All language subtitles for American Greed s09e05 The Cash King

In this episode of American Greed. Hey,
everybody. James the Cash King here.

Investment advisors James Duncan and
Hendrix Monte Castro claim to have the

tools to make investors rich.

We're the 1%. They're the 99%. All the
sheep go to Bank of America.

All the stallions come work with us.

But the home purchasing program they
promote leaves investors on the hook for

more than $100 million of debt.

That wasn't financial freedom. It was
financial chaos.

While clients face foreclosure and
bankruptcy, this slick -tongued duo

through nearly $30 million of their
money.

That's not bad.

Visionary entrepreneur James Duncan is a
man with a heart of gold.

Or so he says.

I care about what you want in life.

And I want to talk to you and find out
what you want. And I will run through a

brick wall to make sure that I do
everything in my power to help you get

you want.

More like get what he wants.

By the time law enforcement catches up
to him in 2008,

He has masterminded a $125 million
investment scheme that victimizes

investors.

But this story begins under the sunny
skies of Southern California in 2003,

he and a friend named Hendrix Monte
Castro turned this modest two -story

in Murrieta into a company called
Pacific Wealth Management.

a name also used by a legitimate company
in San Diego that has nothing to do

with the scam.

The plan?

Convince investors that they can find
hidden treasures that no one else can

We are a counterintuitive organization.

We find gold where gold does not exist.

Through telemarketing, word of mouth,
and seminars, Duncan and Monte Castro

about the magical returns to be made in
real estate investing.

So you buy a house for $500 ,000, and
basically a year later it's worth $550

,000. So there you have it. There's your
10%. But yet, what if you bought that

property with a 5 % down loan?

So you took $25 ,000 out of your pocket.
You locked down a $500 ,000 house. Now

it's worth $550 ,000. I don't know about
you. I just doubled my money.

What if you got a zero down loan?

Does the word or term infinite return
ring a bell?

According to Duncan, it's a system he's
mastered that can break the chains of

financial uncertainty.

I have freedom.

I get to do what I want, when I want to
do it, and how I want to do it.

Nobody tells me what to do, I can tell
you that.

I'm pretty happy with how things are
going.

So, am I an expert?

I don't know.

Maybe. He wants to talk that he's not an
expert. He's really not.

other than working out a way to get
money from people.

And he's good at that.

Brent Westwood and Craig Johnson are
investigators for the Riverside County

District Attorney's Office in Southern
California.

And according to them, almost every
claim made in these seminars is a gross

misrepresentation. I will tell you this.

I own a portfolio of roughly 90, 93
property.

Through our investigation, Craig, did we
see that he had 93 properties in his

name? He didn't have any properties in
his name. Exactly.

He can, however, identify and facilitate
investment home purchases for his

clients. He says he'll even find tenants
to rent out the home, or better yet,

flip it for a nice profit in a forever
-rising real estate market.

Unfortunately, he doesn't tell his
clients everything.

Does the word infinite return ring a
bell? Remember that $500 ,000 property

can earn an investor an infinite return?

There's a little trick he and Monte
Castro play in the middle of the

transaction. It's how they find gold
where gold does not exist.

It goes like this.

Their company finds a home that is
originally appraised at $580 ,000, but

selling price has dropped to $500 ,000.

They buy the house for their client for
the $500 ,000, but use the original

appraisal to take out a $580 ,000 loan
in their client's name.

Almost magically, $80 ,000 has been
conjured out of thin air.

That money kicks back to Pacific Wealth
Management in what they call a

concession fee.

Being $580 ,000 in debt for a $500 ,000
house is a bad start for the client.

But Duncan and Monte Castro tell
investors that the concession fee will

to make the mortgage payments until the
house is resold for a profit in the

booming market.

Any cash left over will be used as
capital to invest on the client's

I've been in the business almost 16
years.

I've sold every type of investment,
tried every type of investment known to

mankind. Trust me, I've tried it. They
were going to be invested in real

stock, foreign currency. It was
relatively vague. There was no, there

lot of specificity to it.

Between 2004 and 2006, Duncan's company
purchases $118 million

worth of properties in clients' names.

netting themselves more than $10 million
in concession fees.

And almost none of it is invested in
anything but themselves.

When American Greed returns, Duncan and
Monte Castro take advantage of their

clients' faith in people and their faith
in God to do the devil's work.

Unfortunately, there are very crafty,
very evil people out there.

that are very happy to take your money
from you.

From their home base in Murrieta,
California, James Duncan's Pacific

Management is always looking for a new
way to lure in clients.

About a month and a half ago, someone in
our company had this really great

bright idea that we need to try a
seminar.

Whose idea was that?

It was actually my idea.

We were invited to South Coast Winery
Seminar, and it was interesting.

Deborah and Herman Weber have been
married 14 years and have three grown

children through previous marriages.

When the two go to the seminar, their
interest is piqued.

At that point, it all looked really
good. It sounded real good.

And they were giving presentations about
how wonderful the company is and how

it's making so much money.

Even before attending the seminar, they
are contacted by a representative of

Pacific Wealth named Charlie Choi, who
explains that becoming a client isn't as

easy as just handing over your money.

There were three rules to become a core
client.

There was someone who would give three
years.

to the company, ask no questions, and
give them full financial control.

So as a core client, basically you were
doing what you were told.

The consequences for not following the
rules are simple.

You need to do what we say. If you
don't, you're fired.

I mean, I don't know how to sugarcoat
it. I mean, that's just the way it is.

just can't do business with it. That's
okay. Go work with Shearson Lehman or

Smith Barney or New York Life or MetLife
or the Snoopy company or whatever it's

called. I mean, that's fine.

But you have to do what we say. If we
tell you to do 100 things and you do 99

and the 100th you don't, you can't do
business with us. The rules make Weber

nervous, so she decides to look into the
company a bit deeper.

I did research the name of the company,
Pacific Wealth Management.

I found out they were a company based
out of San Diego.

Unfortunately for Weber, it's just
another game of deception Duncan is

There was a legitimate Pacific Wealth
Management.

And Duncan's Pacific Waltz management
had nothing to do with them, although he

was using their name.

And their credibility.

When Weber asks about it, she says Choi
does nothing to clarify the distinction.

I mentioned it to Charlie Choi that I
did investigate your company, and I have

discovered that you're a good company
out of San Diego.

And he said yes.

It lulls the Webbers enough to let
Duncan's illegitimate Pacific wealth

refinance their house.

Then the Webbers hand over the $190 ,000
of equity.

With housing booming, the refinance is
for $130 ,000 more than the original

price the Webbers bought the house for.
And the monthly payments increase by $2

,200 a month.

But according to Duncan's company,
that's where the equity comes in.

So we're paying our initial payment, our
original payment, and then they pay

everything on and above because it's
money coming from our investment.

Fortunately for the Webbers, Duncan's
Pacific Wealth never buys a property in

the Webbers' name.

But dozens of investors aren't so lucky.
For some people, even though on their

own they wouldn't be able to qualify to
buy even one house, Pacific Wealth would

go out and they would buy them two,
three, sometimes four houses.

To get unqualified buyers in the front
door would be a near impossible

proposition.

So Duncan's company falsifies loan
applications to get in through the back.

They sometimes lied about the core
client's income. So even if the core

was, say, making $80 ,000 a year, they
would lift the income at a much higher

amount. But more commonly, what they
would do is they would say that the

also had a brokerage account someplace
and that the brokerage account held

hundreds of thousands of dollars.

But even if the lies on the applications
aren't enough to get a loan approved,

they have a secret weapon, a mortgage
lender named Cindy Kelly. I think it was

obvious from the evidence we saw, emails
we saw back and forth, that she

obviously knew that she was pushing
through fraudulent loans.

Kelly's help gets loans approved, but
she leaves investors high and dry.

We bought the house in 2000.

So we've been here 14 years and love
this house.

Love this house.

But this is the house that, you know,
we're upside down in. Tucson, Arizona

natives Clancy and Dale Hahn first hear
about Pacific Wealth Management from

Cindy Kelly in 2006.

The Hahn's have been close friends with
Kelly for more than 20 years and have

seen her develop into a presumably
successful businesswoman.

She worked hard. I mean, she would work
from morning till night, and she would

invest and save, and she was very good
at that. So when she started to become

successful in this, she was excited
about it. Who wouldn't be?

By the summer of 2006, the Hans have
also done well for themselves.

We were in this house, affordable house
payment.

had some savings set aside. And so we
were, financially, we were in good

situation.

For Clancy, it's a near -perfect
scenario in a happy marriage going on 24

with two children and living in her
dream home.

Oh, yeah. I thought, we'll buy this
house and we'll pass it through the

generations and have that homestead
feeling where this has been in our home

seven generations, to be that family.

Cindy Kelly tells them that by investing
with Pacific Wealth Management, they

could achieve their dream of a secure
future even sooner than they think.

So we thought, gosh, if we could pay
this house off early, then it's paid for

and done.

It's kind of out of the way, and we can
focus on giving to people and helping.

Helping people is exactly what Duncan
and Monte Castro say they want to do.

And when the Hans reach out, it's as if
the company is preaching to the choir.

Both my wife and I are very, very strong
Christians.

And in our conversations with PAC wealth
people, you know, they came at it with

that affinity of coming in as Christian
folk.

It's a hard issue. That's what it's
about.

That's why we're here. It's a hard
issue. It's basically being a good

with what God has given me. That's what
it's about.

Eventually, the horns take the plunge.

They refinance their home and have faith
that Duncan's Pacific wealth can turn

the $71 ,000 of equity into the
financial independence they're promised.

It's our hearts to do for others. And so
when we saw an opportunity to be able

to give back to our church on various
projects and missions to help.

even our own family members, to be able
to do that. It wasn't necessarily self

-serving. I mean, it was really a
thought of, hey, we'd have some more

freedom to do more for others.

Little do the Hans know, they aren't on
the path to financial freedom, but

financial enslavement.

The refinance nearly doubles the Hans'
monthly mortgage payments.

But the company says they'll wire the
difference into the Hans' bank account

each month to make the payment.

And they did.

They did for the first four months. So
in November, it was wired directly into

our bank account.

In December, in January, and then in
February.

And guess what happens in March?

When American greed returns.

You can do this all night.

Duncan and Monte Castro fleece millions
from investors with their slick tongues.

Now they want to tap into their minds.

I think that they were kind of an idea
that they can control people if they use

their higher powers more effectively,
use their minds more effectively.

In 2006, in Murrieta, California,

James Duncan and Hendrix Monte Castro's
investor pool is growing into the

hundreds, and it's thanks mostly to an
extensive word -of -mouth campaign.

The way Pacific Wealth worked is that
they brought in a few initial core

clients. Then those initial core
clients, some of them became what's

referral partners, and that meant that
they would go out and they would recruit

their friends.

Cindy Kelly and Charlie Choi hunt down
potential investors, as does a man named

Tuan Du, who infiltrates the martial
arts community in San Diego.

Hendrix Monte Castro's mother, Helen
Pedrino, even gets in the act.

She was a nurse, so they recruited
through the nursing and the medical

community.

She was also Filipino, so they recruited
through the Filipino community.

I'm sorry, I'll give you to them.

They know what to do. And the end
result, I don't know what they're doing

between that, but the delivery, they
deliver things.

Duncan described her, she was like a
machine out there, just recruiting

everybody she could. But according to
Duncan and Monte Castro, the network

doesn't just reach out towards the
everyday Joe.

It also stretches in the opposite
direction towards captains of industry.

We just got involved recently in an
organization called the Positive Deviant

Network. Kind of a strange name.

Positive Deviant Network.

At times it seems like there were parts
of the truth involved with what they

were saying, but there were complete
misrepresentations. We know the guys

started AOL. We know Bill Gates' best
friend. What's that guy worth? A hundred

billion dollars or a couple billion
dollars?

Are any of you curious what Bill Gates
is currently investing in? I'd like to

know. We have a guy who, he's personal
friends with the trade minister for

China. Everybody in this room are within
five people of Ben Stiller, of knowing

Ben Stiller. We're within six people of
knowing what the president of the United

States is investing in.

You can do this all night.

They made it sound like they could be
talking to Colin Powell within a couple

phone calls.

Or that they could be talking to the
president within a couple phone calls

because of the people they knew through
the Positive and Deviant Network.

Just as they trade on the name of the
legitimate Pacific Wealth Management of

San Diego, Duncan and Monte Castro once
again bend a lawful group's reputation

to match their devious ends.

That's how we make money.

That's why we run circles around Merrill
Lynch.

That's why we run circles around Lehman
Brothers.

That's why we could care less what New
York Life does. We don't care what B of

does. We don't care about what they do.
We're the 1%. They're the 99%. All the

sheep go to Bank of America.

All the stallions come work with us.

Between 2004 and 2007,

Duncan's Pacific Wealth Management has
bought more than $125 million in

in their clients' names.

while pulling in almost $30 million for
themselves out of concession fees and

investment capital.

And Duncan has an entire network of
subsidiary companies he can use to

all that money.

I think there were probably eight or
nine different shell companies that Mr.

Duncan owned. They had addresses, but
they did not have any actual operations.

Despite the network of shell companies,
Duncan intentionally keeps his name from

being associated with any of them in a
clear effort to conceal his involvement.

Even the flagship enterprise has a
figurehead president, a man named

MacLeod. Some of you may know me as Moe,
so you can call me Moe.

James Duncan took Maurice MacLeod under
his wing and started sort of teaching

him how to sell and teaching him how the
business worked.

I'd like to ask you guys to keep an open
mind because this isn't for everyone.

And at a certain point, James Duncan
decided to install Maurice McLeod as the

president of Pacific Wealth Management
because, again, Mr. Duncan wanted to

his name out of the paperwork.

Duncan may keep his name clear of the
businesses, but he and Monte Castro's

hands dig deep inside their coffers.

In 2004, they spent $1 .7 million on
their own personal expenses.

In 2005, it was $4 .8 million.

In 2006, sort of near the peak of the
fraud, they spent almost $10 million.

They lived in very expensive homes.

Mr. Duncan, for example, the home he was
in was a little over $3 million.

He took lavish vacations to Hawaii, to
Malta.

And then he also, you know, despite the
fact that he told investors that he was

a good Christian and he was a man of
God, he used a lot of money to go to

and not only gamble a lot of the money
away, but routinely use prostitutes.

Mandalay Bay, $1 ,056.

The same day, Mandalay Bay, $2 ,089.

$10 ,000 at the Grand Waialea in Hawaii,
over $10 ,000.

For those of you that have never stayed
at the Grand Waialea, I'm telling you,

stay at the Grand Waialea. That place is
off the charts.

Between 2004 and 2007, they spend more
than $21 million of clients' money on

personal expenses.

And it's not just the big three getting
the cash.

They're spreading it around to friends
as well.

One of them was a lady named Shannon.

And we eventually figured out who she
was.

And it was James Duncan's mistress.
James Duncan was married, and he had a

mistress that he was paying for.

She was a stripper and went by the name
The Honey with the Money.

And her and Duncan, and I think
Montecastro, were trying to set up a

in Orange County as another way to make
money. And they were using investor

money to set up the strip club.

That's what gets us excited.

We love entrepreneurs.

We're entrepreneurs, so we love them.

They never actually opened up, but they
were certainly in the research phase of

where they could open up. Duncan was
clear. They wanted to do that.

But a strip club isn't their most
reckless investment.

That would be the one they make in a
company called BioCybernaut.

Duncan and Monte Castro spend $195 ,000
of investor money to undergo training

sessions designed to teach them and
their associates how to control their

waves.

I think that there was kind of an idea
that they can control people if they use

their higher powers more effectively,
use their minds more effectively.

Duncan and Monte Castro put so much
belief in the company that they want to

become a part of it.

They send $550 ,000 of investor money to
the doctor in charge of BioCybernaut,

thinking the investment is buying a
stake in the company.

But who's the one playing mind games?

The doctor took over $500 ,000 and built
a home.

So they eventually, Duncan and Monte
Castro, eventually asked for the money

back, and they were told thanks for the
gift and never got the money back.

Losing money is a feeling their
investors can relate to. They just don't

yet.

When American Greed returns, Duncan and
Monte Castro have a surprise gift for

their clients.

And it's almost literally not worth the
paper it's printed on.

Each dinar is like worth .0000006 cents.

By the summer of 2006, James Duncan has
been robbing Peter to pay Paul.

And Peter wants his money back.

Duncan's Pacific Wealth Management has
been trading on the reputation of a

legitimate company of the same name to
take out more than $100 million in home

loans in their clients' names that they
promised to cover.

But they're having trouble making good
on that promise.

Keep in mind that, you know, I don't
know that on any of the investment home

purchases, 20 % was put down. I think a
lot of times it was 100 % financing.

or 90 % financing, so there were just
massive amounts of debt that were still

outstanding. In their desperation to
keep up with the payments and keep the

fraud going, they'll pitch anything to
try to raise more money, no matter how

absurd it may sound.

We're going to come at you with
investments that don't make sense, and

going to ask you to trust us because
that's what the 1 % is going to say or

and the other 99%, your brothers and
your aunts and your uncles and your

neighbors.

And the school teachers and your soccer
coach for your kids are all going to

think you're crazy and are going to go,
what in the world are you doing? And

you're going to have to believe in us
because we're the 1 % and they're the

Here's one investment from the summer of
2006 that a few aunts and uncles may

find crazy.

They began opening credit card accounts
in people's names or opening lines of

credit and asking people to draw down.

either the maximum amount or close to
the maximum amount, and wire that money

a Duncan -controlled company.

One of the clients who receives credit
cards is Deborah Weber. They tell her

other investors that they will pay the
monthly minimum fee on the cards and use

the rest of the cash as investment
capital.

It may sound strange, but it all comes
back to the rules of being a core

Do what we say, no questions asked.

They told us if we did not get all of
the money, all the cash advance, not

the cash advance, but I mean call in,
talk to the manager and get every single

cent you can possibly get, that they
would drop us.

It's not going to feel good, but it's
going to be the right decision.

Afraid of losing the $190 ,000 they've
already invested.

The Webbers eventually wire $40 ,000
more from credit cards registered in

name to shell companies associated with
James Duncan.

To many clients, it may feel like
they're under siege.

So it should be no surprise when the
next investment scheme leads them into

actual war zone.

Well, we actually have a contact in
Jordan that will actually go into Iraq

buy currency.

We actually just bought some currency,
didn't we?

Yep. This is what we received. I believe
it was around January 25th.

We pulled it out. We counted them.

And it turned out to be Iraqi dinars.
They had made mention off and on during

that they were investing in foreign
currency.

You know, but they didn't say, hey,
you're going to be receiving dinars. I

they never said anything like that.

In their depreciated state, the package
of dinars the Webbers receive are only

worth about $6 ,000.

Still, in seminars, Monte Castro
explains that their projections show

a $2 ,600 investment in Iraqi dinars
will be worth $800 ,000 in just a few

years. We have every reason to believe.

I'm sorry. Can I jump in for just a
minute? So let's just make sure we're

the same page here. $2 ,600 investment.

could be worth $800 ,000.

That's not bad.

It keeps some investors like the Webers
believing in that pot of gold that

they've been promised and primes them
for the next big scam Duncan and Monte

Castro put out there.

A telemarketing script obtained by the
Riverside District Attorney's Office

tells the tale.

Well, the partners came out of the
meeting and announced the most amazing

I've ever heard. You invest $4 ,000,
you'll earn $30 ,000, or you invest $5

,000, you will earn $40 ,000.

Be like this.

For core clients already invested with
their home equity, the script offers

desperate suggestions on where to find
more money to hand over.

Some common places to look for hidden
cash.

Savings and checking. Maybe a savings
account you forgot about. Business

account. Cash hidden under the bed or
somewhere in the house.

look for your coin collections, your
stamp collections, antique, comic book,

inventory from your business.

So this was pretty bad.

The Hans don't have stamp collections,
but they do have a little savings.

And before March 2007, Duncan and Monte
Castro's company is still coming through

with the monthly payments on their
refinance.

Their reliability convinces the Hans to
invest $10 ,000 more.

Them making those mortgage payments for
the first four months certainly lacked

credibility, which caused me and Clancy
to decide, well, let's invest a little

more of these short -term investments
with them.

The Webbers get the same pitch by mail.

Dear Deborah, if you have not already
heard, we have had extremely exciting

news. The Webbers take $35 ,000 out of
their 401ks and hand it over to the next

sure thing.

They were all pushing this big, hot
deal, you know, this is going to make a

of money for all of us, you know.

And unfortunately, we suckered for that
one, too.

They say a sucker is born every minute.

James Duncan seems to want to put the
theory to the test.

When American Greed returns, Pacific
Welt's never -ending pile of debt puts

end to Duncan's stage show. But the
Internet has an entirely new audience to

exploit. I've run teams that have
accumulated millions of dollars.

Not hundreds of thousands of dollars.

Millions of dollars. And I can teach you
how to do the same thing.

What other desperate pitches was Duncan
making?

Find out at CNBCprime .com slash
American Greed.

Want inside information from the show?

Join the Greed social network.

Like us on the American Greed Facebook
page.

We'll be right back.

By early 2007,

With loans drying up and payments to
clients coming due, James Duncan sees

the end of his specific wealth
management is near.

The number of investors who are coming
in can't possibly keep up with the debt

that is owed. And so, like all Ponzi
schemes, it's basically a house of

Eventually, it all collapses.

And so it did.

Mortgages stopped being paid.

Credit cards stopped being paid. And
they kind of rolled up their welcome mat

and shut their doors.

Once investors can no longer get in
touch with anyone at the company, they

people who will answer their calls.

The SEC and the Riverside District
Attorney's Office.

And it appears that the men in charge
are feeling the heat, literally.

They had Montecastro, Duncan, and McLeod
and other employees bring their

laptops and files to Montecastro's home,
and they had a burn party.

Where they started burning files and
burning hard drives, smashing and

hard drives.

You get rid of evidence.

But even out of these ashes, a new
scheme will arise.

Hey everybody, James the Cash King here.

Thanks so much for checking out my
website.

He had some videos online where he was
trying to convince people money's just

going to be rolling into you in FedEx
packages every day if you join my James

the Cash King.

He's a very charismatic guy. He's a very
enthusiastic guy. You want to believe

what he's saying. And he basically said,
you know, you can be independently

wealthy, you can work from home, you can
spend all day long with your kids and

still have hundreds of thousands of
dollars come in.

Let me tell you what I wasn't doing this
morning.

I wasn't rushing to get in my car so I
could get on the freeway stuck in

for an hour to then get to a job that I
didn't like and I didn't want to be at.

Let me tell you what I did at 7 a .m.
instead this morning.

I woke my two younger kids up. I made
them breakfast.

I packed their lunches. I checked their
backpacks, and then I walked them out

the back door to school.

After that, I had a leisurely breakfast.
I read the paper, and then I went

upstairs and took a nap for a couple of
hours. I was kind of tired.

Talking people out of their money is
exhausting work, and it's coming to an

In February 2008, the SEC has enough
information to file a complaint against

Duncan, Monte Castro, McLeod, and their
company, Pacific Wealth Management.

When the financial gurus come in to give
their testimonies, SEC attorney Sarah

Kalin is surprised at what she sees.

During Mr.

Monte Castro's testimony, he wore dim
shorts and...

flip -flops and a t -shirt and mr duncan
was dressed similarly it was hard to

believe that they were holding
themselves out as investment

and you know financial geniuses perhaps
duncan and monte castro should take

things a bit more seriously on july 6
2009

A federal court in the Central District
of California grants a summary judgment

in favor of the SEC against Duncan's
Pacific Wealth Management and its

operators.

Duncan is ordered to pay more than $30
million of disgorgement, Marty Castro

just over $28 million, and Maurice
McLeod, the figurehead president, just

half a million.

Four months later, the Riverside
District Attorney's Office has a plan to

execute simultaneous arrest warrants on
criminal charges against seven of the

collaborators.

The three principals and four of their
associates for selling securities

a license.

Cindy Kelly, Thuan Du, Charlie Choi, and
Helen Pedrino.

But the arrests don't go as planned.

When American Greed returns.

We were hoping to get everybody at once,
and it worked well on six of them.

The seventh one was on the run.

Early morning, November 19th, 2009.

With assistance from the FBI.

the U .S. Postal Inspection Service, and
local law enforcement, the Riverside

District Attorney's Office, led by
investigators Brent Westwood and Craig

Johnson, are on their way to arrest
James Duncan and six of his associates

$125 million fraud.

You go out early in the morning, say 7,
8 o 'clock in the morning,

get set up there, knock on the door.

Generally, people are just getting up.
They don't usually start thinking about

running right then or fighting, and you
can take them into custody without

incident.

We were hoping to arrest them all in one
day, and we certainly had a plan to do

that, and I believe we got everybody in
custody that morning except Helen

Padrino. It appears Padrino catches word
of some of the morning arrests, and

instead of returning to work at the
hospital, she makes a run for it.

Eventually... We tracked her down
through using an ATM machine, and it

she was up by LAX, Los Angeles
International Airport.

We had some concern that she was going
to try to leave the country.

Fortunately, Investigator Johnson is
able to bring her in before it's too

I called Helen. Her husband answered.

Bob told Bob that there was a $29
million warrant to arrest Helen and that

would be safer and better for her just
to turn herself in, and she...

agreed to do that. They parked at a gas
station, went to a Burger King, and we

had a local agency up in the Los Angeles
area arrested her and booked her into

jail for it.

Five of the defendants take plea deals.

Kelly and Twandu receive probation.

Choi gets four months jail time.

But Monte Castro and his mother, Helen
Pedrino, fight the charges.

They were very contentious with their
appointed attorneys. So eventually they

fired all their appointed attorneys and
represented themselves in trial, which

was a treat.

All of Monte Castro's and Pedrino's
experience with the law is how to break

not argue it in court.

And their inexperience is on full
display from day one.

I think the jurors got a little bit...

frustrated with them. There were times
that the jurors would laugh out loud at

some of their objections or some of
their questions and things like that.

The first witness to face the circus of
the Monte Castro Padrino legal team is

Deborah Weber.

Hendricks and Helen were allowed to
cross -examine me.

Kind of like being cross -examined by
Dumb and Dumber.

A trial that the prosecutor expects to
last six weeks.

stretches to more than four months.

It was very long, very long. A lot of
repetitive questions that I was asked.

I'll say it took a lot of patience to
listen to them question me.

They would go minutes without asking me
a question, just looking at stuff I

wasn't sure what they were trying to get
at.

The highlight of the trial comes when
Duncan, who has agreed to cooperate with

the prosecution, comes face -to -face
with his old partner in crime.

Duncan was on the stand for eight days,
and 90 % of that was on cross

-examination with Hendricks.

Hendricks kept attacking him and saying,
isn't it true that you thought of this?

And Duncan would say, Hendricks, you and
I sat down together and came up with

that. Remember, in your office, in your
home, we came up with that.

The mother -son team's defense is that
they were just patsies in Duncan's

scheme. Monte Castro tried to say he
didn't know it was a scam. He was a

as well.

Yet he's standing side by side with
James Duncan in these seminars, making

representations that are lies, just
complete fabrications. And his mother is

the seminars with him, standing up,
giving the testimonies and repeating the

lies.

After more than two months of trial,
Padrino can see the writing on the wall

tries to evade justice yet again.

didn't come to court. And the
information we got from her son,

that she was ill. She was home ill.

And so, you know, when you're a criminal
defendant in trial, you don't just get

a call in sick.

No local hospitals will confirm
Pedrino's illness, but deception runs

her and her son, and they have a plan.

The judge received a letter from someone
purporting to be a nurse practitioner.

Well, it turns out this nurse
practitioner was Hendricks' wife, who

in Maryland.

And we knew that she was his wife. But I
guess maybe he didn't know we knew

that. Monte Castro's wife is brought in
to testify under oath that Padrino is

too ill to come to court.

But the judge finds her testimony
unreliable and rules that Padrino needs

return to the courtroom.

Monte Castro's wife leaves the stand in
a fit.

She was very hostile, very hostile. My
investigator said she...

Gave me the finger as he left the
courtroom, but I didn't see that.

The judge and jury aren't pleased by all
the antics.

Monte Castro is found guilty of 304
charges against him and is sentenced to

years and 8 months in prison.

Pedrino is guilty of 54 counts and gets
7 years.

After the district attorney's office
determined that Duncan cooperated fully,

is sentenced to 19 years and eight
months, and all defendants combined are

ordered to pay just over $6 million in
restitution.

For victims of the fraud like Clancy and
Dale Hawn, they have to come to terms

with a new life.

I feel like the little girl who is just
happy all the time until something

happens, and then it's like, ooh, life
is mean.

That's mean.

The Horns invested $71 ,000 of equity
and another $10 ,000 of their savings in

the scheme.

But the heaviest burden on them now is
the huge mortgage payment they have to

make thanks to the refinance Duncan's
company executed.

The prudent decision, they believe,
would be to walk away.

But it isn't that easy.

My heart is in this house.

No, I definitely don't want to leave.

It would be devastating to leave this
house.

I mean, would we?

You know, maybe.

Maybe.

The Webbers had no choice.

They simply couldn't afford to make the
new payments that they were expecting

Duncan's company to cover and had to
walk away from the house.

We were going to retire in that home.

We had everything we wanted. It wasn't
anything big. It wasn't lavish in a

moderate neighborhood.

Nothing fancy.

But it was the house we wanted to retire
in.

And it's gone.

Between the equity, the credit card
advances, and other investments, the

turned over more than $230 ,000 to the
fraud.

And all they have to show for it is a
package of nearly worthless Iraqi

Looks good, but it's worth practically
nothing.

Every once in a while, the Webers
receive a restitution check in the mail.

It's an almost laughable pittance.

But attitude is everything when dealing
with a criminal like James Duncan.

This is my big check.

Our big check.

$15 .54.

I don't care. I seriously don't care how
small they are. I want him to see my

name on his bankroll. He has to pay me.

I don't care if it's 99 cents.

So, yes, my $15 .54 check, love it. Love
it.

Next Thursday, he would steal money from
anyone. He commits the crime, serves

his time, but he wanted as much money as
he could get his hands on. Greedy

enough to be episode 100 of American
Greed. Next Thursday, 10 Eastern on

The fastest growing cable network in
primetime.

CNBC.