Original subtitles

Stephen Wilson, her winner. You either work for your money or your money works

for you.

Investors even mortgage their homes to join his fund.

He would encourage them to, as he said, unlock the dead equity in their homes.

But investing with Wilson comes at a very high price.

It absolutely killed my grandmother.

She was crying about this when her heart burst and she died.

But first.

Larry Salander is one of the biggest names in New York's art world.

He was a big deal. People would look at him and say, that's a really successful

dealer. But collectors see red when he swipes more than $100 million from their

pockets. It's the biggest art world scam that I've ever encountered.

Families lose a fortune in priceless art.

I think that only a despicable person with evil in their heart could do

something like that.

110, 120, 130 ,000. The world of fine art is a multi -billion dollar industry

where a single painting can fetch more than 100 million dollars.

New York is the capital of the art world.

And here, in a luxurious townhouse on East 71st Street, Larry Salander runs

of the most prestigious galleries in town.

This gallery was huge.

It was palatial.

Very large rooms, lots of marble, very impressive, very expensive.

You see him in the auction rooms bidding.

He seemed to have money. He was a first -class art dealer.

Salander's clients range from hedge fund billionaires to entertainment industry

A -listers, including Robert De Niro, Bruce Springsteen, and John McEnroe.

But in October 2007, amidst a flurry of lawsuits, the gallery doors are locked.

Several investors and clients claim Salander is selling their paintings

their knowledge and pocketing tens of millions of dollars.

To put it very simply, I think he was a liar, a cheat, and a crook.

The son of an antiques dealer, Larry Salander grows up in a middle -class

community on Long Island.

Yeah, Larry came from humble beginnings where he took care of his mom and

sisters. His father died pretty young. He didn't finish college, and this was

the show of Larry's work. Salander is an artist in his own right.

As Ron Gersten, a family friend and former employee, explains.

He was a painter, and that's what he cared about.

This self -portrait was one he gave me that I've had for probably 20 years.

After working in his family's antique business and other small galleries, he

-found the Salander O 'Reilly Gallery on the Upper East Side in 1976.

The business plan is simple.

Discover the next Picasso while he's still unknown, promote his work, and

them both rich.

He didn't sleep at night. He ate, drank, and breathed art.

When he wasn't in the gallery selling art, he was in his office reading about

art and writing about art.

He talked at the speed of a machine gun, and it was very entertaining to be

around him in that sense.

A lot of collectors are men and successful men. A lot of them are, you

know, like stories, guy stories, and I think Salander was very good at that.

He specializes in the American modernists, painters like Stuart Davis

Ralston Crawford.

Robert De Niro Sr., the father of the famous actor, is another favorite.

His passion for their work is obvious.

He would argue and explode and get loud and make his points strong about the art

he believed in.

Salander's instinct is usually right.

By 1989, the successful gallery expands to a mansion on East 79th Street.

But even though he's a big -time art dealer, Salander plays the role of a

regular guy from Long Island.

He was very gruff -speaking and contrary to almost any profile you might

think of in terms of what an art dealer would look like, sound like, dress like,

and act like.

When he was in the nice digs, the Wall Street people were able to look past his

eccentricity and trust this guy's success while I listened to him.

The other people didn't mind the eccentricities. He was an artist like

were.

Over the years, he developed close bonds with numerous art collectors, including

Dr. Alexander Perlman, a New York physician.

I remember one time we walked in, he said, Hey, Doc, how are you? Larry would

call him Doc. Hi, Doc.

And it was very familiar, you know, with Larry.

would treat him like a dad, and my father treated him like a son.

Dr. Ellen Shander is Pearlman's daughter.

As a child, her father instills a deep love of art in her and her sisters.

When we were little, the artwork in our house were our best friends.

My dad would talk about them. He would introduce the colors to the artists.

Dr. Pearlman boasts an impressive collection, including pieces by Monet,

Cezanne, Picasso.

His house in Queens is like a museum.

He was very concerned that he had a substantial collection in our house, and

was a middle -class neighborhood, and he was worried. So when anybody came in

and they asked about the paintings, we would always say, my dad paints.

So the word in the neighborhood was, your dad's a good painter.

As Dr. Perlman approaches his 90th birthday, Dr.

Shander and her siblings talk to him about his collection.

which is worth about $2 million.

And I think I pressed my dad with, you know, you have a sizable collection.

What would you like to do with it? And it was at that point that he said he

wanted Larry to take physical possession of it so that we could have it safe.

Dr. Perlman writes Larry Salander into his will, which states that upon Dr.

Perlman's death, Salander will hold the art collection until the family can

decide what to sell.

This was a man he could trust. He said nothing bad could happen, that the art

was going to be in safekeeping, and that we shouldn't worry at all.

In 2004, Dr. Perlman dies from pancreatic cancer at the age of 91.

Larry Salander is by the family's side at the funeral.

He cried. He said, you know, your dad was like a father to me, and I'm really

sad, and I'll do everything I can to help out Doc's kids.

Larry meets the family at Dr. Perlman's apartment and immediately gets to work.

He proceeded to catalog every painting. He created them that day.

He gave us a certificate of insurance, and he left with every painting and

artwork that day.

Next on American Greed, is Larry Salander really a family friend or a

con man?

I started to get my voice louder and insisting that I did want to see my

paintings. Where were they? And they got a security guard, a very big guy, and

I'm a little person, and they basically threw me out.

Larry Salander is thriving in the New York art world.

After arriving on the scene in 1976, he establishes one of the premier galleries

on the Upper East Side.

He's passionate about art, and he exudes warmth with his clients.

He was always outgoing, happy to see us, very affable.

Before he dies in 2004,

Dr. Ellen Shander's father, Dr. Alexander Perlman, entrusts his $2

collection to Larry Salander for safekeeping for his heirs.

When I came to visit the artwork at his gallery right after my dad died, he was

very nice, very considerate, very calm, very interactive.

You know, I care about you.

Around this time, Larry Salander begins a big expansion of his business.

So far, Salander has focused on scouting lesser -known artists.

Now, he wants to step into the arena of the old masters.

Old masters, kind of like a kitchen sink category for things that could be over

200 years old.

French, German, Spanish, Italian.

Salander's new business model requires new space.

He moves into an opulent neoclassical mansion on East 71st Street.

One of these beautiful 19th century buildings with a big staircase,

beautiful room, beautifully appointed.

You walked in and you thought, oh my God, this place is a palace.

The rent, an astonishing $150 ,000 a month.

You've got to sell a lot of art to make that kind of rent roll.

Salander spares no expense in his personal life either.

In 2004, he buys a six -story Manhattan townhouse for just under $5 million.

He has another 66 -acre home in upstate New York, complete with its own tennis

court and baseball field for the kids.

He took a private jet to go to his son's baseball game one day, which was about

a 20 -minute away affair.

But moving toward old masters is a highly questionable business decision.

It requires an enormous bankroll, frequent flights to Europe, and it's

hard to find overlooked or undervalued property.

You can't pull rabbits out of half. You can't discover, you know, an unrecorded

Caravaggio painting.

Most people thought he had really lost the screw in his head.

This dubious business decision, combined with his massive overhead, means

Salander is burning through cash.

And people started buzzing about how could Larry afford it, what was really

going on. But he had the ability to put a show on that was impressive and

convincing. Larry was very convincing.

Salander makes much of his money selling other collectors' art on consignment.

There would be an agreement for how long.

You have one month, two months, six months.

This is the price.

And, you know, at the end of this period, if this is not sold, you simply

the work back to me.

The piece over the fireplace is Milton Avery. Art collector Maurice Katz has

known Salander for 25 years.

The art world is based upon faith and your faith in what the dealer tells you

the truth. And sometimes, as it turns out in this case, what the dealer says

wasn't the truth.

In May of 2006, Katz sends a painting by Alfred Maurer to the Salander O 'Reilly

Gallery. He wants $125 ,000 for the painting.

Anything over that amount goes to Salander.

But Katz hears nothing about the painting for nearly a year.

Turns out, the painting had already been sold.

I found it out from another dealer in New York. I said, I know where your

painting is. It's sitting in the living room of X in New York, who acquired it

from Salander.

Katz is shocked.

Salander hasn't said anything about a sale, and he certainly hasn't seen a

check.

I immediately called him. I emailed him. I sent him a certified letter saying, I

understand you've sold the painting, and I want to check for $125 ,000 by, I

gave him like five days.

But Salander is elusive.

A week later, he finally responds.

Oh, I did sell the painting, and yes, I've sold it on an installment basis,

the first payment is due within 30 days. It was like $12 ,000. I said, that's

totally unacceptable.

After Katz threatens to sue the gallery and report him to the authorities,

Salander agrees to pay him the $125 ,000 in two installments of $62 ,500.

The check finally arrived maybe a week later, so I took it over to the bank

immediately, and of course it was NSF, non -sufficient funds.

Fed up and frustrated, he contacts the Maine Antique Digest, an art industry

publication, to share his story.

A reporter tells him he isn't the only one having problems with Salander, as

dozens of other collectors are suing the dealer for missing artwork and money.

Stories appear in several publications as the lawsuits multiply.

He was cheating a lot of other people. I mean, I had no idea of the extent of

the fraud that he was engaged in.

Salander is furious, thinking the bad press could wreck his business.

He fires off a threatening email to Katz.

And I was taking food out of his mouth and his poor little children's mouths,

and he was going to sue me for libel and slander for millions of dollars because

I had called him a crook.

Dr. Ellen Shander hears the stories as well and worries about her father's

collection.

So I called him on the phone. I said, Larry, what's going on here? This is

disturbing. He said, oh, no, it's just a misunderstanding.

And I said, you know, I want to come in and I want to see my artwork.

He said, no problem.

She heads down to the gallery but is given a rude welcome at the front desk.

They said he was upstairs and he wouldn't come down.

He was on a very important phone call, and I knew that there was really big

trouble here. But my idea in my head was that my paintings were somewhere in the

gallery, and that I would find them. I never, ever thought that they were gone.

Up next on American Greed, his empire is crumbling, but the Salanders aren't

going down without a fight.

His son tried to punch out one of the cameramen. It was pretty strange.

In the summer of 2007, Larry Salander appears to be a successful Manhattan art

dealer.

Salander travels around the world by private jet, owns multimillion -dollar

homes, and runs a spectacular gallery chock -full of priceless art.

I don't think anyone ever questioned, like, you know, gee, I wonder if that

pays his bills on time. You don't think about that when you're standing in a $40

million mansion on the Upper East Side.

But by fall, longtime clients are starting to see through the masterful

Salander has created. When lawsuits claiming he owes money hit the press.

I started hearing everybody talking in New York about, yeah, yeah, we know

Larry Salander.

Salander is running two schemes.

In some cases, he's selling paintings and conveniently forgetting to send the

proceeds to the consignors, artists, and their estates.

Victims include Robert De Niro, who believes 12 of his father's paintings

been stolen.

He was simply stealing paintings from estates or people that weren't keeping

track of what was really in the gallery.

Salander's also selling shares of paintings, but the numbers don't add up.

one notorious case, he sells shares equivalent to 350 % of the painting's

This scam is exactly what happens to former tennis pro John McEnroe, a

owner himself, and longtime friend of Salinger.

There's something kind of evil about it in terms of, you know, you have someone

in your confidence and then you fleece them.

And it's not just one. You know, it's not like Robin Hood or something.

He was really ripping everybody off.

By October of 2007, Salander is facing nearly 50 suits, claiming he owes $100

million.

Lawsuits were just literally like coming into the courts, being filed every day.

Amid all this turmoil, Salander plans his largest exhibit yet, featuring

Caravaggio's Apollo the Lute Player that he claims is worth $100 million.

He was finally putting together the show that would culminate his entire great

career. It would be the greatest show ever done by a commercial gallery, and

that he would be able to retire and pay everybody he ever owed a dime to back.

Art journalist Jud Tully interviews Salander before the big exhibit.

It was one of the most bizarre interviews I've ever done.

The dealer appears to be under tremendous pressure as the art world

his financial troubles.

One of the employees had brought a fancy silver tray with this bottle of scotch

and glasses and put it down on the table in front of us. And I'm going, now this

is not cocktail hour.

You know, and Larry is like taking a big slug.

It's a conspiracy.

I'm being attacked.

You know, this is chump change compared to the millions of dollars I've made for

every one of these ungrateful people.

After this strange interview, Salander prepares for his big comeback exhibit,

but it's not meant to be.

On the day of the opening, a judge orders the gallery closed and the doors

padlocked to prevent any more paintings from being sold.

Larry Salander is locked out of his own gallery.

The event sends shockwaves through the art world, and his story is making

headlines. His son tried to punch out one of the cameramen that were showing

marshals coming and closing the doors, and his son just completely flipped out.

A few weeks later, Salander declares bankruptcy.

Salander's friend and former employee, Ron Gersten, blames the clients for not

giving Salander enough time to pay them back.

He had over 25 -year relationships with many of these people that made the

claims against him, which made me wonder, who's greedy here?

The day he was in a tight bind and needed them to give him a little leeway,

of a sudden they ran and jumped on this bandwagon against him.

Clients are anxious to see what's left in the gallery. They fear the worst.

Forensic people started going into the gallery, looking at all his records, and

each person who had given him artwork on commission was allowed to come in and

look through the record.

Dr. Ellen Shander discovers that at least 30 of her father's paintings have

sold off, including the major Impressionist works.

The entire collection is estimated at over $2 million.

We had no idea that he had sold them years before.

We had no idea the paintings weren't even there.

In Dr.

Shander's case, some of her father's stolen paintings have simply vanished.

Apparently, Salander sold many paintings with just a handshake.

No one knows who owns them now.

You can't even find where they went. They just literally disappeared from the

gallery. Other stolen paintings have a paper trail.

But even if they can be located, it can be difficult to get the new owner to

relinquish the painting.

If it was stolen, then you found out that some CEO in, you know, Walnut

California owns your painting. I mean, good luck getting it back because he's

just going to call his lawyer.

The Manhattan district attorney indicts Salander on 100 counts, including grand

larceny and fraud.

And he's arrested in March 2009.

Prosecutors say Salander swindles 30 victims out of $120 million.

Primarily to finance his pursuit of the old masters and to maintain his

extravagant lifestyle.

It's the biggest art world scam that I've ever encountered.

Though Salander is known as a rough and tumble businessman, he apparently

doesn't have the stomach for a prolonged court battle.

In March 2010, Larry Salander pleads guilty to 29 counts of grand larceny and

one count of scheming to defraud.

Larry wanted to fight all the charges against him. He didn't have any money

lawyers.

He didn't want to drag his family through an ongoing process.

Later that summer, victims have a chance to address Salander at his sentencing

hearing.

When I gave my speech at the sentencing, I looked at him and I said, what kind

of a human being are you?

How could you do that?

And he never batted an eyelash.

Larry Salander is sentenced to 6 to 18 years in state prison.

As for the artwork left in the gallery, much of it remains tied up in bankruptcy

proceedings. Many victims believe they'll never see it again.

There was a credit committee that was created to pay off Salander's debt,

was substantial.

And they confiscated our art, and they said that should be used to pay off his

debt.

I understand that possibly I could buy it from Salander's gallery, which is

really disgusting.

For many, the betrayal by a supposed friend hurts more than the loss of

John McEnroe is the godfather of one of Salander's children.

He's never spoken about the case.

Dr. Ellen Shander's father was a friend of Salander for 25 years.

I feel so badly for my dad.

I really do.

That I can cry about.

My dad's relationship with him, his trust, his belief in him.

I guess I'm angry in the sense that I felt I've been personally violated

he took advantage of, you know, trust that we had put in him.

I think that only a despicable person with evil in their heart could do

something like that.

He's a con man of the umpteenth degree.

Up next on American Greed, Stephan Wilson is a youth pastor that makes a

career change, complete with a new name and a Lamborghini.

Stephan Wilson, to me, had kind of a dual personality in the early part of

career. He seemed to be doing good work, and then it seemed he turned to the

dark side.

Folsom, California, a small northern California town best known for its

made famous in the song Folsom Prison Blues by Johnny Cash.

Folsom is the hometown of another man in black, Stephan Wilson, a self -made

investment guru.

And so that's what a hedge fund vehicle allows you to do. It makes your money

work for you. Wilson is a late arriver to the world of high finance.

taking up a career in investing in his 40s. But Wilson seems to have a knack

his new trade.

He lived in a lavish home, drove luxury vehicles, seemed to be very successful.

But looks are deceiving.

The huge investment returns Wilson promises are nothing more than smoke and

mirrors. He never really made any money. It was more or less, was he down a lot

or was he down really a lot?

The story of Stephen Wilson begins in the mid -1980s, back when he is known by

his given name of Stephen Wilson.

He originally finds his calling in the Christian Evangelical Church.

He had been a youth minister at one point. He had traveled to several

and claimed to be doing some type of charity work.

In 1986, he found Shake the Nations, an international youth mission group.

Shake the Nations was a non -profit ministry that he was president of. They

would do summer revivals.

But Wilson is more interested in stealing identities than in saving

He had a small staff of people working for him, and he had gotten their Social

Security numbers and their other biographical data.

And he took employees' information and actually opened credit cards in their

name, where he was making payments and doing things for personal use.

In December 2002, Shake the Nations is shut down, and Wilson pleads no contest

to forgery and theft of access card information.

Following a 90 -day jail sentence, Wilson is back on the streets, but deep

credit card debt.

There was probably about $600 ,000 of debt associated to Shake the Nations.

After struggling financially for a few years, he declares bankruptcy in 2005.

Wilson decides to make a fresh start. He even legally changes his name from

Stephen K. Wilson to Stefan A. Wilson, allegedly to get back to his German

heritage. That's odd to me because he changed his name from Stephen Karl Heinz

Wilson, which sounds pretty German to me, to Stefan Andre Wilson.

which sounds a little more French to me.

The U .S. Attorney's Office says Wilson has an ulterior motive.

I think the real reason he changed his name was so that people would have

difficulty pulling up his criminal record and his prior bankruptcy, because

that's not good for business.

With a new name and a clean slate, Wilson is free to pursue another money

-making venture.

In 2005 and then into 2006, he started recruiting investors and pulling other

people's money to invest.

Wilson forms an investment fund, which he names the Christians in Crisis, or

Investment Fund.

He produced some glossy brochures that talked about his so -called hedge fund,

made it appear that he had a long history of investing.

There are many problems with the fund, starting with the name.

Christians in Christ is actually a legitimate nonprofit organization.

He essentially, in our opinion, hijacked the name to use for his investment

fund. Potential investors in the CIC fund are unaware of Wilson's past.

We were calling him Steve. He said his real name was Stephan, but he goes by

Steve as a nickname.

Real estate broker Tim Manke first hears about Wilson through a family friend.

During a visit to his office, Wilson pledges him annual returns of 17 to 22

percent.

As a seasoned investor,

Menke finds the promise suspicious, but still somehow attractive.

He asks Wilson for proof of his success.

Being a little cynical, I said, OK, well, you know, how much money do you

in the funds? I want to see it.

So he logged into one of his stock accounts, and in that account, I think

$5 .3 million at the time.

Mankey takes the plunge and invests $100 ,000 with Wilson.

People have the choice of getting your monthly payment every month or letting

sit away and compound and grow.

Mankey chooses to let it grow, or so he thinks.

Darlene Rickaby doesn't have that luxury.

Retired and living alone, she needs some extra income.

Well, I had had a stroke, and I was worried about my money not being enough,

lasting me the rest of my life.

Wilson eases her concern, telling her he can provide her with a monthly revenue

stream.

The pitch sounds appealing, and then Wilson seals the deal by stressing his

religious background.

He told me that he had been a preacher at one time, a Christian in Christ, that

all just fell into what I believed in, and it made me feel good, made me feel

like I could trust this man.

After Wilson promises her returns of 24 % a year, she withdraws $100 ,000

from her savings and invests in the fund.

Later I got some paperwork and it said 18%. And so I called and asked about

and he said, oh, if I told you 24, we'll stay with that.

It seems like Wilson just snaps his fingers and changes the rate of return.

Though it's a red flag, it's outweighed by the monthly checks she requests that

always arrive on time.

Every month I would take out between $2 ,000 and $4 ,000 and he would send me a

check for it.

In the Sacramento area, word is spreading.

Stephen Wilson can make you rich.

But it comes at a cost.

Next on American Greed.

It absolutely killed my grandmother.

There's no doubt in my mind. She was crying about this when her heart burst

she died.

Wilson, California.

Stefan Wilson is a former youth minister who decides investing is a more

lucrative career choice.

Wilson's investors in the Christians in Crisis, or CIC Fund, are supposedly

earning huge returns.

But he also appeals to their sense of altruism.

He indicated to some of the victim investors that a portion of their funds

go to charities.

Appearances play a role as well.

Wilson now lives in a new million -dollar home and counts a Lamborghini

Hummer among his many possessions.

People would see that he's doing really well. He has these nice things, so he

must be making way more than 24 % because I'm getting my cut and I see how

living. Until now, the CIC fund has used word of mouth to get new investors.

Now, Wilson's ready to take it to the next level.

He and his associates would rent a meeting room, send out invitations via

and would do presentations at these seminars.

He also takes to the airwaves. That's the first thing. Secondly, you either

for your money or your money works for you.

and he gave this pitch, same pitch that he probably gave at the presentations.

Any investment is a risk, and you have to consider what your risk tolerance is,

and then you have to look at what you're investing in. And if you feel confident

in the people managing your money, then you do pretty well.

Sharon Manke's son, Tim Manke, is a Wilson investor who has seen returns of

than 18 % a year, at least on paper.

February 2007, she attends a Wilson investment seminar.

He came across as being low -key, and so my first impression was, well, he's

like the numbers guy because he's kind of that quiet accountant -type person.

The fund's entry fee is steep, $100 ,000 minimum.

In the boom real estate years... Wilson has an idea to help cash -strapped

investors get their hands on that 100 grand.

He had a mortgage broker come and specifically discuss how the investors

take home equity loans on their property. He would encourage them to, as

said, unlock the dead equity in their homes.

Recently retired, Sharon has only $86 ,000 in her savings account.

But there's a place where she can unlock some dead equity.

Her elderly parents live on a 20 -acre ranch worth nearly $3 million.

She tells her parents about the CIC fund.

My dad had retired 25 years earlier, and so what he retired on really wasn't

sufficient. And then they were also hoping that I could retire and not work

anymore, stay retired.

Sharon and her parents meet Wilson at his home to discuss investing in the CIC

fund. Wilson tells them his fund is immune to market fluctuations.

He said, it's a hedge fund.

And my question was, what's a hedge fund? Well, there's a bill to hedge

it, so it doesn't matter whether stock goes up or stock goes down, that you

still make money.

Sharon's father, an 85 -year -old retiree, is skeptical of all this talk

hedge funds.

I remember my father saying to him, well, you know, I don't have $100 ,000

the bank. And he did tell my father, well, but you could go get a mortgage on

your property, which I believe is paid for.

Wilson convinces Sharon's parents to take out a $500 ,000 loan against the

ranch.

The property has been in the family for 58 years and has been paid off for

decades.

It was worth at that time about $2 .6, $2 .8 million.

Wilson promises them a 22 % annual return.

Sharon and her parents receive nearly $9 ,000 a month.

They were able to pay the mortgage that they took out on the property and, you

know, have a nice amount left over to help supplement their income. It made a

difference for them.

Darlene Rickaby, who first invested $100 ,000, is pleased with Wilson's returns.

She increases her investment to $250 ,000 and recommends the fund to her

Once I started getting paid every month, my daughter decided to go ahead and

invest some money in, and she put a fair amount in.

Next on American Greed, Wilson's wife, a former stripper, now in the lap of

luxury, asks, where's the money coming from?

and drops a dime.

For a long time, she probably believed that he was doing this magic, but I

she started to have her doubts.

In 20 years, Stephan Wilson has gone from youth minister to hedge fund owner.

Touting his supposedly religious background, Wilson persuades 80 people

invest with him.

Many borrow hundreds of thousands of dollars against their homes for the

privilege.

The people who were in the fund who were getting paid out every month, they got

their checks by clockwork, boom, every month they got their money.

The fund is great for Wilson, too.

He purchased a Lamborghini. He bought a $90 ,000 yacht.

He purchased a diamond ring.

He traveled. He traveled quite a bit.

But just when it seems nothing will break his amazing run of profits, in

an unlikely figure brings it all crashing down.

Remarkably, it isn't a wary investor who blows the whistle on what looks like a

Ponzi scheme.

His wife actually brought the case to our attention.

Wilson's wife.

who lives in the million -dollar home, drives the fancy cars, and wears the

diamond jewelry, isn't convinced of her husband's money -making acumen.

I think for a long time she probably believed that he was doing this magic,

I think she started to have her doubts.

And when her marriage turns sour, those doubts become stronger.

In July 2007, Wilson's wife brings CIC documents to the FBI.

And it became obvious pretty quickly that this was probably a Ponzi scheme.

The documents tell a tale of brazen fraud.

He kept purporting through the monthly statements that everything was okay,

in fact it was glaringly not okay. He continued the scheme by telling people,

lying to them, of his success rate.

Wilson's records also reveal staggering investment incompetence.

He brought in about $14 million.

He invested about $6 million of that and had breathtaking loss.

In a relatively short period of time, he managed to lose about 98 % of that

money.

While $6 million is dissipated in the stock market, another $6 million is

on his luxurious lifestyle.

Yeah, I guess, you know, I paid for the guy to have a Lamborghini, which, you

know. I never had one, but evidently he got one with my money, so.

Wilson's fraud is exposed, and so is he.

Far from being the squeaky clean church -going hedge fund manager, he's actually

a proven criminal with an ex -stripper for a wife.

No, and I wouldn't have invested with him if I'd known about his wife either.

But I didn't find out about her until it was too late.

But Wilson's wife is now the law's best friend.

As she tells the feds, he's been stockpiling cash and crafting an exit

He was exploring different ways to leave the country, various countries to go

to.

Places he could go that didn't have extradition, that's where we could go

him and get him. Places where he could go and, you know, find work.

Places where he could hide money.

Armed with this information, the feds haul him in.

In February 2008,

Stephan Wilson is arrested for running a fraudulent investment program.

The FBI says he steals $13 million from 80 victims.

In one fell swoop, his investors go from easy street to the poorhouse.

Totally, totally shocked. I just thought this can't be.

My heart stopped. I just was in shock. I literally fell down on the ground where

I was and was just totally shocked.

Aside from the monthly dividend checks some have already received, investor

money is almost all gone.

I kept thinking, surely they'll get into it and they'll find out that there's

some mistake somewhere.

That it'll all be cleared and we'll all get our money back.

For the Mankey family, three generations are devastated.

We had to immediately make a lot of changes in our life. We had to move.

We had to sell off some of our cars.

Tim's mom, Sharon, can no longer pay her bills.

My mom had nowhere to live, had no money and no job, so she ended up moving into

a room in our house for us, you know.

Tim's grandparents are hit the hardest.

They lose the $2 .6 million ranch that had been in the family for more than 58

years.

My mother just gasped, and my dad was, you could tell he was very

upset about it.

They were just devastated.

They pulled all that equity out, sank it into CIC, and lost it all.

And as a result, you have three generations who lost their homes,

family farm.

Remarkably, both Elliot and Laverne Clausen, who had been healthy their

lives, die suddenly within months of learning about the fraud.

In August 2008, Laverne Clausen dies of an aneurysm.

It absolutely killed my grandmother.

There's no doubt in my mind she was crying about this when her heart burst

she died.

Eight months later, her husband, Elliot, dies of a heart attack.

The family believes that this was stress -related, too.

They had been married 64 years, and for them to lose their home that they had

lived in for over 60 years was very devastating to them.

On March 17, 2009, Stephan Wilson pleads guilty to wire fraud and filing

false income tax returns.

A judge orders him to pay $12 million in restitution and sentences him to 19

years in federal prison.

I'm glad to see he didn't walk, but I think it should have been a longer term.

mean, he destroyed a lot of lives. I think he should have been in jail for

rest of his.

Wilson's victims now must rebuild their lives.

Not an easy task in what's supposed to be the golden years.

You know, it's survival.

What do I do that at 63 now I have no retirement?

I thought I would be retired and I could stay home and relax and play with my

granddaughters. I had their money in that. It was part of that money, too,

college money. I've lost that, too.

And I thought it would just be a nice retirement, and it's not. Now I have to

worry about trying to find work.

Instead of having the fancy lifestyle we always saved and put away and came back

to all that saving and put away, it was worthless. It's all gone just like that.

Next Wednesday on American Greed, a two -faced lawyer has pleasure on his mind.

Like that, he walks away with $20 million.

American Greed Wednesday starts 8 Eastern with an all -new episode at 10,

on CNBC.

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