Original subtitles

In this episode of American Greed, meet Randy Treadwell.

He knew all the ways to break into people's hearts, to break down that

trust. He claims he's a financial wizard, and he guarantees huge returns.

It was

a powerful inducement for people to give them, you know, whatever they had,

whether it was $5 ,000 or $500 ,000.

There's programs in Europe where you can get anywhere from 1%, 2%, and 3 % a day

on your money.

But Treadwell and his partners are stealing millions from investors.

When victims get suspicious, Treadwell has a plan.

Just leave them behind and start a new company.

I was really upset because I couldn't get my money back, but I had no idea the

massive realm of this thing.

Savannah, Georgia, 2001.

43 -year -old Randy Treadwell has led a straight, relatively quiet life.

He's the son of a Jacksonville preacher and lives with his third wife and their

three children.

He has been a salesman his entire adult life.

And during his sales presentations, he's never been shy to talk about his modest

background. I have a high school education, no college.

The Lord's already blessed me. I've made it a menace in my lifetime.

He sold clothes, insurance, and now nutritional supplements.

Randy Treadwell grew up in the church, and so Randy Treadwell was trained from

very early age on how to get a crowd going, how to convince a crowd. That's a

lot what a preacher does.

In 2001, Treadwell decides his ability to sell can make him much more money in

the world of finance, says former federal prosecutor John Owens.

He's very cunning, and he was able to take certain buzzwords you'd read about

business magazines or hear about maybe on a radio show about finances and kind

of combine them into this mix that sounded like he knew what he was talking

about.

Our returns are over 20 % monthly.

We pay out to our clients anywhere from 5 % a month to 8 .33 % a month. It's not

simple, but it comes down to interest.

Although he has no investing track record.

Treadwell convinces his friend Rick Sluder to join him in starting a new

investment company. He names it Quest International, but it has no relation to

the telecommunications giant.

Sluder, a 44 -year -old family man who lives 900 miles away in Tyler, Texas, is

an unlikely partner.

He was the manager of a water park at one time. He was not the kind of guy you

would look at to think, hey, he's going to be a great businessman.

But just like Treadwell, Sluder doesn't let his lack of credentials slow him

down, as later recordings of his sales pitch show.

It's 8 % plus per month best efforts.

But I can tell you it's absolutely incredible what we've set up.

He was Randy's right -hand man.

What Rick did do was bring investors into the scheme. He was not the main guy

the case, but he was a very important lieutenant to make this thing work.

Sluder opens a tiny office in his hometown of Tyler, Texas.

While Treadwell begins reeling in investors in the southeast, Sluder sets

sights closer to home.

In the fall of 2001, Martha Rhodes is making some big changes in her life.

For years, she's traveled the country selling pipeline leases.

But recently, she's returned to her hometown of Jefferson, Texas.

I was looking at other opportunities, too, to stay home near my mother, who

wedded, and lived out in the country at the time.

She's engaged to Dave Doris, a successful Houston business owner. And

years, she's also made friends with another Texan named Rick Sluder.

He and his entire family were very religious, always at church, always

something for the church. And I felt him to be a good friend and an upstanding

person.

Recently, Sluder's been telling her about his new company, Quest

Martha, unhappy with her current investment returns, is eager to listen.

I was looking for something to earn some money because I was trying to look

toward retirement.

He tells her Quest is pursuing high -yield overseas investments on the

exchange market to make quick returns.

Sluder explains she'll be loaning money to Quest for 90 days.

In exchange, he guarantees she'll make a 2 % per month return.

In other words, a 26 .824 % annual yield.

Your principal would never be in any jeopardy at all if they didn't meet

figures or above those figures.

you would always be able to get your principal back.

So that made me feel secure about that.

In November of 2001, she drives to his Tyler, Texas office and writes Quest a

check for $10 ,000.

I believed it.

I believed that I could do that, and I foolishly, you know, went ahead and

invested with him.

Martha's check is just one of many Treadwell and Sluder cash in 2001.

There's just one catch, according to FBI Special Agent John Ireland.

Everything Treadwell and Sluder are promising their clients is a lie.

The investments that they were claiming that they made that were generating

these astronomical returns just weren't there, and they were never there.

Next on American Greed, Quest International is just the start.

You've already made your 14 % in 60 days. You now have your billion back,

now you're going into another program that pays higher.

Randy Treadwell and Rick Fluter parlay their beginner's luck into a $65 million

scam. I don't know if it was beginner's luck or if these guys really had very,

very special talent, but these guys were Hall of Famers after their rookie

season.

Martha Rhodes has just written a $10 ,000 investment check to Quest

International.

Days later, her friend, Rick Sluder, Quest International's second -in

asks for more.

To convince her, he puts Rhodes on the phone with his boss, Randy Treadwell.

We talked extensively on the phone. He told me more and more about all this and

how wonderful it was, and they'd added some investments.

FBI Special Agent John Ireland says Randy Treadwell's sales talents could

convince even the most skeptical to invest.

Randy was the guy that got on the telephone when the deal needed to be

when the pitched investor really needed to be reeled in.

Subsequently, I went ahead and wired some money to Georgia.

Another $10 ,000.

It seems like a smart move.

The paperwork Rhodes is receiving says she's already making an 8 % return on

first investment.

Flush with success, Martha becomes an inadvertent quest salesman herself when

she convinces her mother to invest $10 ,000 as well.

I made the mistake of discussing this with my mother and showed her my

statements, and I was really excited about it, and so she decided to put some

money in it, very regretfully so.

Believing that the money is pouring in, Martha sends another $15 ,000 check in

December.

Nine months later, her $35 ,000 investment has more than doubled, at

paper. They gave me all these statements, and I sat there and believed

Operating from unimpressive offices like this one in Tyler, Texas, Randy

Treadwell and Rick Sluder realize they want to lure bigger investors.

They'll need to take their show on the road.

Our returns are over 20 % monthly.

We pay out to our clients anywhere from 5 % a month to 8 .33 % a month.

They begin hosting seminars that some clients record in restaurants, hotel

conference rooms, and especially churches.

They pitch to anyone who will listen, according to former federal prosecutor

John Owens.

It started at the very local level, started in the south, people at church,

people in the Savannah area.

But then it started spreading because the word got out, hey, these guys have a

great investment program. They're guys you can trust. They're Christians.

And then it started spreading around the country.

They use a variety of stories to hook investors.

But recorded sales meetings suggest the basic pitch is universal.

They've never paid less than their projected rates, and they guarantee

monthly returns.

There was no couching. This was not, we are going to do our best to return the

following to you, or we anticipate that we can make this money for you. The

statement was very definitive.

We can do this. You will not lose money.

And at the end of the day, those are powerful statements.

When asked why he's sharing such a successful program with small investors

he could be making billions on Wall Street, Treadwell says it's because he

simply wants to help the little man.

It's astounding. I mean, really, to be able to sit across from somebody and to

just blatantly lie, and then not to do it once.

but to do it hundreds of times.

Treadwell and Sluder tell clients Quest is pooling their funds to engage in buy

-sell transactions in overseas bank trading programs.

The pitch is complicated, but it sounds reasonable enough to trick even savvy

investors, says FBI Special Agent Maurice Hattier.

Buy it at $1 and sell it for $1 .20, and because of the volume of money that

they had involved through all these clients.

that they were able to make substantial returns.

It's a classic hustle known as a prime bank scam.

The con plays to investors by supposedly offering access to super -secret

financial programs that only the rich and powerful know about.

Any time someone tells you they have a special relationship with a bank, that

it's through the backside of banking or it's through a European banker, stay

away.

In fact...

Sluder and Treadwell are only investing enough to keep up appearances.

The rest of the money is disappearing as quickly as it comes in.

This thing was illegitimate from the beginning and just got bigger and bigger

and bigger and bigger and bigger as time went by.

But when people start asking for their returns, Treadwell and Sluder have a

problem. Cash flow.

What had happened was that the schedule that they had put out for payment of

returns, they just couldn't meet. They couldn't meet it with the amount of

that they were bringing in.

If their scheme collapses, Treadwell and Sluder will probably go to prison.

But in 2002, they come up with an ingenious way out and invite their

join them with a newer, bigger version of Quest they name Wealth Builders Club.

Essentially, it was the same group of people.

Same pitch, just different names, different bank accounts.

Amazingly, even unhappy clients follow, unwilling to risk losing their

investments altogether.

In one clever move, Treadwell and Sluder have essentially hit reset, buying

themselves time to grow and perfect their scam.

There was no investment success whatsoever at Wealth Builders. There was

nothing. It was simply recycling money.

taking money in, paying some of it to other victims to make them think it was

real profit, and taking the rest of it and stuffing it in their pocket.

Next on American Greed.

You got your money over here, make it 8 % plus best efforts. I mean, it's the

best of all the world.

Randy Treadwell takes his new company to even greater heights, tricking others

into spreading his lies.

They use your trust. They use your faith against you. And it's a very powerful

tool in the hands of a Ponzi schemer.

In 2002, Randy Treadwell appears to be a successful Georgia businessman.

But recordings of his sales presentations reveal he's also learning

multi -million dollar Ponzi scheme on the fly.

But Treadwell

can't close all the sales by himself.

He begins recruiting the very people he's ripping off to become unwitting

shills, according to FBI Special Agent John Ireland.

When you have friends, when you have family, when you have supposed investors

who are making money saying, this is the real deal, it gives you that sense of

confidence of, well, if these folks are doing it, certainly I can do the same.

Treadwell hosts biweekly phone meetings with his sales staff to discuss the

latest special investment deals.

And he eventually lures more than 90 senior member representatives to sell on

commission for him across the country.

They thought that from their perspective that the program was doing well and

that people were getting returns.

So these folks acted as kind of the recruiters and pitchmen at the same

Sales are done over the phone, on the Internet, and at seminars held in

restaurants, hotel conference rooms, and churches.

One sales agent who quickly rises up the ranks is 55 -year -old Larry Saturday.

The biggest thing we've got going is that when your money's moved, your money

protected.

It's not going to be where somebody takes it, gets it, and runs with it.

Saturday lives in Savannah near Treadwell.

Like Randy, he's a natural salesman, says former federal prosecutor John

Saturday's job was to pitch kind of the high roller investors and also to train

other people on how to spread the word of wealth builders.

Whether it's the lure of money

or Randy Treadwell's smooth charms, by 2003, Saturday is proving he can sell a

con as well as Treadwell can.

A nickel or dime, when you're talking millions of dollars, can turn into

millions and millions and even billions of dollars.

On paper, Treadwell's clients are earning outrageous returns, and soon

asking to see their money. To delay them, Treadwell hires a Minnesota

called Cash Cards International to process minimal payments back to his

investors. The victims were given.

essentially little credit cards where they could go and they could withdraw

from ATMs, and that was how the payments were being made back to them.

Treadwell funnels nearly $22 million into Cash Cards International, using

of the money to pay his growing sales force.

Although the Cash Cards arrangement appeared legitimate, FBI Special Agent

Maurice Hattier says Treadwell's game was rigged and clients never had much of

chance of actually seeing their money.

It wasn't a situation where you could go in and if you had a $10 ,000

investment, you could just take all the money out because that would crash the

system and create all kind of accounting nightmares for the company.

And some investors find the cards never work at all, as Martha Rhodes discovers

when she tries to access her $35 ,000.

I was asking for the entire sum of my principal investment.

And they said, well, we're going to do the cash cards, and you can pull out

something ridiculous like $500 a day.

She tries several times to take money out, but the card never works for her.

When she tells her friend Rick Sluder about the problem, he promises to fix

He said, oh, well, that didn't work out. We're going to reissue these.

We're going to do it different, and you'll be getting your card any day now.

And, of course, that never happened.

Martha decides she's had enough.

She and her fiancé Dave attempt to get her and her mother's money back.

We met him in his office one time, and then we went back another time and I

my mother with us.

And so the three of us accosted him about, you know, getting our principal.

Every time we would walk in his office, we'd sit down, and then he'd say, oh,

goodness, and he'd start shuffling papers.

Sluder never gives her or her mother's money back.

But he does try to recruit Dave to join his sales force.

Rick touted Dave to try to sell this. Oh, it's wonderful. Oh, he jumped all

me and had all these papers he's going to get me to read and look at them. I

kind of wanted to glance through them to see what it said.

So I took them. Of course, I threw them in the trash can.

At one point, Sluder practically admits he's running a Ponzi scheme when he says

he's waiting for $8 million from another investor to come in.

He said as soon as they had that in the bank, he would go ahead and write me a

check, and I'd get my principal back.

So I just said, in other words, you're going to rob Peter to pay Paul, you

The harder they try, the more elusive Sluder becomes.

Eventually, he stops answering their calls altogether.

Couldn't reach him at all.

I mean, you might as well not leave a message that he's not going to return a

call.

That may be because Treadwell and Sluder have found themselves in the same

trouble they had with their first company, too many people looking for

that no longer exists.

So what these guys did, which was very smart, was they just kept changing the

name. They could hit the reset button every nine months to a year and keep

and going and going.

This time, Treadwell takes his key sales staff on a luxury cruise, booking

lavish accommodations for himself and his lieutenants.

Once at sea, he makes his big announcement.

He's starting yet another new company, and everyone's invited to join him.

We're not going to call it Wealth Builders anymore. We're now going to

Learn Waterhouse.

Learn Waterhouse is a reset, just like Wealth Builders Club was a year earlier.

But to keep his scam from imploding, Treadwell needs more cash flow than

He decides to add an expert to his inner circle.

When the scheme first began, financially it was relatively simple.

It was basically paying checks to Randy Trevo and Ricky Fluter in the names of

their companies, either Wealth Builders or Quest.

But over time, Trevo realized it would be good to have some insulation.

So in comes a lawyer named Arnie Acosta.

40 -year -old Arnufo LaCosta is a Texas attorney with a checkered past.

He's been disciplined twice for minor bar violations, and apparently he and

Treadwell share some common connections.

Somehow, LaCosta got hooked up with Treadwell. They're like -minded people.

had a common goal.

Let's rip off as many people as we can, and they succeeded at it.

Adding a lawyer like Arnie Acosta to the mix makes Learn Waterhouse look more

legitimate to new investors, says FBI forensic accountant Aaron Rich.

The use of a lawyer gives it the guise of it's more authentic because, you

this has to be legitimate because a lawyer is involved, right?

Acosta takes control of the contracts.

and handles the money that's flowing into Learn Waterhouse.

The victims or the investors would write a check directly to Arnaulfo Acosta, or

they would write a check to his law office, at which point he would deposit

check into his attorney -client trust account.

By July of 2004, over $24 million is processed through Acosta's account.

The money is supposed to be used for future investments.

But instead, it pays off early investors, sales staff, and goes into

of Treadwell and his partners.

Next on American Greed, Treadwell uses his charm to sell his scam again.

But this time, he faces a skeptic. I told him that something doesn't smell

right. Something doesn't smell right.

By 2004, Learn Waterhouse has more than 1 ,700 clients scattered across the

United States, thanks to Randy Treadwell and his sales force.

FBI Special Agent Maurice Hattier says Treadwell has his hands full finding new

investors to lure in.

Randy Treadwell's not sitting behind a desk at a corporate office.

He's out, you know, at restaurants, at churches, at different places, pitching

people. That's the lifeblood of a Ponzi.

Treadwell often goes back to his roots, inviting himself to local churches and

speaking directly to the congregations about his programs.

FBI Special Agent John Ireland says that's because he knows that churchgoers

will be more trusting when the son of a preacher man comes calling.

That's one of the aspects that really surprised me, which is the ability to

in the church and talk to the pastor and the congregation and give this pitch,

knowing that all that you're doing at the end of the day is just taking that

money.

In October 2003, accountant Charles Wilson is asked by the pastor of his

Jacksonville church if he's heard of Randy Treadwell.

Some members of the church had asked him about Learn Waterhouse and an

investment opportunity.

He didn't know anything about it. I had not heard of it at that point.

Treadwell pulls out all the stops to impress Wilson, promising his usual

guaranteed returns for any church member who invests in their programs.

They invest money overseas overnight, and they're making a quarter of a

return on their money overnight. But if you take that quarter percent over 365

days, what is that 90 -plus percent return on your money?

On the surface, it all sounds good, which is why Wilson thinks so many

who didn't know better fell for the con.

You get retired individuals that are on fixed income. They need additional

money. They start hearing that instead of getting what the bank's paying them,

they're hearing that they can get 20 % a month.

Yeah, they're going to listen.

But Wilson is a certified public accountant.

He doesn't buy the promises for a moment.

He could get... you know, even a 5 % per month return, he could be in Wall

Street with trillions of dollars being thrown at him.

Wilson advises his friends in the congregation to steer clear of Learn

Waterhouse. But the lure of money proved stronger than his warnings.

And several members ignored his advice and sent their money to Randy Treadwell.

As recordings of his sales presentation show...

a company with integrity and honor.

The power of his lies is undeniable.

And bottom line is, our clients get paid, we get paid, everybody's happy,

win -win.

By 2004, Treadwell and his partners have taken in nearly $65

million.

Much of the money is used to keep the Ponzi scheme going.

But at least $6 million goes straight into Randy Treadwell, Arnie Acosta, Rick

Sluder, and Larry Saturday's pockets.

Randy had the limitless ATM.

As long as he could keep bringing people into this scheme, he could keep

spending, which then gave him even more incentive to continue to lie to people

and cheat people to feed this monster he had created.

Treadwell himself collects nearly $3 .6 million.

Although his wife is never implicated in his schemes, she does benefit nicely

when he builds her a brand -new dance studio in Savannah.

His wife's dream was always to have her own dance studio.

People spend their whole life to build up a dance studio, and Mr. Treadwell

had it handed to her, bought with victims' money.

Treadwell develops a passion for trouble.

His clients expect him to score big returns, and he certainly tries, but not

their benefits, says FBI forensic accountant Aaron Rich.

Mr. Treadwell had lots of expenses at the different hotels in Las Vegas, the

Bellagio, in the Four Seasons.

You see lots of air travel to Las Vegas also.

And lots of cash withdrawals at different casinos in Las Vegas.

He must think the good times will last forever.

He buys and renovates a mansion in an exclusive gated community.

He hits the town in a Lincoln Navigator.

He also buys a $100 ,000 Sea Ray Sundancer to cruise the intercoastal

between Savannah and Jacksonville.

I'm not talking about a bass fishing boat or a rowboat. This is the kind of

thing you take people out on in the open seas, a very, very nice boat.

But all of the principals, Randy Treadwell, Rick Sluder, Larry Saturday,

attorney Arnie Acosta, take advantage of the jewel in the Learn Waterhouse

crown.

It's a luxury box at All -Tel Football Stadium, home of the Jacksonville

Jaguars. They had it for two seasons, and they spent over $300 ,000 on those

seats. And on top of the box seats, we could see transfers or payments to the

Jacksonville Jaguars just for regular individual tickets of several thousand

dollars on top of that.

We think that was one of his grand plans, was he was going to host the

Learn Waterhouse party at the Super Bowl.

after the 2004 season.

The box is the perfect place to wine and dine clients and to reel in more

investors. If you have a luxury box at an NFL game, you've made it. You're

legitimate. You're not a fly -by -night operation. Only real businessmen could

have something like that.

In 2004, Treadwell's living the good life, but his clients are getting fed

Unable to access their money, Some dissatisfied customers have begun

state securities regulators in Iowa and Alabama.

Treadwell finally starts running into some problems.

Some of the local authorities, local regulatory authorities, started looking

Treadwell very, very carefully. But he still survives.

He still manages to bring in people's money.

Randy Treadwell's been running his scam for three years, and these recordings

suggest he's not ready to stop yet.

Not one.

of our clients has ever lost one penny in five and a half years, and we're not

going to start now.

Amen.

Coming up, the tables turn, and Randy's own words betray him.

I assume that you guys put your own money into this because you believe in

much.

Absolutely.

I was blown away not only by what these guys were saying, but the amount of

money they were stealing.

We've got to stop these guys.

To view FBI undercover video of Randy Treadwell selling his schemes, visit

AmericanGreed .CNBC .com. Follow us on Twitter at American Greed TV.

We'll be right back.

By early summer 2004, complaints filed with state regulators in Alabama

have helped bring Learn Waterhouse to the attention of the FBI.

And federal prosecutor John Owens decides to do something about it.

One thing with a guy like Randy Treadwell is he loves to talk.

So the plan was, we've got to get him talking.

In June, FBI Special Agent Maurice Hattier goes undercover for a series of

with Randy Treadwell, Rick Sluder, and Larry Saturday.

Hey, Randy, can you give me some...

idea of just, you know, the track record.

I mean, have you guys ever missed a payment or been late on a payment, you

to an investor?

No.

Hattier says he's representing a high -rolling investor with $12 million, and

he's thinking about putting it all in Learn Waterhouse.

We do nothing unless it is totally 100 % guaranteed.

of what we call a no -risk transaction.

Treadwell, Sluder, and Saturday eagerly take the bait.

They

don't

miss a beat when they're responding to questions. There's no hesitation.

They're very engaging personalities.

Let me say this to you.

I've had my companies, okay, in business over five years.

There's not been one client in 29 countries that's ever lost one cent in

company. Not one cent, amen.

The recordings were fantastic, and we knew they were false because the FBI

that, for example, Martha Doris had lost her money long before these

conversations occurred.

And then you have Randy Treadwell saying no one's ever lost a penny investing in

Learn Water Health.

But Hattier's more interested in revisiting a previous conversation

with sales rep Larry Saturday, during which he promised an unbelievable 500 %

investment return to a confidential informant.

At the end of that two -month period, it's a 500 % return on that

$3 million.

500 %?

Which turns out to $15 million. That is correct.

When Hattier brings up this outrageous offer, it takes Randy Treadwell by

surprise, but just for a moment.

Randy Treadwell just jumped right on.

I mean, he didn't try and back off from it. He bought into it.

You're a great client of ours, and as those programs open up, we're the first

tell you that, hey, it's now available.

Investigators realize Treadwell's been making these outrageous promises for

years.

and he's raked in more than $60 million.

But only $5 million has actually gone into legitimate investments.

The rest has been used to pay early investors or on commissions to his sales

force and his lavish lifestyle.

Leading to the inevitable flame -out all Ponzi schemes face, says FBI Special

Agent John Ireland.

Mathematically, these things can't stay alive for more than a few cycles or

generations of investors.

And that's exactly what happened with these. Eventually, they kind of

under their own weight.

On October 13, 2004, the feds come knocking in Texas, Georgia,

and Florida.

The FBI, through its different divisions, executed search warrants

United States.

Learnwater House's offices, private residences.

Arnie Acosta's law firm. There was numerous law enforcement action

the United States.

No arrests are made.

But that same week, the Securities and Exchange Commission files a complaint

against Learn Waterhouse, effectively freezing the company's bank accounts.

And that was very important because we didn't want Treadwell burning through

what was left of people's money.

Of the $65 million that has gone into Randy Treadwell's companies, Less than

million remains.

When a Ponzi scheme stops, it really stops because there's no more money

in. And because there's no legitimate business underneath it, the whole thing

collapses. So Treadwell went from having that limitless ATM to basically having

nothing overnight.

Treadwell begs his clients not to snitch to the FBI.

The idea was that if we can get your money back to you...

don't participate, don't disrupt things, and there became a very active campaign

of trying to get people to stop talking to the FBI.

One investor in Georgia is out $500 ,000.

With the FBI circling around Learn Waterhouse, he figures he has some pull.

So he arranges a sit -down at his office with Treadwell and Saturday to get his

money back.

They're telling you it's a Ponzi, but it's not.

What Treadwell and Saturday don't know is that this investor has invited the

feds to watch as a hidden camera rolls.

We had our victim

investor who got to ask some very pointed questions. What's happening with

money? Is this money secure? Am I ever going to see this money again?

Randy, what's wrong with you doing what you said you would do if I would not go

to FBI or talk to them or help them out with this thing? If you give me

a note with my $500 ,000 back and I've got a note, period.

I will sign it.

Treadwell's grasping at straws. He even offers the man an opportunity to invest

in another venture, the supposed recovery of a 500 -year -old Spanish

filled with gold that Treadwell claims has just been found.

A billion dollars in assets underneath the bottom of the ocean. Oh, a billion

dollars. Yeah, and 10%, you know, for the salvage belt, you can get 10 % of

that. And it was a fantastic opportunity to get the pitch live on camera.

The video really does kind of speak for itself.

It's the pitch in its purest form.

But it's not enough to convince the investor to give him more money.

though, does dodge paying back the original $500 ,000.

Next, the feds move to shut Treadwell down.

But he still can't resist trying for one last score.

Even after he's been indicted.

Treadwell is still trying to rip off people.

On September 8, 2005, Randy Treadwell, Larry Saturday, Rick Sluder, and Arnie

Acosta are arrested on charges of wire fraud and conspiracy.

for their roles in running a four -year Ponzi scheme.

They are accused of bilking 1 ,700 investors in 39 states out of nearly $65

million.

Treadwell's family posts a $1 .5 million bail.

And you would think, okay, you've been indicted, time to play nice, time to do

the right thing.

Randy Treadwell didn't do that. He tried to scam another individual.

In November, a retired Florida businessman approaches the FBI with a

story. He says Randy Treadwell has been asking him for $300 ,000, allegedly to

free a kidnapped foreign official.

Treadwell claims the deal is being channeled to the United Nations and is

actually a win -win investment.

Randy Treadwell claimed that if they paid $300 ,000 now, they would get the

,000 back plus another $300 ,000. Thank you.

because this was to rescue someone who had been kidnapped.

When they go to withdraw the money, a security check at the bank reveals the

story is just another scam.

Treadwell is rearrested for violating the terms of his bond and spends the

of his pretrial time in jail.

I think it was a lifestyle for him. He only knew one way. And again, that was

his only source of income.

And once the issues with Learn Waterhouse arose and that sort of dried

had to find other means to put money in his pocket to pay his bills.

Two weeks before the trial is set to begin in 2007, attorney Arnulfo Acosta

abruptly pleads guilty to conspiracy charges.

He's suspected of stealing more than $2 million from Learn Waterhouse investors.

He received, I believe, eight years in prison or so. But the other gentleman

wanted to continue their fight.

They wanted to continue going to trial. That's what happened.

When the trial begins in San Diego, Martha Rhodes, who lost $35 ,000 to the

and whose mother lost another $10 ,000, is the first person to take the stand.

That was probably their best representation for the smaller investor

apparently they built these people out of millions.

Martha and other witnesses share similar stories of how the defendants used

religious connections and outrageous guarantees to steal their life savings.

During a recess, she comes face to face with the man who stole her money, former

friend Rick Sluder.

I was sitting at a bench and he leaned down and kind of gave me a little

hug and said, how are you? And I said, not too well.

I mean, I thought how ludicrous to be asking me this.

At trial, the jury learns that Treadwell's greed even extends to

partners. Though he's taken more than $3 million for himself, he's only given

right -hand man Rick Sluder $200 ,000.

And sales agent Larry Saturday received even less, taking only $180 ,000.

Treadwell, Sluder, and Saturday claim they never meant to steal any money.

Instead, they try to pin the blame on the one defendant who's already pleaded

guilty, former attorney Arnie Acosta.

You've got to blame someone.

So why not blame the crooked lawyer from Texas?

Why not blame the guy who's pled guilty?

And that's what they tried to do. The jury wasn't buying it.

Four weeks later, the federal jury finds Randy Treadwell, Rick Sluder, and Larry

Saturday guilty.

And the judge's response is harsh.

He sentenced Randy Treadwell to 300 months, or 25 years.

He also came down very hard on Ricky Sluder, sentencing him to 168 months.

Larry Saturday, the judge recognized, came in a little bit later and sentenced

him to 60 months.

Randy Treadwell, the former salesman and preacher's son with no prior criminal

record, has traded his freedom and family for a 25 -year prison sentence.

Apparently it was all greed.

Greed, lies, and everything.

He's destroyed hundreds of lives in the process.

Many have lost their life savings to a con artist they thought was a friend.

People think, oh great, he's found guilty, I'm going to get my money back.

Well, no.

The money's gone.

Your investment went for that Super Bowl, that boat, that car, that dance

studio.

It's gone.

There is no money back. So often victims in these cases get back pennies on the

dollar, if anything.

Martha Rhodes has learned to accept she may never see the rest of her money

again.

A little over $1 ,500. $1 ,500, brother.

So it's a drop in the bucket, but it was better than nothing. And they just

called it first distribution.

Haven't heard another word from them since 2010, so I don't know.

when that might be forthcoming to get anything else, if it will ever be.

Treadwell and his partners used friendship and religion to trick their

into handing over millions.

But when friends like Randy Treadwell come asking for money, former prosecutor

John Owens has some timeless advice.

Go with that gut instinct. If it doesn't sound good, stay away from it.

There is no gold at the end of the rainbow.

There is no money growing on trees. It simply doesn't exist.

What is at the end of the rainbow?

And what does grow on trees are fraudsters.