or not? Um, you know, elder abuse is a real thing. We talked about it a little bit. We had the pink collar crime lady, Kelly Paxton, on the podcast, who talked with you and Greg about it. So like, you know, elder elder fraud is a big, big deal. There's [00:39:00] tons of manipulation and abuse and, you know, they're lonely and desperate. And Max understood that he's able to manipulate them. Now again, it's more of a gigolo service then maybe it's okay. Um, also, we did an episode on the money doctor for older church people that he.

Caleb Newquist: Oh.

Zach Frank: He stole money from as well. That's right. So I feel like just, you know, the mechanisms of the fraud, there's a lot of parallels to real cases that we've covered, which probably also proves why this like movie hits. [00:39:30] It's like a realistic thing that like actual frauds are committed this way. The mechanisms and mechanics are like pretty realistic. And, uh, it's, it's a smart thing. It's funny. So that's why, you know, I'm sure our audience knows this, but we talked about, you know, the 1967 movie then became a Broadway. They made it into a musical, went on Broadway in 2001. And then 2005, it became they made a movie version of that Broadway play. And, um, you know, anyway, so that's the mechanism of the first fraud, the last scene of the movie is Max and [00:40:00] Leo in prison. And, uh, you know, something we've asked or we've talked about is what is justice? And we also talked about like what? Like, do people change? I think this is a little interesting to go to in this. So it cuts to them and they're doing a new musical called Prisoners of Love.

Caleb Newquist: Yeah.

Zach Frank: And instantly they're doing the exact not even like a slightly different it's the exact same scheme. They're like.

Caleb Newquist: Yeah, that's right.

Zach Frank: Over 100% of the prisoners. It even shows the warden getting, uh, money to, to buy part of it.

The Producers Movie Clip: You [00:40:30] now own 20% of prisoners of love. Congratulations. Yes, sir. You now own 30% of prisoners of love. Congratulations. Yes, sir. Warden would like to make a little investment in your production. Uh. Tell him he owns 50% of the show. Thanks. My pleasure.

Caleb Newquist: Something else. I think this last scene is, you know, this last scene while [00:41:00] they're in prison, you know, they're they're they're pulling off the exact same scheme that they had done outside. Um, as of, of prison. And so you see that Max and, and Leo are, you know, they're back there, they're up to their old tricks. They're just doing their old tricks in prison. And so the question is like, well, do, do people change? Can they be reformed? And we've had several instances lately. We've heard lots of stories about, um, people [00:41:30] who have been given second chances and perhaps didn't deserve them. Uh, Ellie Weinstein ran a Ponzi scheme, uh, received a very long prison sentence for it, uh, was pardoned by President Trump. And then about six months later, after his release, uh, started another Ponzi scheme. And so, and there's, there's, there's lots of very.

Zach Frank: We just did that one. We did which one? Barry minkow.

Caleb Newquist: Oh. Barry. Minkow. Yeah.

Zach Frank: Uh.

Caleb Newquist: Oh, yeah.

Zach Frank: Yeah. It's multiple [00:42:00] different frauds. And then I will say we've also had the opposite. We've we've talked to two people who have seemingly turned their life around that were convicted of fraud and crimes and spent time in prison. Nathan Mueller and, uh.

Caleb Newquist: Jonathan Schwartz.

Zach Frank: Jonathan Schwartz you know, they both seem like upstanding guys right now. Um, hopefully it's not going to come back to haunt me in some way, but they seem to turn their lives around and, uh, I think they deserve that chance. So it's a, it's a difficult question. Like, what is the right prison sentence? Do we make life too hard after prison? I'm not gonna get into those philosophical, philosophical debates [00:42:30] right now because they're too much for us.

Caleb Newquist: Yeah, probably. Um, so what do you think, Zach? Like, does this like, I think this is, this movie is a classic and I think having not seen it, but now, uh, prior to watching it for this episode, I mean, there's just something, yeah, there's something just kind of timeless about it. Um, and it, it is like the, the, the genius of, of Mel Brooks is that he, he really [00:43:00] did. It is a farce, but it's, it's the mechanics of the fraud make complete sense. And that aspect of it isn't far fetched at all.

Zach Frank: Yeah. And I think like, does it hold up for sure. I'd say obviously it's dated. You know, you're talking about a movie that's 60 years old right now. Yeah. Um, like, of course it can be dated things about it, but it holds up surprisingly well. Like are the two main actors over the top and cartoonish? Yes. On purpose though. Yes. And are they both great in their roles though? So yeah, I think [00:43:30] there's multiple things to be true at once. Um, and like, you know, we talked about the psychology behind this fraud before, I don't know if the fraud triangle was a thing that people talked about in the 60s, but this fits the bill pretty well for all for Max's character, like hitting every single one of those things. Um, you know, it's just yeah, it's perfect for that. We talked about the mechanisms being good. Um, you know, I think I don't know if the fraud I don't know, like if the there's comedy in the fraud I'm trying to think of. There's other movies that do like comedy with [00:44:00] fraud really. Um.

Caleb Newquist: I mean, it's always a, it's always kind of like, even if you think of the informant. Yeah. As an as, as something to compare it to. There's always something I think if, if, if a fraud story is a comedy, then it's always a pretty dark one because it's because there's just something kind of, um, I don't want to say that it's, it's, um, uh, kind of tragic. It's kind of tragic [00:44:30] because you have, you often have someone at the center of it who believes something very, very deeply. And yet the way they go about this is the way, the way they go about trying to achieve what it is they want to achieve. Um, gets them in trouble. And, and, but they are kind of blind. They kind of have blind spots around these things that I think for regular people is, you know, a pretty [00:45:00] clear cut case of right and wrong. So you've got Mark Whitaker and the informant who was, um, you know, it was a it was a price fixing scheme, but then he was also embezzling. And in the informant, he's like, the way he talks about it is so matter of fact, like, oh, he doesn't understand. He has this blind spot that he doesn't understand what he's doing is, is, is totally wrong and completely illegal and will get him in a lot of trouble. Max Bialystock is slightly different. [00:45:30] He knows what he's doing is wrong and he just doesn't seem to care. He wants to he wants to make money and that kind of that. That's kind of a dark. The the darkness of that is um, is very real in a lot of circumstances.

Zach Frank: Tons of psychology and people like that. Yeah. Narcissists.

Caleb Newquist: Yeah. And you're like, well, what must, the who? Who who are those? Who was that guy's parents? You know, like that kind of stuff. Those are the questions that come up.

Zach Frank: I guess it's also fun to laugh because they are. Even if they're likable villains, [00:46:00] they're still villains in a sense. That's kind of fun to laugh at their failure along the way, right? It's like, oh, like, of course they have the worst luck with this. So it's, it's like a fun thing to people love. And, you know, people love justice, right? It's a trope. That's what superhero movies are huge. So it's like, yeah, you know, they get if they got away with it. I don't know if people would like the movie as much if they like just, you know, the show really did fail. Like we said, the movie would end. It's like, oh, they got away with it. I don't think this would be a hit, but, uh, you know, it's relatable. They like the justice of like, yep, they got what they deserved. We don't learn, obviously, [00:46:30] how much time they're sentenced to prison or anything. But, you know, assuming a good a good few years at least.

Caleb Newquist: And because it's a farce, these details are not important. We just know that they, you know, I think that's, that's the kind of that's again, the, the specialty of Mel Brooks is that yeah, there's these practical things that you you'd be like, well, how long did. It's like, no one cares. Like they got what they deserved and they're running the same scam, um, on prisoners, uh, on their fellow prisoners. [00:47:00] Um, one other thing I was going to say is that the other, the other thing that is kind of, I find funny sometimes is that perpetrators in this case, uh, Bialystok, they have this charm about them that allows them to get away with, uh, their fraud. And that is sometimes hilarious because it is, it's almost unbelievable. Like you can't believe because I guess as a viewer, as somebody watching a movie, even [00:47:30] the Mark Whitaker case in The Informant where he, he has kind of this charm. He has kind of this charisma about him, but in kind of this dorky dad kind of way, um, he's real good at his job and he's really passionate and he gets mad a lot of times and people are like, you know, they, they, they are taken in by him. Um, and, uh, and so then from that standpoint, they, they managed to earn people's trust. And that's weird. And that, but in the circumstances, but it's also, [00:48:00] it's also funny. So I think that's something else that makes fraud always, you know, it's a good it's a deep well for laughs.

Caleb Newquist: All right. That was fun wasn't it. I hope you enjoyed that. If you're interested you can currently stream the producers on Tubi. Uh, which means it's free. But really [00:48:30] it's not because there are ads interspersed in there. Um, but whatever, it's not a bad experience. I mean, that's where you can, that's where you can stream the producers. So if you've never seen it, it's, it's worth, it's, it's a very tight movie. It's, you know, it's from the days when, you know, movies were like 90 minutes. So, um, that's where you can stream it. And I of course, highly recommend it. All right. That's it for this episode. And remember, you can only sell 100% of anything. If you have questions, [00:49:00] comments, or suggestions for stories, drop me a line at Omy fraud at earmark. Cpe.com. This episode of Oh My Fraud was written by Zack Frank and me, Caleb Newquist. Oh My fraud is created, produced and hosted by me, Caleb Newquist. Zack Frank is my co producer, audio engineer and music supervisor. Laura Hobbs designed our logo. Rate review and subscribe to the show wherever you listen to podcasts. If you listen on earmark, that's where you can earn CPE. All right. Join us next time for more average swindlers and scams from stories that will make you say.

The Producers Movie Clip: I'm [00:49:30] in pain and I'm wet and I'm still hysterical.