Oh My Fraud

There may be errors in spelling, grammar, and accuracy in this machine-generated transcript.

Greg Kyte: The rumor is that Kareem Abdul Jabbar lost all his money building specialty hotels for tall people. Like, seriously. And unfortunately for Kareem, he can't even set the record straight because when his lawsuit was settled, the terms were sealed. So he can't talk about it at all. Or else, I don't know, like he has to give all the money back or something. But it's kind of awesome when you think about it, because you can ask Kareem Abdul Jabbar something like, hey, did that lawsuit involve [00:00:30] an investment where you bet on toddlers, bare knuckle street fighting, and he can't say a goddamn thing? So then everybody would have to assume that he tried to launch some kind of Gymboree Fight Club FanDuel sort of business.

Earmark CPE: 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 [00:01:00] now on to the episode.

Caleb Newquist: This is Omai Fraud, a true crime podcast where our criminals are subject to disgorgement more than our victims are subject to dismemberment. I'm Caleb Newquist.

Greg Kyte: And I'm Greg Kite.

Caleb Newquist: Greg, something tells me you have a review that you would like to read.

Greg Kyte: I have a review that I want to read so bad because it makes me very happy. Uh, proceed. [00:01:30] So this is a five star review that was left on Apple Podcasts by a listener whose screen name I cannot pronounce. Best I got is the worker. Uh, too many, too many, too many consonants in that name. But, uh, but regardless of how you pronounce it, here's what the worker says a great podcast with smart and funny hosts. I'm not a CPA or even in a field remotely close to accounting, but I love hearing these tales of fraud and malfeasance. Imagine [00:02:00] a Venn diagram with true crime accounting and no murders, and this is at its center. That's a wonderful review that I totally let makes my day. Thanks. The work character.

Caleb Newquist: And we all know that a field not even remotely close to accounting that is a sex worker. Yeah. So. But we don't care what your profession is. If you love this podcast, do us a solid and leave us a review on Apple or Spotify or OnlyFans or earmark or wherever [00:02:30] you come across this podcast.

Greg Kyte: And also, if your organization needs in-house training or your event needs a keynote presentation that's ridiculously fun and ridiculously informative, let us know because we do that.

Caleb Newquist: Yes, if you're interested in hiring us for your training or event, send us an email at OMG fraud@earmark.com for pricing and availability.

Greg Kyte: Awesome. So, Caleb? Yes. Switching gears. Uh, you aren't a famous musician. [00:03:00] Nor are you a world renowned professional athlete. Certainly not. But, uh, here's what I'd like to know. When you. Way back when you were in high school. Uh, what would have been the better bet for you? Uh, like, not so. So not like, the most likely to, but maybe the more likely to become, uh, famous musician or professional athlete. Where would where would you have landed?

Caleb Newquist: Yeah, I probably would have landed. I probably, uh, famous musician. [00:03:30] Okay. Yeah. Because I had a little bit of talent and.

Greg Kyte: Wait, did you. Doing what? What kind of.

Caleb Newquist: Well, I just I could I knew how to read. Yeah. I knew how to read music, I played piano, I played trumpet, I was, you know, I liked jazz, I liked jazz. Band was probably my favorite, uh, thing. I participated in non non sports. Um, yeah. Jazz band was super fun and but my senior year, I was not allowed to participate because [00:04:00] I was I was taking all these like I was taking econ and advanced accounting. I was taking all these business courses, and I still wanted to do jazz as an extracurricular. But he wouldn't let the the, the band teacher wouldn't let me. He said I had to be in band, and I was giving up band to do all that, those business classes and which sucks. And, um, who knows? But yeah, my, my my athletic ability. I love to play sports. I especially like basketball and [00:04:30] baseball, but I just wasn't very good. I just didn't have the talent. Whereas in music I felt I had a little bit more talent like I probably could have. And you know what? I didn't have the work ethic to be an athlete. That's me. That's me. No, I had I didn't want to work that hard at that stuff, you know? Um, whereas I don't know, music, music came a little bit easier and uh, and. Yeah. And I think I think had I gotten into it, I probably would have actually worked at that.

Greg Kyte: That's funny, I did I did not know about Jazz Band for you, which probably makes me think you [00:05:00] didn't know. I was like the the premier, the premier choir at my high school was jazz choir, and I was I was a three years in the jazz choir. Uh, but also in hindsight, I realized I was always probably a liability for the jazz choir more than a, more than anything, but I. But it was.

Caleb Newquist: How so?

Greg Kyte: How so? Oh, just that I, I, I was, I just wasn't that I got in because they needed guys in the choir. That's not because of talent. So isn't that isn't.

Caleb Newquist: That always the case.

Greg Kyte: But [00:05:30] I had such a I had so much fun. Best, best time in my life. Best friends in my life were in jazz choir. Um, but but I think both for me and then I was a swimmer. That was my sport. But for both of them, I absolutely did not have the work ethic to become world class. But if anyone was going to bet on famous musician or professional athlete. For me, the good the smart money would have been on. Uh uh, musician. Uh, not not because I was great at it, but because I actually, I think [00:06:00] I could, I could have seen a trajectory where I became like a member of a Christian rock band, so that that was that was kind of the low level of my skills. And what do you.

Caleb Newquist: Mean, like like like like, would you been playing, uh, synthesizer and Michael W Smith's band or.

Greg Kyte: Rhythm, rhythm acoustic rhythm acoustic guitar in a in a worship band that got big and and licensed his music to churches and probably went on some tours to to, you know, not [00:06:30] rock the house than to praise the Lord.

Caleb Newquist: That feels a little bit like, uh, the money changers in the temple, but that's just me. And you're.

Greg Kyte: Not wrong.

Caleb Newquist: So licensing, licensing, worship.

Greg Kyte: You're not, you're not. You're not wrong about that. Uh, well, the reason why we're talking about this at all is because today we're having another one of our our I mean, the closest thing we have to a mini series inside our podcast, we have another defrauded famous episode where we're going [00:07:00] to explore a couple of cases, one about a famous musician and one about a professional athlete. And.

Caleb Newquist: The celebrity Alanis Morissette singer songwriter. You ought to know if you are a restless teenager in the mid 90s. And honestly, weren't we all? Then you listen to Alanis Morissette a lot. And even if you weren't restless [00:07:30] and didn't listen to Alanis, too bad you couldn't get away from her. Her record, Jagged Little Pill, because it was played everywhere in the mid 90s.

Greg Kyte: So true. Yeah. It was.

Caleb Newquist: Everywhere. It was everywhere.

Greg Kyte: It was ubiquitous. But also but also, I didn't feel like it was something that you ever felt like you had to run away from because it was it was just good music.

Caleb Newquist: It was it was nothing. I remember thinking that nothing I had ever listened to up to that point [00:08:00] and granted, I was a teenager, so I hadn't listened to that that much stuff. But she no one sounded like her. No, like she had she had a singular sound and like. And I agree with you. Like, even though I heard it all the time, I don't think I ever really got tired of hearing it. Yeah. Yep, yep. All right. Alanis was born in Ottawa, Canada in 1974. Her parents were both teachers. She has a twin brother and one older brother. She mostly grew up in Ottawa, except for a short [00:08:30] period when her family moved to what was then West Germany. Alanis first brush with fame, as you may or may not know, was as an actor on You Can't Do That on television, Greg Kite. Do you remember? You can't do that on television.

Greg Kyte: I honestly have never heard of, uh. You can't do that on television. Oh, my God.

Caleb Newquist: Is a Nickelodeon show. It was a Nickelodeon show. Yeah.

Greg Kyte: Before. Before recording this podcast. Never heard of that. My guess as to why I never heard of it is because they couldn't do that on [00:09:00] television. So, uh.

Caleb Newquist: Very good.

Greg Kyte: That's my assumption.

Caleb Newquist: I remember being a kid and watching Nickelodeon because I was I was a kid in the 80s. And so of course I watched Nickelodeon, and You Can't Do That on television was like one of those things where I remember my parents kind of, uh, grimacing and disapproval if they caught me watching it. Gotcha. Because it was.

Greg Kyte: Just. Was it your Simpsons? Was it your The Simpsons?

Caleb Newquist: No. The Simpsons came later, and there was. No, there was, but it was.

Greg Kyte: That was the same kind of vibe [00:09:30] where so many parents were just like, oh, this looks like it's for children, but this I there.

Caleb Newquist: Yes, 100%.

Greg Kyte: With their.

Caleb Newquist: Children watching. I kind of, I kind of, I kind of just powered the Simpsons through my parents brains and they finally they just totally accepted it. But, like, you can't do that on television. Was this thing there where, like, I don't know, since you don't know the show. Like one thing they did was anytime anyone ever said, I don't know, they got slimed like, like literally like a, like a bucket of slime Carey [00:10:00] style would dump on their heads. Okay. And it was just weird. Yeah. And, and and then there was, there was this recurring sketch that they did, like, I don't know if it was a school cafeteria, but I'm not kidding you. And I don't know, some listeners out there might keep me honest, but the but the recurring character in the school cafeteria, his name was barf. Oh, his name was barf. And he made the school lunches and. But then there was inevitably always a kid who would end up throwing up [00:10:30] in the sketch. And it was ridiculous. And it was just kind of like, crass and campy and just, I don't know, it was it was it was a weird show, but it was just this kid's sketch show, basically. Okay. And. Yeah, kind of, uh. Yeah, maybe a little bit too crass for my parents liking.

Greg Kyte: Sure, but. Alanis Morissette, but.

Caleb Newquist: Alanis Morissette.

Greg Kyte: One of the, uh. True. Yes. She was. You can't do that on television.

Caleb Newquist: She was in, like, five episodes or something. Okay. Um, and [00:11:00] anyway, that wasn't, you know, that that that really wasn't what she was into. Like, if you look into her history, Alanis was definitely a musician from an early age. She started writing songs when she was nine. She recorded her first demo in 87, when she would have been about 13. Yeah, but she didn't release her first album until 90. 1991, when she was about 19. Okay. And that was only in Canada. But it was a hit and it went platinum and had lots of singles [00:11:30] in the Canadian top 40. And so at this stage in her early career, like, she was basically the Debbie Gibson of Canada.

Greg Kyte: Which sounds like that sounds like a like a sick burn.

Caleb Newquist: But but Debbie Gibson is very good.

Greg Kyte: Yeah, exactly. And especially in the 80s, like, it's really good. Debbie Gibson was the shit. So if you're the Debbie Gibson of Canada, I mean, the real dig is the of Canada part of Canada, the Debbie Gibson part?

Caleb Newquist: Yeah. Yeah. Then doing the research on Alanis, of course, I went down to Debbie Gibson, [00:12:00] you know, Rabbit Hole. Okay. And she has made a long career out of show business. Like, she's like, she did musicals after all that stuff in the 80s. Like, she was in lots of, like, musicals and stuff and even had as I even had like a recent hit song relatively recently.

Greg Kyte: With Debbie Gibson did. Yeah. Oh, okay. Yeah. Well, good for you, Debbie Gibson.

Caleb Newquist: Yeah. Anyway, so now it's more like, well, is she the Alanis Morissette of the US of a? Certainly not.

Greg Kyte: Right, right, right right [00:12:30] right.

Caleb Newquist: Anyway, uh, Alanis even opened for Vanilla Ice, which I did not know.

Greg Kyte: That's amazing.

Caleb Newquist: Alanis second album didn't do as well as her first as her debut, and it was only a two record deal, so her contract was up and she didn't get a new deal. But to make a long story short, she later broke through with Jagged Little Pill, which was released in 1995. So just a few years later. Yeah, it had [00:13:00] many hit songs, as you probably know. You Oughta Know, ironic, hand in my pocket, head over feet, I don't know. There's there's the whole the whole record. Like, I think you can listen to any of the songs. And they were almost, almost all of them were hits. Yeah. Um, it sold this album, sold 33 million albums worldwide. It's the third best selling album by a woman ever. Wait.

Greg Kyte: Still, to this day, to.

Caleb Newquist: This day, it is the third third best selling album by a woman. Wow. And I think if [00:13:30] you put it like if all artists, it's definitely within like the top 15 or 20. Wow.

Greg Kyte: Wait, so do you know who the other. What? The other, uh. What? The two that surpassed her were? I do. Lay it. I need to know. Okay. Whitney Houston. Yes. Okay. The bodyguard.

Caleb Newquist: The bodyguard soundtrack is number one.

Greg Kyte: What about, uh, Mariah Carey? Was that number two? Nope. Who was number two? Celine Dion? Nope. Who was it?

Caleb Newquist: Shania twain.

Greg Kyte: Shania twain. Okay. All right.

Caleb Newquist: Another Canadian. [00:14:00]

Greg Kyte: Fucking Canadians!

Caleb Newquist: Canadians. Jesus.

Greg Kyte: Eating our.

Caleb Newquist: Lunch. Well done, well done. But, yeah. Good job on the Whitney, though. Did you. Would you have known the album if I had not said it?

Greg Kyte: Oh, I don't think I could have. Could have guessed.

Caleb Newquist: That. Yeah, but Whitney Whitney has the best selling Whitney. Whitney Houston has the best selling, uh, album for a female artist. Okay.

Greg Kyte: Not. Yeah. That that was where my money was. All right.

Caleb Newquist: Um, she won four Grammys, including album of the [00:14:30] year. And almost 30 years later. I can't believe it's been 30 years. My God. Right. Okay. 30 years later.

Greg Kyte: So old.

Caleb Newquist: We're getting up there. Uh, she has released seven more studio albums, and they've all done well enough. But none have come close to the success of Jagged Little Pill. Like. Right. There's obviously third best selling record. I mean, but. So you're you're good. Yeah. Right. Yeah, yeah. One of the biggest albums ever.

Greg Kyte: You don't have to feel bad if you don't surpass your own. Third [00:15:00] best selling album ever, right? You're you're you're you got it. You won. Alanis.

Caleb Newquist: Yeah. It's a it's a wild success, especially by Canadian standards, but by any standard, really a huge success. An artist with such a lucrative career. Greg needs a good business manager. Of course, wouldn't you say?

Greg Kyte: Yes, absolutely.

Caleb Newquist: So back in about 2008, GSO Business Management was one of the top firms representing [00:15:30] athletes and entertainers, and Jonathan Todd Schwartz was one of Gso's top partners. As best I can tell, Alanis became a client of Schwartz and GSO in 2008 or 2009. His responsibilities were extensive. He was tasked with managing her finances, collecting her income, paying her expenses, maintaining and safeguarding her bank accounts, managing investments, providing cash when requested, preparing monthly reports with detailed profits and losses, and consulting with her on all sorts of financial matters. So [00:16:00] if she wanted to buy a house, you'd probably talk to this guy, right?

Greg Kyte: My, my take on on folks in that position is yeah, it because basically Alanis Morissette is a business her she she is she is a business. She needs an accounting department. This guy was her accounting department. Yes.

Caleb Newquist: Yep. Absolutely. And we've talked about that on prior episodes. Prior. Yeah. Uh, celebrity episodes in that the person is the business Either their through their through [00:16:30] their art, whatever that might be. Or if you're an athlete, through that, through that talent. Yep. Yep. Also, fun fact about Schwartz and his responsibilities for Alanis. He was also a signatory on all her bank accounts and maybe that standard. My guess is that standard. We need to. Here's what we need, Greg. We need to get a show. We need we need to get a show business business manager in here to tell us, like what's standard and what's not. My hunch is that that's probably pretty standard, [00:17:00] but it puts people in vulnerable positions, which we will get to later.

Greg Kyte: In any case, I hope that's not standard, but I.

Caleb Newquist: Don't know, man.

Greg Kyte: But but with the with the famous people that we look into, uh, that is.

Caleb Newquist: That seems to be.

Greg Kyte: Standard. If you wind up on who am I, fraud. Chances are that that was standard.

Caleb Newquist: Indeed. After many years of working together, Alanis fired Schwartz and GSO in 2016. The reason he didn't provide her with [00:17:30] details about her finances.

Greg Kyte: That was one of the things you listed.

Caleb Newquist: Yeah, it was, wasn't it? A Hollywood Reporter story stated that Alana said that quote, he started keeping her in the dark, and when she pressed him for details, he'd tell her she was being disrespectful. Jesus Christ. And that's that doesn't make any sense because it's her money.

Greg Kyte: Right? Exactly.

Caleb Newquist: It's her money. So why [00:18:00] would what's disrespectful about asking about my money?

Greg Kyte: Right, exactly. Holy cow. Sounds like. Sounds like a baby boomer dealing with one of us Gen Xers where it's like you, you. You're being so disrespectful when you ask me any questions.

Caleb Newquist: It's like, I don't. I don't think you know what disrespectful means.

Greg Kyte: Right, right.

Caleb Newquist: All right. So she fired Schwartz and GSO. She retained a new business management firm and [00:18:30] as is customary in these situations, the new firm requested the old firm's files. Okay. Yeah. Gso sent all they had for Alana's account 26 boxes of files along with electronic files. And upon review of these files, the new business manager found 116 transactions of unaccounted for and unauthorized cash withdrawals from January 2010 through January 2014, for a total [00:19:00] of $4.7 million. Naturally, the new business manager had some questions about this and went to the one guy, Jonathan Schwartz, who would know what the deal was and request a documentation. This request was made on or about April 14th, 2016. In response, Schwartz said that he had a, quote, signed letter acknowledging each and every cash withdrawal. [00:19:30] He also stated that he had a signed receipts for all these transactions and storage.

Greg Kyte: Oh well, there you go. Problem solved, problem solved. That's easy. It was. Then we sent you 26 boxes. But there's a 27th. I gotta just go find it. Yep.

Caleb Newquist: My bad. 27 boxes.

Greg Kyte: Cool.

Caleb Newquist: But then he allegedly said, quote, if I don't have receipts for each cash transfer, I know I have receipts for at least 70% of them.

Greg Kyte: That's awesome. I love that I've got everything [00:20:00] you need, and if I don't, I've got 70% of everything you need. Just the the the confidence and backpedaling. I love it, right?

Caleb Newquist: Right. Nearly a third of what you're looking for gone. Probably doesn't exist.

Greg Kyte: Yeah, but but listen, I'm a stand up guy. I got you. So this is just this isn't a problem, right?

Caleb Newquist: So not exactly reassuring, but Schwartz promised to [00:20:30] provide 70% of minimum. Right? By April 18th. But that didn't happen.

Greg Kyte: Of course it didn't.

Caleb Newquist: So the new business manager followed up. Schwartz responded that he was, quote, working to find the letter and putting together all the supporting docs and would send everything by April 25th. And my first question would have been, what have you been doing for the last week?

Greg Kyte: Right, right.

Caleb Newquist: After our conversation? Yeah. [00:21:00] What have you been? What did you do? Right. And seven days in a row. And besides the things you said you were going to do.

Greg Kyte: Right. And putting together the supporting docs, is he just saying I'm forging receipts? I need just one more week to finish forging receipts, please.

Caleb Newquist: Right. It kind of reminds me of the Darren Berg episode where, yeah, he's like, well, I had to I had to make up all these fake confirmations, right? Uh, day and night I was doing that for. I was [00:21:30] doing that day and night.

Greg Kyte: Doesn't doesn't happen by itself. Making up fake confirmations. Can't just, you know, fake receipts just don't fall out of the sky. That's right. It's 2016. Jesus.

Caleb Newquist: There's there's there's there's no ChatGPT. In 2016, you could make all these fake receipts.

Greg Kyte: Oh, my gosh, I can't wait for the episodes that are coming.

Caleb Newquist: So he's promising all this stuff by April 25th. But then, as you might expect, that didn't happen either.

Greg Kyte: I did expect that. [00:22:00]

Caleb Newquist: Oh, well, that's a plot twist for you, then. A conference call was scheduled for the next day, April 26th, that included Schwartz, two of his partners, and one of Alanis's attorneys. During that call, Schwartz explained that the money was used for a, quote, marijuana growing business. Now, it's important to note that this would have been an illegal business, and Schwartz said that he delivered cash to a number of different people that he couldn't identify, [00:22:30] and there were no receipts. He claimed that he classified these transactions in his monthly reports as personal or sundry expenses.

Greg Kyte: So was so the claim was that Alanis wanted him to invest in a marijuana growing company? Yes, but that that was shady AF in what we're talking 2016. Yes. Here, there, there. I'm sure 2016 there was medicinal marijuana, but this was not that. This was. No, just [00:23:00] some dude. So was he was he just trying to go, hey, Alanis, you're a stoner. You're not going to get your money back. I think I feel like that was the play here.

Caleb Newquist: I mean, as best as I can tell. Yeah. Okay. And, um. Anyway, of course, Alanis vehemently denied all this, right? I mean, I, I have to imagine that when that explanation was like, if she wasn't in the meeting and I didn't get the sense that she [00:23:30] was in this meeting, but you imagine the lawyer going back to her. It's like, um, did you authorize him to invest in a marijuana grow business? You oughta know.

Greg Kyte: Yeah, yeah, yeah.

Caleb Newquist: That I did not know. Anyway, that was. Well, and that's the thing.

Greg Kyte: I mean, one of the one of the things that we all love about Alanis is that she, uh, at least musically, would give free. She, she would let, let the horses run with the rage. [00:24:00] So, you know, that's there. And, you know, that likely came out probably not in four, four time.

Caleb Newquist: Right. Gso remember, this is the firm that Schwartz works for. The other people in this meeting were shocked by the news, and they immediately started an investigation. That investigation found that Schwartz had recently taken a $50,000 vacation to Bora Bora, and that he had an open marker at [00:24:30] a casino for $75,000. What? Yeah. So they were more than a little annoyed by that. And so a week later, now, in May of 2016, the firm suspended Schwartz, banned him from the office, and demanded that he turn over his laptop and phone, uh, which he refused to do. He didn't give him. He didn't give him the phone or this guy? Yeah. Alanis promptly sued GSO and Schwartz later that month for $15 million. Gso [00:25:00] quickly settled, with Alanis, repaying her and Schwartz's other clients back for their losses because upon their investigation, they found other money missing from other clients.

Greg Kyte: Again, not surprising. Yep.

Caleb Newquist: And they turned around and sued him for that money. On January 17th, 2017, the Department of Justice issued a press release announcing that Jonathan Schwartz had agreed to plead guilty [00:25:30] to embezzling more than $7 million from his clients, including 4.8 million from Alanis Morissette, from May 2010 through January 2014. Schwartz pleaded guilty to wire fraud in February 2017, but also to filing a false tax return for 2012. No, he did not report any of this money that wasn't his on his tax return, even though you are supposed to, which I've always thought is weird. Haven't you always thought that was weird?

Greg Kyte: No. I feel like that's very intentional. And, uh. [00:26:00] Yeah.

Caleb Newquist: You got. Oh, so it's a trap? Yeah.

Greg Kyte: Yeah, it's just another way. It's a it's.

Caleb Newquist: To throw some more charges at someone doing illegal shit.

Greg Kyte: Yeah. Or to. Yeah. Yeah. For sure.

Caleb Newquist: Absolutely. Yeah. Yeah. Yeah. You had back taxes for about $1.7 million. Schwartz was sentenced to six years in prison in order to pay $8.6 million in restitution on May 3rd, 2017, about a month before he pleaded guilty. Jonathan Schwartz admitted in a guest column for The Hollywood Reporter and apologized. [00:26:30] He explained that he was addicted to gambling and that is why he stole from his clients, and he cautioned others who were in similar situations as him. In response to his apology, Alanis released a statement, quote, I would be apprehensive to believe any words that come out of Jonathan Schwartz's mouth.

Greg Kyte: The celebrity Kareem Abdul-Jabbar, six time [00:27:00] NBA MVP activist and one half of the Rogers in the 1980 smash hit film Airplane!

Caleb Newquist: God, I loved airplane!

Greg Kyte: Oh my gosh, back in the 80s. Could couldn't beat it.

Caleb Newquist: I think that was one of the first movies that I saw where I was laughing uncontrollably.

Greg Kyte: Oh, yeah.

Caleb Newquist: Yeah. I just remember being a kid and thinking everything was so funny. Yeah.

Greg Kyte: And absolutely.

Caleb Newquist: And just so campy and and ridiculous. It was.

Greg Kyte: So. But it was also rapid [00:27:30] fire. Like, there was no constant. Yeah. Yeah. Like, you didn't have.

Caleb Newquist: You didn't have a chance to breathe. Nope.

Greg Kyte: You did not. Did not. Uh, and it's very interesting knowing what we know now about Kareem Abdul's demeanor. Kareem Abdul-jabbar's demeanor. Oh, yeah. He would I mean, I felt like that was even back then. I felt like that was one of the funniest things in the movie was that Kareem Abdul Jabbar was in the movie. Yes. So just it's like you shouldn't be here, [00:28:00] but. Yeah, but here you are flying a plane. Fantastic. Yeah. Uh, Kareem Abdul Jabbar is, without question, one of the greatest basketball players in the history of the sport. He broke the NBA's career scoring record in 1984 with 38,387 points, and nobody was able to break it, not even Michael Jordan, until finally, almost 40 years later. Lebron James took it over in 2023. [00:28:30] And uh, Caleb, I did a quick Google search and, uh, to find out that Kareem Abdul-jabbar's trading cards, uh, can sell for over $30,000 for a trading card.

Caleb Newquist: Not bad.

Greg Kyte: Ridiculous.

Caleb Newquist: Not bad. He was I remember watching I remember, like, my earliest memory, my earliest memories of watching basketball on TV as a kid were the the Lakers and the Celtics. And I just thinking that Kareem like something about that skyhook. You were just like, what is that? [00:29:00] Like you just like he's like, who is that guy? And like, how is he? And he just draining him over and over and over? Yeah, yeah yeah, yeah.

Greg Kyte: He was he anyone who watched any basketball in the 80s? Uh, yeah. Because it's funny, I, I also remember watching Kareem Abdul-Jabbar. I have zero memories of Magic Johnson. Really? Yeah. Oh, I.

Caleb Newquist: Remember magic, too. Oh, yeah. I mean.

Greg Kyte: Not that I mean, I obviously he was on my radar, but I don't like I don't like nothing locked in my brain of, [00:29:30] like, seeing him play. Right. But but Kareem Abdul-Jabbar, he's in there somehow he got in there. Yeah. Um, he he was a great athlete. But like, a lot of athletes, a lot of celebrities, hell, a lot of humans. He was not good with money. Uh, yeah. Had plenty of money problems. And some of his money problems were not his fault. Like when his Bel-Air mansion burned down in 1983. Not his fault. Not his fault. Uh, some of his money problems were [00:30:00] his fault. Like, his extravagant spending he was known for spending back in the 80s. He spent $30,000 on one Persian rug to put in his Persian rug collection. Uh, also a collection. He had a he had a collection that actually listen. So his when his house burned down, his house was valued at $1.5 million. He also lost $1.5 million of personal effects that were not, that were not insured, because he did not keep an inventory [00:30:30] of his personal effects and submit that to his insurance company and some of the things that got burned up his house, his Persian rug collection, one of which, one of those Persian rugs, like we said, $30,000, also lost his extensive, uh, vinyl collection. He had a huge he had a.

Caleb Newquist: Huge.

Greg Kyte: Like thousands of jazz records that he lost in the in the fire and, uh, could, could not, could not. So his house was insured, but the, uh, the personal effects were not, um, [00:31:00] he also apparently, uh, got himself involved in some ridiculously complex and rather intractable investments. Uh, my favorite. Right. Well, here's what here's what, like is mind boggling. In 1986, Kareem Abdul Jabbar spent $1.2 million just to get out of investments that went wrong. Which, that's. That's ridiculous. A lot. Yeah, well, the only thing I can think any the only investment that comes to mind [00:31:30] where you have to pay money to get out of it is timeshares. Is he was he was he just up to his eyeballs in timeshares? Yeah. I don't I'm not sure I'm not sure what, uh, what that was. But regardless, that's what I found, and that sucks. Yeah. Kareem's original business manager was a guy named Bob Owen, a Wall Street lawyer, a stand up guy, and a very Conservative investor to the point [00:32:00] that when when asked about Bob Owen, Kareem Abdul Jabbar said, he didn't make me a hell of a lot of money, but he didn't lose me a penny. That's that's a that is the hallmark. That is, that is, that's that should be on the business card of someone who puts themselves out there as he can conservative, uh, business manager and a conservative investor. Uh, but then Caleb, in 1980, uh, Bob Owen died.

Caleb Newquist: Oh. [00:32:30]

Greg Kyte: So things were just going great, plugging along, not making a lot of money, but not losing any money, not.

Caleb Newquist: Losing a.

Greg Kyte: Cent. And then Kareem Abdul Jabbar suddenly became Managerless. Kareem's next business manager was this fella named Thomas M Collins. Does that name sound familiar? Tom Collins.

Caleb Newquist: Tom Collins.

Greg Kyte: Yeah, if. Sure. If Tom Collins does sound [00:33:00] familiar, that's because there's a cocktail named for Tom Collins and you're an alcoholic.

Caleb Newquist: But they're very refreshing.

Greg Kyte: Have you had Tom Collins? Of course. I've never had a Tom Collins.

Caleb Newquist: I just oh, God, they're so refreshing.

Greg Kyte: But I knew. But also. Yeah, gin and sparkling lemonade sounds fabulous. Like a slam dunk to me. Yeah. Um. Funny fact, did you know, do you know Magic Johnson's business manager's name? Aha. Karl. Jagermeister. Oh, yeah. Yeah. Now that's ironic. [00:33:30] Is what? Someone should write a song about that. Because that is.

Caleb Newquist: Ironic.

Greg Kyte: Karim first met Tom Collins in the mid 1970s. Collins was a, quote, sincere religious man who frequently quoted scripture in discussing his business philosophy. Hmm. I don't know.

Caleb Newquist: I don't know.

Greg Kyte: That I remember.

Caleb Newquist: I did did he does he does he does he quote that part where Jesus threw [00:34:00] the money changers out of the temple?

Greg Kyte: I don't know, or where he where Jesus pulled a coin out of a fish and said, give unto Caesar what is Caesar's. I don't know, that doesn't sound like someone who's trying to minimize your tax burden, but yeah, but but that was that's who we were doing the other. Well, the other interesting thing about that is that Kareem Abdul-Jabbar, famously a devout Muslim. So, yes. So, so I guess I so at first I was like, oh, well, that's weird that he would he'd [00:34:30] saddle up with a someone who's a kind of seems like a rather zealous, uh, evangelical Christian. But then, uh, the more I think about it, the more I go, good on you, Kareem Abdul-Jabbar, for not being, uh, you know, not being narrow minded. Making. Yeah. Having a having a wide tent under the Kareem Abdul-Jabbar business over the Kareem Abdul Jabbar business. Um, but there was a lot of athletes, including a couple other people in the Lakers organization, who were using Collins. [00:35:00] So when his old business manager upped and died, Kareem signed a simple nine paragraph agreement, making Collins his new agent and business manager in 1984 and 1985. Thomas Collins engineered some real estate deals into which Kareem Abdul-Jabbar invested heavily, but by mid 1985, none of those investments had produced any income at all. So [00:35:30] Kareem started to get suspicious. Uh, also, Kareem was not receiving monthly statements from Collins. Uh, sounds a little Alanis Morissette. Ian. Uh, if I do say so myself.

Caleb Newquist: You got your decades out of order, but otherwise. Yes.

Greg Kyte: Okay, so. But still.

Caleb Newquist: I know where you're going with that.

Greg Kyte: Yeah. I mean, I guess our story sounds familiar. Our story sounds familiar. There you go. Sounds very familiar. And then, on top of [00:36:00] no income and no statements, uh, Kareem also received notices from the IRS that his 1982 and 1983 taxes had not been paid. Uh, red flag. Yeah. And when he asked Collins about it, Collins made it sound like it wasn't his fault, but rather some kind of problem that had to do with IRS red tape. But because of all these things, in 1985, Kareem Abdul-Jabbar commissioned an independent audit of Collins management [00:36:30] of Kareem's fortune. And here's a quote from an article in Sports Illustrated about the Audit's findings. It says sums of money would be moved from the account of one of Collins client to another without either being told. Abdul-jabbar unknowingly lent another client $575,000. Under the terms of the loans that Collins arranged with the Bank of California and other banks, each limited partner was liable [00:37:00] for the full balance, and Abdul-jabbar's obligation came to around $9 million. So Caleb.

Caleb Newquist: Yes.

Greg Kyte: Kareem claimed to have never been told about any of that. And if you don't get it from the quote, Kareem was the personal guarantor for the entire $9 million that was lent to Collins Investment Partnership. Collins maintained that every single partner was a personal guarantor for the entire debt, [00:37:30] but Kareem had the deepest pockets of any of his clients, so if there ever was a default on these loans, the banks wouldn't go to the shallow pockets. They would go to the deep pockets. Kareem would be the guy who went down.

Caleb Newquist: Yeah. Seems like a bad deal for Karim. Yes.

Greg Kyte: Here's another quote from that Sports Illustrated article. When Abdul-Jabbar let it be known that he wanted out of Collins various arrangements, [00:38:00] the Bank of California and the California Overseas Bank called in their loans, and virtually all of the deals collapsed, and almost every property either went bankrupt or sank deep into debt. So everybody was pissed at Karim and everybody was pissed at Collins. But Collins insisted that the only reason that the investments languished was because Karim decided to pull out of them. Other than that, they were rock solid. Yeah. Ready to go? You [00:38:30] know, these investments that didn't produce any income for like a year and a half? They were not there was no problems there. The problem was Kareem Abdul-Jabbar getting cold feet. Uh, Collins also claimed that. And I think this is interesting. Caleb. Yeah. He claimed that he claimed that Kareem Abdul Jabbar didn't know a lot about the details of his investments, because Kareem Abdul Jabbar didn't want to be bothered with the details of his investments. That's interesting to me, because that [00:39:00] sounds a lot like a lot of people, because you're making all this money. You don't really like money. You know, you're not really good with money. You just really want to spend the money. You want somebody else just to kind of take care of it for you. Yeah. Like. Like I remember back in the day when I was doing the podcast with Jason Plummer, the thrive cast. We had, we had an author on, um, I'm not going to remember his name, but he wrote the book, the, uh, the Experience Economy.

Greg Kyte: Okay. And, uh, and [00:39:30] we were talking to him about his experience with accountants, and he was absolutely that guy where he was like, no, I, I don't want to have an experience with my with my accountant. I want to just send stuff and just have a tax return magically appear one day. I don't I do not want to interact with you. I don't want I don't want to know the details about what's going on. I just want you to take care of it and make. That's the experience that that that author wanted with his business people. And and so even though Tom Collins is [00:40:00] the bad guy in the story, I, I feel like that component of it might be true. But regardless, Collins definitely took a lot of liberties that he shouldn't have. Um, he. So so not only did Collins say that Kareem didn't really want to know a lot of the details about his investments, Collins also claimed that Kareem personally signed every single contract, and that Kareem personally signed every single guarantee to which he was obligated, but Kareem obviously [00:40:30] maintained that that was all bullshit. And. Kareem Abdul-Jabbar fired Tom Collins in January of 1986, and in 1987 he sued Collins to recover $59 million in damages. The allegations included breach of fiduciary duty, breach of contract, fraud, and negligent misrepresentation. [00:41:00] Uh, turns out you remember that nine paragraph agreement that Kareem Abdul Jabbar signed? Yeah. To be. Yeah. Uh, that, uh, that that that document sucked.

Caleb Newquist: Uh, nine paragraphs. You don't say.

Greg Kyte: Yeah. It was. Well, apparently it was. It was so short because. Well, this is what I found out. This is a quote from one of the articles that I, that I found in my research. Uh, it said that that document, quote, essentially gave Collins the right to do anything he pleased with [00:41:30] Al Jabbar's money. He was free to sign checks and take out loans in Al Jabbar's name. So again, is that standard operating procedure for these managers. I hope not, but it's more and more it seems like it is. Or at least it's something that is easy to throw into even a nine paragraph document that someone's just going to sign for you to just take care of all their money problems, right? According to this one website that I found called Sports Legends Revealed, [00:42:00] it says quote. The suit settled in late 1989. The terms of the deal were sealed, but it seems pretty clear that at the very least, Al Jabar got all of his investment money back. Collins has since lost all of his clients, filed for bankruptcy, lost two homes to foreclosure, and was last known to be working for his brother in law as a butcher.

Caleb Newquist: Okay, [00:42:30] Greg, did we learn anything this time.

Greg Kyte: We. Well, yes. I mean, the you know, there's the simple stuff like, uh, you know, read everything that you sign, even if it's only nine paragraphs. Right. Or maybe especially if it's only nine paragraphs, uh, and obviously don't sign anything that you don't feel perfectly comfortable signing. Um, I know I've been I've been bit [00:43:00] in the butt by that. I think I've even talked about it on the podcast before, where there was a listing agreement I signed with a realtor that I read through it, and there was parts that I did not feel comfortable with, but I was just kind of like, blah, blah, blah. I have to sign this to be able to do the thing I need to do. So this is all boilerplate, just get it done and out of the way. But the the boilerplate ended up biting me in the ass, uh, many years later. So. Yes. Um, so, uh, yeah, there's but but but see this and [00:43:30] and I don't know. So we're talking about what did we learn and from, from that experience that I had that was similar to Kareem Abdul-jabbar's experience with his, uh, engagement contract with his manager. Uh, I mean, the one thing I remember thinking about when it happened to me was I don't have the time or really the resources to have my attorney or the, you know, my, my business attorney review every single document [00:44:00] that I sign. Right. Uh, because, again, there's some that seem like this is just a formality to get the work done that I need to get done.

Greg Kyte: So I'm just going to sign it and be done with it. But, uh, but there's some that slip through the cracks that you go. Maybe I should have had that reviewed by an attorney. So. Yeah. Uh, so that's a, that's a is that a lesson learned, or is that just this here's something that sucks about doing business. This is a bigger this is the bigger thing. And again, I'm confident that we've talked [00:44:30] about this on the other, uh, defrauded famous episodes that we've done, and that is that no one is. You cannot trust other people to manage your money for you without they. You must provide oversight to the people who are managing your finances. But I mean, in both of these cases, the managers were supposed to be giving reports on a regular basis to their clients and were not. But that should have been [00:45:00] demanded by both Morrisett and Abdul-Jabbar immediately. The first time you didn't get that statement, you should have been like, hey, I need that statement right effing now, and no excuses for not getting me that statement, because they've got they've got all your money. So so you have to do that. But also that whole idea of just set it and forget it. Financial management I any anyone like because like we said, these people are the business, these celebrities, they are their own business. [00:45:30] They are the CEO. Kareem Abdul Jabbar was the CEO of Kareem Abdul Jabbar Enterprises and Heavy Industries LLC. That's he's the he's the guy.

Greg Kyte: You have to look over all of your financial shit because there's too much at stake if you do not. I hate it when I talk to business owners who are like, I don't understand any of this accounting stuff, because everyone who says that is at huge risk for being taken advantage of. Yep. And hopefully [00:46:00] they won't. Hopefully. And even like in in in in the story about Atlantis, I loved the part of the story where GSO was aghast that that Schwartz was doing what Schwartz was doing. Yeah. Because you got to think that the vast majority of people there were, were had had a lot of integrity and were doing their jobs right. And them keeping their clients was dependent on everyone at that firm acting with integrity [00:46:30] and honesty. So it's the so so it's the exception to the rule where you've got people who are acting poorly. But at the same time, if you're not doing anything to keep track of your own finances, when when someone steals from you, it's I mean, again, we've said that on this podcast. We've we fully, uh, engage in victim blaming. And that's what I feel like I'm doing right now. But it's kind of your fault if you're not if you're not keeping track of that stuff and you're not demanding the very basics of what people are supposed to [00:47:00] be doing to you, even from a reporting side, it's kind of on you that you got all your money taken from you.

Caleb Newquist: Yeah. And I mean, it's I mean, I know in the Billy Joel, when we talked about Billy Joel several episodes ago now, he like looking back on it. He, he, you know, acknowledged that it was on him. Yeah. That he trusted people that he shouldn't have. Uh, but again, in that case, it was his brother in law. Um. Brother in [00:47:30] law? Brother in law? Yeah, I think so. Yeah. And I mean, and I don't know. You look at the Atlanta situation and you're like, oh, no, she went with a reputable firm. Yeah, a reputable guy. That guy Schwartz was like, one of the power. He was. He was like, on a, like, a Hollywood reporter list for, like, top business managers and like, 2014 or something like that. So, like, he was he had his reputation as a one of the best of the business managers in Hollywood. Right. And so it's [00:48:00] just one of those things where you think you're doing the right thing and you don't have to worry about it, but the lack of monitoring it was one of those things where if you if you went back and you were in some of the deeper details of the the Atlanta story, there was basically like she had a plan. She basically said, like, there's a chunk of money that I don't want to touch. I don't want anything to be done with it. I want it to just sit there and be like, that's the rainy day fund. But when we're talking about millions [00:48:30] of dollars and he used that money, he. That was part of the money that he stole, right? Yeah. And there's one of those things where it's like, well, you can have a plan, but then you have to execute the plan, right? Like, that includes like whether whether or not you're, you're, you know, booking the entries or, or or cutting the checks or, or reconciling the credit card statements.

Caleb Newquist: None of that really matters. But if, if you if if someone tells you it's like, well, we put, you know, X amount of dollars over there. That's the rainy [00:49:00] day fund or whatever you wanted over there. That's where it is. Yeah. You should open those statements and just make sure that the money. Absolutely. The money's there. Every once in a while. And if there's one nickel missing, you'd be like, uh. See, uh, I thought this was the thing we weren't touching. Right. You know. Right. And like it is, I don't know. I'm not trying to. I'm not trying to, um. Like you say, we're not. We're not victim blaming, per se, but in these. Yeah. I mean they bear they bear some they bear some responsibility I think. And [00:49:30] I think if we, I don't know if we had a business, it would be interesting to talk to like a, like an entertainment like business manager and be like, so do you encourage your clients to be engaged in this stuff? And it'd be interesting to hear what they have to say about that. Yeah, yeah. Whereas if they do like especially the ones that are like, yeah, I'm not really, you know, I don't want to be involved. And their manager is like, well, then maybe I'm not for you because I need my clients to be involved. Right, right, right. Because and that that holds me accountable. That holds my firm accountable, whatever [00:50:00] it is, I don't know.

Greg Kyte: Well, that's and that is interesting that you bring that up because because one of the things I thought was interesting with the, uh, Kareem Abdul Jabbar story was that in hindsight, he kicked himself. So like, he was kicking his own ass for picking Tom Collins as his business manager. But looking back like there's there was nothing there were there weren't any red flags before he got in bed with Tom Collins. And as a matter of fact, I feel like for people who are not, you know, particularly [00:50:30] savvy with money, he kind of did what you're supposed to do. He kind of like I said, there was a couple other people in the Lakers organization that were already using him. So you go, because if you need a business manager, you ask around, who are you using? And people go, I'm using this guy. And then but but that's, that's a little bit where it maybe then falls because like, what do you like him? And they're going, I guess he's okay. He's a businessman, you know, right there. Right. Because so many times I heard that again with business owners that I know, [00:51:00] like just who who aren't I don't like not professionally, if that, if that makes sense. Like they're just friends of mine that I know. And I've asked them what they think of their accounting firm and they go, oh, there's a fucking accounting firm. I guess it's like I'm with them because I've always been with them and I guess they're fine. Like there's just no, there's no like, uh, you know not.

Caleb Newquist: And does that make you go like it does.

Greg Kyte: It does a little bit, but also like what [00:51:30] what what's what can you do. But, but here's, here's, here's what I'm getting at with all this stuff is I want to tell you the story of my favorite auto mechanic and my favorite auto mechanic. He's he is the best. He's done all the work on my 1973 Ford Bronco. I would go to him every for I will until he retires. I go to him for everything that I possibly can, but here's here's why I love him. Every time I roll in with a car, he's he's grumpy. He he's he's [00:52:00] like upset that I'm there. Like, he's pissed off that he has more work to do because my stupid old truck broke down again and I go, that's the guy who's gonna be treating me right, is the guy who's pissed off that I'm even his client to be to begin with, which is which? You made me think that where it's like, if you've got a business manager who's like, oh, you're you. Did you read the statement? No. Then I'm going to fire you as a client, because I don't want a client who's not going to be reading. Then [00:52:30] you go, oh, this guy, this guy, he's for real. This guy, he's the shit. He's not going to screw around with me. So there's these weird. You got to find him. It's not a textbook to figure out what those indicators are, but I believe that there's indicators out there for most professions where you can go. Oh, because. Because of this thing that maybe I don't like. That's actually the thing I should like the most about this person and, and lean into them as a professional. Well, that's it for this episode. [00:53:00] And remember, if you have 10,000 spoons when all you need is a knife, that's not so much ironic as it is poor planning.

Caleb Newquist: And also remember, someone out there is losing their goddamn mind because we never mentioned that Kareem Abdul-Jabbar is given name was Lew Alcindor.

Greg Kyte: But I mean, Caleb, 10,000 spoons is too many spoons. Too many.

Caleb Newquist: Spoons.

Greg Kyte: No, that's like like a large restaurant does not have 10,000 spoons. Golden [00:53:30] corral as a chain has 10,000. Any given Golden Corral does not have 10,000 spoons. So if you have that many spoons and you don't have a single knife, fuck you, fuck you. Eat your steak with your hands, you dumbass. If you'd like to drop us a line, please send us an email at oh my fraud at earmarks, cpp.com and Caleb, how can [00:54:00] people find you out there in internet land?

Caleb Newquist: Um, I'm on LinkedIn slash Caleb Norquist. Greg, if people want to hear you, you know, talk about spoons. Where would they go? Listen.

Greg Kyte: Here's what I want you to do. I want you. If you've got 10,000 spoons, send me your fucking spoons. I will send you one knife. And then. Problem solved. Or [00:54:30] also a LinkedIn slash Greg Kite.

Caleb Newquist: Oh, my friend is written by Greg Kite and myself. Our producer is Zach Franc. Rate review and subscribe to the show wherever you listen to podcasts. If you listen on earmark, you can earn free CPE, but you can't get any spoons. They don't give spoons away. No, no. Or knives or knives for that matter.

Greg Kyte: Zero cutlery. You can get CPE and you're going to be happy about it.

Caleb Newquist: Join us next time for more average swindlers and scams from stories that will make you say, oh my God, 10,000 spoons! [00:55:00]