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In this episode of American Greed,
DePaul Wanakawati enjoys a life of
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thanks to his medical glove importing
empire.
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Now he wants to go bigger, hiring
American workers.
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175 jobs.
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It was like almost the answer to our
prayers.
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But his enterprise is built on false
promises and propped up by an
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$230 million of other people's money.
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He was a skilled manipulator and a
gifted con man, and he would use
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rip anything from the headlines to kind
of add to his story. And nothing will
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stop his compulsion for cash.
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Not an FBI raid, not even a jail cell.
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The man was still a financial danger
when he was locked up in jail.
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But when everything looks so real, could
the biggest lie he's telling be the one
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he tells himself?
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If some of the truth came out just as
the bad thing that I did, I might have
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a better chance.
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I think he believed his own BS and
somehow felt this was all going to have
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happy ending.
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you have a prepaid call from DePaul
Wanakawati, an inmate at Sacramento
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Jail. Hi, Mom.
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Hi, DePaul. I'm doing fine.
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I got the 20 years, but I only have to
serve 10.
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On the day of his sentencing for one of
the biggest cons Sacramento has ever
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seen, DePaul Wanakawati cannot stop
lying.
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Not even to his elderly mother.
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The fact is, he'll be locked up for a
minimum of 17 years.
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I got only 10 years, okay?
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At the end of the day, that's better
than nothing.
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I kept telling you, even though it says
20 years, I only go for 10 years.
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How many times do you want me to tell
you that?
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Earlier this afternoon, he faced a
courtroom of victims.
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Their tales of heartache and struggle
are now being widely reported.
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I did what I had to do.
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I did what I had to do.
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Monica Waddy comes to the U .S. in the
late 1960s in a tale that begins more
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American dream than American greed.
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And his story was he grew up poor in Sri
Lanka, dirt floors,
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and through tennis was able to overcome
his impoverished
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childhood, get a scholarship to an
American college.
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He comes to the U .S. as a junior tennis
champion from Sri Lanka, playing on the
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team at Georgia Southern University.
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After college, he takes a trip west and
falls in love with Sacramento,
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California.
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When he initially came to Sacramento, he
was working as a pro, a tennis pro. But
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on the side, he had a business, and that
was actually selling latex gloves,
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rubber gloves, to various tattoo shops,
dentists. And, yeah, he did that out of
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the back of his car.
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In 1988, Wanakawati and his American
wife Betsy found International
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Manufacturing Group, a medical supply
company.
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IMG imports medical gloves from
Malaysia.
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and sometimes goes by the brand name
Rely Aid.
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Dr. James Oates is a retired dentist who
lives in Paso Robles, California.
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He builds his practice over many years
in suburban Sacramento.
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Dr. Oates meets DePaul Wanakawati in the
late 1990s when he begins purchasing
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supplies from him.
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He was an exhibitor at the California
Dental Association's scientific
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and seeing him in that venue gave
credibility to his product
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line. But Wanakawati claims his biggest
moneymaker isn't retail customers like
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Oates. It's government deals.
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The most lucrative, he says, is his
contract with the U .S. Department of
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Veterans Affairs.
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He indicated to investors that because
of his unique position of being a
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minority -type business, he had access
to government contracts upwards to
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$150 million per year.
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However, Wanakawati has a cash flow
problem.
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He says the factories in Asia need a
guarantee of payment, but the VA won't
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him until he delivers.
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In essence...
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He needs collateral for his orders.
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So Wanakawati turns to friends and
clients to help him import shipping
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containers of gloves from Malaysia.
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Although they often consider themselves
investors, they are actually private
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lenders.
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DePaul's explanation as to why he needed
my money versus a bank was that the
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bank interest rates on very short -term
high money, loans was
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prohibited. Mr. Wanakawati represented
to investors that he earned 30 to 40
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percent profit on his government
contracts.
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From that, he told investors that they
could receive a share of those profits
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anywhere from 10 to upwards and more
than 20 percent.
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Wanakawati encourages his lenders to
roll their investments.
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When rolling, investors like Oates still
receive their interest payments, but
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leave their principal with him to help
finance the next shipping container from
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Malaysia. Over the years, Dr. Oates
rolls several of his loans and says he
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Wanakawati nearly $1 million.
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Oates says his interest payments come
like clockwork and says sometimes
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Wanakawati even pays him back big chunks
of principal early.
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occasionally DePaul would say, I don't
need that glove investment, so I'll
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you a check. So it added a degree of
confidence when he would write me a
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to repay my investment.
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Wanakawati keeps an open -door policy
with his private lenders.
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There were numerous investors who we
spoke to who actually went down to his
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business and wanted to see, feel, and
touch the facility.
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I could talk to his secretary.
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I could see the warehouse full of
product.
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I was proud to be a part of it.
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What's more, many of Wanakawati's
lenders consider him a close personal
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He would give me tickets to the Kings
games in Sacramento, and we just had a
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really good, close relationship. Every
Christmas, we would exchange Christmas
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baskets. He was the kind of guy who
would remember if you're...
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If you had kids, you'd remember your
kids' names. You'd know what sports they
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played. He has this gigantic smile.
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He is a hugger. He wants to get to know
you and shake your hand as soon as you
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come into the room.
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And by the mid -2000s, Wanakawati has
reason to smile.
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He's got a hit product on his hands, the
Aloe Touch Fitted Glove. I feel less
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fatigue in my hands when I use them, and
my hands feel smoother. It's a great
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combination.
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Business seems so good that before long,
Wanakawati decides to take it to the
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next level.
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Eventually, he started telling
investors, we'll cut out the middleman.
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out the manufacturer. Let's bring
manufacturing to California.
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Let's put it here where we can control
it and make an even greater profit.
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Next on American Greed.
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Wanakawati brings hope to a town on hard
times with a pitch of creating 175
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new jobs.
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It was like almost the answer to our
prayer that he, you know, was talking
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that he would use local people.
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We all wake up and this nightmare will
be just a total dream.
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But unfortunately, it's not.
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It's gonna be a reality until it gets
done, you know?
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But you gotta keep your hope alive. If
you don't keep hope alive, then
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gonna happen, you know?
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Forty miles north of Sacramento,
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DePaul Wanakawati purchases a shuttered
garage door factory in Yuba County.
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It's located in the small town of
Olivehurst, home to about 14 ,000
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including Mary Jane Griego.
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Griego owns the local gathering spot,
Duke's Diner.
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She's lived here since childhood and
says that back then, Olivehurst had a
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thriving economy.
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We had everything here. You know, we
had, you know, the canneries. It was all
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based around ag and natural resources.
We had the trailer factories. We had the
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lumber mills.
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That started to vanish around the 70s.
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Then two major floods devastate the town
in the 80s and 90s.
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And since that time, Olivehurst has
struggled to recover.
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In our mall, we have the mall here in
the South County.
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57 very prosperous businesses.
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Not one of them came back. They all
left.
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Those opportunities that were there left
with them.
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Griego, who also works as a Yuba County
supervisor, meets with Wanakawati and
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other county officials in early 2012.
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He shares his plans to turn the old
facility into a booming new medical
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factory. It was like almost the answer
to our prayers, you know, when we look
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the amount of unemployment that we have
in this community, that he, you know,
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was talking about the number of people
that would be working and that he would
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use local people.
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That kind of gets you going, you know,
you think, oh my goodness, finally.
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He tells Yuba County the plant will cost
$30 million and bring 175 new
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jobs.
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He asks county leaders to keep the
project quiet at first.
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But when word gets out in Olivehurst,
the locals' hopes soar.
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People were really needing jobs.
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So they come into the restaurant and
they say, you know, my brother needs a
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or my husband needs a job or my son
needs a job. Can you put in a good word
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me? It was exciting to say, yeah, I
would put a good word in for you.
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Wanakawati looks for funding from
commercial lenders.
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He gets a $4 .5 million line of credit
from San Jose -based Bridge Bank and
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nearly $7 million from Key Equipment
Finance.
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Wanakawati also turns once again to
private lenders, people like Ron Ashley,
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has done well as a cosmetic dentist.
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He had products. He gave me a few
samples.
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Real stuff.
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You know, as a dentist, I bought lots of
latex gloves, but had begun to buy
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nitrile.
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And that's when he started telling me
about this other venture that was his
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love of life, was that he wanted to
create the first nitrile glove factory
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the United States.
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Ashley understands having a passion
project.
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He owns apartments across the West,
having invested his dental income into
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estate. where he makes his fortune.
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For 20 years, from 88 to 08, I did both
the apartment business and also
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dentistry. My wife and I started with
one complex, and now we've grown it to
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where we're about 4 ,000 units.
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As a dentist with a latex allergy
himself,
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Ashley is intrigued by the project.
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Wanakawati invites him to Olivehurst.
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I went to the factory with him. He had
plans, kind of like a flow chart of how
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it was going to be built and what the
machinery looked like and how it would
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work. It was very impressive.
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There had been a lot of recent
electrical work done with a lot of heavy
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power cables and conduits and all that
kind of stuff that was obviously fresh
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and new.
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Ashley decides to lend Wanakawati money
to purchase and ship the assembly line
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equipment. He had all the things down
pat that you need to convince somebody
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that you're for real. He had a real
business location, some real business
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records, real contract with the VA.
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Before long, Ashley decides to become a
partner.
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I had sold some apartments, and when I
made a decision to invest some
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money in the glove factory,
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It was a very serious investment. When I
started initially, I bought 10%, and I
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finally made my way up to 50%. The
Ashleys make a series of investments and
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loans totaling $22 million, even
borrowing some of it to help Wanakawati.
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over six months, a fast friendship
forms.
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He's extremely friendly and acts very
sincere.
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We play tennis together. We vacation as
he and his wife vacation with me and my
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wife.
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By 2013, DePaul Wanakawati appears as
successful as ever.
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He lives in a comfortable middle -class
home, owns numerous properties around
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Sacramento, and has donated at least $25
,000 to his daughter's private Catholic
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high school.
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He owns a private jet and three vacation
homes, including this $3 million house
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in Hawaii.
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And he also owns his city's professional
tennis team, Sacramento Capitals.
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I think there was a personal connection
to the tennis team, but it's also part
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of the way he would bring people around.
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Another thing he would do... I think, to
earn trust and demonstrate credibility
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to the individual investors.
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If you would take him to Hawaii for an
all expenses paid trip for a week to his
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house in Hawaii, he would fly them out
there on his private jet. And people
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start to believe that, yeah, this guy is
who he claims to be.
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But cracks are beginning to show in his
warm, confident facade.
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Next on American Greed, late payments
and a lawsuit.
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lead to a federal investigation.
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They were peppering me with questions,
sucking information out of me. It was
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pretty intense.
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And this morning when I came down to get
breakfast, one guy said, can I call you
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Mr. Mogul?
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Mr. Mogul.
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Can I call you Mr. Mogul?
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He said you're constantly on the news.
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Constantly on the news.
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Sacramento
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attorney
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Ian Craig represents two of DePaul
Wanakawati's largest lenders.
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They are prominent home builders who,
over several years, lend their friend
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than $20 million each.
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As their attorney, Craig encourages his
clients to formalize their agreements
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00:17:29,740 --> 00:17:30,800
with Wanakawati.
229
00:17:32,140 --> 00:17:37,039
When I would put documents in front of
Mr. Wanakawati, the reluctance to sign
230
00:17:37,040 --> 00:17:38,840
those agreements caused me concern.
231
00:17:39,120 --> 00:17:44,399
My clients come from a different
generation, a generation in which a man
232
00:17:44,400 --> 00:17:45,450
good as his word.
233
00:17:45,770 --> 00:17:47,550
They were less concerned than I was.
234
00:17:48,290 --> 00:17:53,470
If they felt comfortable with him, and,
you know, I couldn't stand in their way.
235
00:17:54,430 --> 00:17:58,530
In early 2013 comes the moment Craig
fears.
236
00:17:59,190 --> 00:18:04,070
Wanakwadi is several months late in
making interest payments to his clients.
237
00:18:04,590 --> 00:18:08,050
We started writing letters to Mr.
Wanakwadi.
238
00:18:08,700 --> 00:18:09,750
And Mr.
239
00:18:10,020 --> 00:18:14,399
Wanakwadi then would, instead of dealing
with me, he would go directly to my
240
00:18:14,400 --> 00:18:18,799
clients and give them, for instance, a
letter from the VA saying, hey, my
241
00:18:18,800 --> 00:18:20,320
payment terms have changed.
242
00:18:20,680 --> 00:18:27,020
Well, I used to get paid by the VA in 30
to 60 days. Now it's 90 to 120 days.
243
00:18:28,180 --> 00:18:30,920
Wanakwadi's excuse placates the clients.
244
00:18:31,280 --> 00:18:34,120
But Ian Craig is still suspicious.
245
00:18:35,300 --> 00:18:37,420
Then in the summer of 2013,
246
00:18:38,330 --> 00:18:43,490
Bridge Bank sends one of his clients a
subpoena to testify in a deposition.
247
00:18:44,010 --> 00:18:49,549
Bridge Bank is suing DePaul Wanakawati,
accusing him of defaulting on his $4 .5
248
00:18:49,550 --> 00:18:52,870
million line of credit. It doesn't make
sense to Craig.
249
00:18:53,190 --> 00:18:57,749
If Wanakawati has a contract with the
Department of Veterans Affairs worth
250
00:18:57,750 --> 00:19:02,530
than $100 million, he should be able to
pay back $4 .5 million.
251
00:19:04,790 --> 00:19:07,270
Alarmed, he meets with a private
investigator.
252
00:19:08,010 --> 00:19:12,290
an ex -FBI agent who says he'll reach
out to the Bureau.
253
00:19:13,090 --> 00:19:15,630
The next day, Ian Craig gets a call.
254
00:19:16,530 --> 00:19:22,729
Don't tell your clients. Don't tell
anyone. We just need you to show up. We
255
00:19:22,730 --> 00:19:27,949
you to bring the documents that you have
that are relevant to this, and we're
256
00:19:27,950 --> 00:19:29,750
going to sit down and talk about this.
257
00:19:31,180 --> 00:19:36,599
The following day, he sits down with FBI
Special Agent Paul Artley and IRS
258
00:19:36,600 --> 00:19:39,760
Criminal Investigation Special Agent
Stephen Delaney.
259
00:19:40,600 --> 00:19:46,379
They were peppering me with questions,
sucking information out of me. And I was
260
00:19:46,380 --> 00:19:48,670
in that office for probably five or six
hours.
261
00:19:49,060 --> 00:19:51,360
And it was pretty intense.
262
00:19:55,140 --> 00:19:59,459
Agents Artley and Delaney begin by
contacting the Department of Veterans
263
00:19:59,460 --> 00:20:00,510
Affairs.
264
00:20:01,350 --> 00:20:05,169
We have two individuals that haven't
been paid millions of dollars in
265
00:20:05,170 --> 00:20:06,670
over the last couple of months.
266
00:20:06,970 --> 00:20:12,469
That's all we know at that point. He's
shown them a VA contract for hundreds of
267
00:20:12,470 --> 00:20:13,520
millions of dollars.
268
00:20:14,110 --> 00:20:18,589
Well, we have to then try to figure out
with the VA if that contract actually
269
00:20:18,590 --> 00:20:22,350
exists. And if it does exist, does it
exist for $125 million?
270
00:20:22,770 --> 00:20:25,870
The feds learned he has a contract, all
right.
271
00:20:26,410 --> 00:20:31,649
They reviewed it and then told me that,
in fact, it was a $25 ,000 per year
272
00:20:31,650 --> 00:20:37,989
contract. $25 ,000 a year is just 0 .02
% of the
273
00:20:37,990 --> 00:20:41,210
$125 million he has shown his lenders.
274
00:20:42,990 --> 00:20:48,510
And remember Wanakawati's excuse that
the VA changed its payment terms?
275
00:20:49,650 --> 00:20:52,960
Investigators discovered that
Wanakawati's letter from the VA...
276
00:20:53,370 --> 00:20:55,690
is signed by a former employee.
277
00:20:56,370 --> 00:21:01,389
In fact, that individual had worked for
the VA, but had worked there five years
278
00:21:01,390 --> 00:21:06,249
earlier. So in effect, it was a
fraudulent letter that he was providing
279
00:21:06,250 --> 00:21:07,300
investors.
280
00:21:07,390 --> 00:21:11,730
And the deceit involving Veterans
Affairs doesn't stop there.
281
00:21:13,070 --> 00:21:19,010
Back in 2011, to secure his $4 .5
million line of credit from Bridge Bank,
282
00:21:19,470 --> 00:21:21,910
Wanakawati sets up a conference call.
283
00:21:22,380 --> 00:21:24,060
with his contact at the VA.
284
00:21:24,980 --> 00:21:29,780
At the time, the voice on the line says
Wanakawati is a valued vendor.
285
00:21:30,460 --> 00:21:32,720
Bridge Bank approves the financing.
286
00:21:34,340 --> 00:21:40,979
But in 2013, when the agents run the
rep's name by the VA, they've never
287
00:21:40,980 --> 00:21:42,030
of him.
288
00:21:42,060 --> 00:21:44,740
Is anything this man says true?
289
00:21:46,360 --> 00:21:49,640
Investigators strongly suspect
Wanakawati is running a scam.
290
00:21:50,350 --> 00:21:52,150
likely a pyramid scheme.
291
00:21:52,990 --> 00:21:55,410
They know he's been lying to his
lenders.
292
00:21:55,890 --> 00:21:58,330
Now they need it on the record.
293
00:21:59,990 --> 00:22:02,590
Next on American Greed, setting a trap.
294
00:22:02,890 --> 00:22:07,269
I never could have imagined in a million
years that I'd be working for the feds
295
00:22:07,270 --> 00:22:09,650
as a confidential informant.
296
00:22:22,920 --> 00:22:28,519
pushing it. He says there's a lot of
stuff that these guys are not talking
297
00:22:28,520 --> 00:22:31,600
about. They're just hung up on this VA
contract.
298
00:22:31,880 --> 00:22:36,039
He said, Paul, you have other businesses
going on. It's crazy. He says, I don't
299
00:22:36,040 --> 00:22:37,090
get this.
300
00:22:41,420 --> 00:22:44,220
Sacramento, California, autumn 2013.
301
00:22:48,140 --> 00:22:53,560
FBI and IRS agents have been digging
deep into DePaul Wanakawati's business,
302
00:22:53,940 --> 00:22:57,780
International Manufacturing Group, or
IMG.
303
00:22:59,460 --> 00:23:04,999
Although he does import medical gloves
from overseas, the feds suspect it has
304
00:23:05,000 --> 00:23:08,960
largely become a charade to convince
lenders to keep coughing up cash.
305
00:23:10,040 --> 00:23:16,259
Then he pays them back, using other
lenders' money. A classic, if well
306
00:23:16,260 --> 00:23:17,340
-disguised, con.
307
00:23:17,980 --> 00:23:22,599
He was able to mask the underlying
scheme through a legitimate business
308
00:23:22,600 --> 00:23:27,200
enterprise. They need to catch
Wanakawati in his own web of lies.
309
00:23:27,780 --> 00:23:33,399
So they asked Ian Craig, the attorney
for two of his largest investors, to
310
00:23:33,400 --> 00:23:34,319
a wire.
311
00:23:34,320 --> 00:23:39,360
I felt that he had committed fraud on my
client.
312
00:23:39,600 --> 00:23:46,579
I did not like this person, but I had to
pretend and fake a relationship
313
00:23:46,580 --> 00:23:47,579
with him.
314
00:23:47,580 --> 00:23:50,780
Essentially, I had the con, the con man.
315
00:23:51,260 --> 00:23:55,839
Craig convinces Wanakawati to put him in
touch with his contact at the
316
00:23:55,840 --> 00:23:57,460
Department of Veterans Affairs.
317
00:23:58,140 --> 00:23:59,660
I said, hi, Mr. Williams.
318
00:24:00,120 --> 00:24:01,320
What's your first name?
319
00:24:02,100 --> 00:24:03,460
Um, Fran.
320
00:24:04,320 --> 00:24:07,500
Okay, Fran Williams. Where are you
calling from?
321
00:24:08,440 --> 00:24:10,940
Um, Langley, Virginia.
322
00:24:11,700 --> 00:24:15,010
I thought to myself, I don't think
Langley, Virginia is where the...
323
00:24:15,150 --> 00:24:17,130
I thought that was the CIA headquarters.
324
00:24:17,390 --> 00:24:21,569
And I started asking him some fairly
pointed questions. How much is the
325
00:24:21,570 --> 00:24:24,350
contract? He recites $100 to $150
million.
326
00:24:25,450 --> 00:24:27,430
What's going on with the payment terms?
327
00:24:28,970 --> 00:24:33,090
We've just been delayed a little bit,
whatever his excuse was.
328
00:24:33,310 --> 00:24:37,189
When I started pressing him for a little
bit more, all of a sudden, he had to
329
00:24:37,190 --> 00:24:38,240
get off the phone.
330
00:24:38,510 --> 00:24:43,550
And some of those key things that we
needed were representations made by Mr.
331
00:24:43,670 --> 00:24:47,310
Wanakowati in a conversation so that we
could have that evidence.
332
00:24:47,530 --> 00:24:49,130
He did a fabulous job.
333
00:24:51,090 --> 00:24:56,629
As the criminal investigation heats up,
Wanakowati's pro tennis team, the
334
00:24:56,630 --> 00:25:00,590
Sacramento Capitals, announces a move to
Las Vegas.
335
00:25:02,150 --> 00:25:07,250
The FBI and IRS need to nail Wanakowati
before he skips town, too.
336
00:25:07,900 --> 00:25:10,850
but they'll need more evidence before
they can arrest him.
337
00:25:15,220 --> 00:25:21,999
On February 12, 2014, at 6 a .m., with
cert warrants in hand, they
338
00:25:22,000 --> 00:25:26,640
strike, raiding his home, business, and
the Olivehurst facility.
339
00:25:28,560 --> 00:25:34,719
At the IMG warehouse in West Sacramento,
an employee admits to playing the so
340
00:25:34,720 --> 00:25:39,000
-called... VA rep on the bogus
conference call with Bridge Bank.
341
00:25:40,440 --> 00:25:45,799
He confesses that Wanakawati had bribed
him with a hundred bucks and a bottle of
342
00:25:45,800 --> 00:25:46,850
wine.
343
00:25:47,140 --> 00:25:53,379
He verified that, yeah, DePaul had
handed him a script that morning, and
344
00:25:53,380 --> 00:25:54,840
both got on a conference call.
345
00:25:55,140 --> 00:25:58,480
Because I was a new employee, I just
wanted to make my boss happy.
346
00:25:58,680 --> 00:26:02,900
He had no clue what he was involved
with, and when the agents described...
347
00:26:05,020 --> 00:26:09,799
What they were investigating, the guy
just went white. I mean, just almost,
348
00:26:09,800 --> 00:26:10,920
know, he was stunned.
349
00:26:12,760 --> 00:26:16,860
Agent Delaney also corners Wanakawati's
chief financial officer.
350
00:26:17,140 --> 00:26:21,180
He wants to see the books on the
supposed VA contract.
351
00:26:21,820 --> 00:26:27,119
She tells him she knows nothing about
the VA business because Wanakawati alone
352
00:26:27,120 --> 00:26:28,800
manages that division.
353
00:26:29,640 --> 00:26:33,800
He keeps its books and money separate
from the rest of the company.
354
00:26:34,430 --> 00:26:39,270
She never sees an invoice and doesn't
even know where its bank account is
355
00:26:39,950 --> 00:26:44,889
She accounts for the VA business each
month by simply writing down whatever
356
00:26:44,890 --> 00:26:46,970
numbers Wanakowati tells her to.
357
00:26:47,430 --> 00:26:51,730
And then she adds that to the overall
company income statement.
358
00:26:51,731 --> 00:26:55,309
The way it's handled, you won't have any
paperwork. There's no expenses
359
00:26:55,310 --> 00:26:59,210
associated with it. I give you the
entries every month. You post them.
360
00:26:59,830 --> 00:27:01,150
She asks no questions.
361
00:27:02,060 --> 00:27:07,479
But she has been keeping track of those
manual income entries, which she turns
362
00:27:07,480 --> 00:27:09,020
over to the IRS agent.
363
00:27:09,400 --> 00:27:16,019
I think we could go back to around 2002.
You start to see the financial
364
00:27:16,020 --> 00:27:18,800
statements being adjusted upward.
365
00:27:19,340 --> 00:27:22,360
By the time we finish 2013,
366
00:27:23,120 --> 00:27:27,480
he's up in the $150 to $175 million in
sales.
367
00:27:29,360 --> 00:27:35,139
Over in Wanakawati's South Sacramento
home, FBI Special Agent Paul Artley and
368
00:27:35,140 --> 00:27:38,840
his team find a treasure trove of
fraudulent documents.
369
00:27:40,040 --> 00:27:45,219
Mr. Wanakawati did the old -fashioned
cut -and -paste job. So we found
370
00:27:45,220 --> 00:27:49,359
statements that were cut -and -pasted.
We found invoices. We found all manner
371
00:27:49,360 --> 00:27:53,640
documents. I don't think that Paul
Wanakawati ever used a computer.
372
00:27:54,760 --> 00:28:00,239
Okay, and here he is running one of the
largest Ponzi schemes we've ever seen in
373
00:28:00,240 --> 00:28:05,639
the Eastern District of California, and
he's using a photocopy machine and a
374
00:28:05,640 --> 00:28:10,079
pair of scissors to cut and paste
documents and put them together, and
375
00:28:10,080 --> 00:28:16,159
working. You get a call from Paul, and
he's saying, we found a lot, because
376
00:28:16,160 --> 00:28:19,159
tracking with everything that we're
seeing from our victims, from their
377
00:28:19,160 --> 00:28:23,539
statements, and I'm almost thinking it
can't be, it doesn't get any better than
378
00:28:23,540 --> 00:28:24,590
this.
379
00:28:24,780 --> 00:28:30,519
Meanwhile, the Olivehurst manufacturing
facility astounds for the opposite
380
00:28:30,520 --> 00:28:31,570
reason.
381
00:28:31,880 --> 00:28:35,070
The only thing inside the whole factory
was an eyewash machine.
382
00:28:35,140 --> 00:28:37,320
That was it. It was empty other than
that.
383
00:28:37,660 --> 00:28:42,499
Mr. Wanakwadi told others that he had
actually purchased some equipment in
384
00:28:42,500 --> 00:28:47,619
to put into the factory and provided
invoices and other documents
385
00:28:47,620 --> 00:28:51,460
that. But in fact, he didn't purchase
any equipment.
386
00:28:53,980 --> 00:28:55,380
The factory was a shell.
387
00:28:57,600 --> 00:28:59,360
Next on American Greed.
388
00:28:59,361 --> 00:29:03,259
From inside a Sacramento County jail,
he's on the phone talking with people
389
00:29:03,260 --> 00:29:05,760
attempting to salvage the deal.
390
00:29:06,100 --> 00:29:10,040
And his brazen behavior continues inside
the courtroom.
391
00:29:10,600 --> 00:29:15,040
And he starts reading this letter and
people's jaws are dropping.
392
00:29:15,780 --> 00:29:21,740
Hear more about becoming an FBI
informant at AmericanGreed .CNBC .com.
393
00:29:23,440 --> 00:29:24,490
Feeling greedy?
394
00:29:24,600 --> 00:29:28,620
Want inside information about the show?
Join the Greed social network.
395
00:29:28,980 --> 00:29:31,400
Like us on American Greed's Facebook
page.
396
00:29:31,840 --> 00:29:32,890
We'll be right back.
397
00:29:39,440 --> 00:29:41,200
Why are you prolonging this?
398
00:29:41,940 --> 00:29:43,060
It's so painful.
399
00:29:43,400 --> 00:29:44,540
I just want it to be over.
400
00:29:44,760 --> 00:29:50,839
I understand that. But if I can get a
reduced time, don't you think that's the
401
00:29:50,840 --> 00:29:51,890
best?
402
00:29:52,750 --> 00:29:55,700
He's going for a longer time. He's not
going to help anybody.
403
00:29:57,150 --> 00:30:02,029
In Sacramento, the feds are moving as
fast as they can through the evidence
404
00:30:02,030 --> 00:30:05,390
they've seized from DePaul Wanakawati's
home and business.
405
00:30:06,170 --> 00:30:09,610
They are horrified as the victim list
grows.
406
00:30:10,150 --> 00:30:15,349
I thought maybe it was two, three, four,
five, a handful of investors that had
407
00:30:15,350 --> 00:30:16,430
been taken by this guy.
408
00:30:16,431 --> 00:30:20,389
But it turns out once we got records,
once we started looking through the
409
00:30:20,390 --> 00:30:26,289
document that were at his house, we
could see that it was going to be much,
410
00:30:26,290 --> 00:30:27,340
larger.
411
00:30:28,250 --> 00:30:34,009
In fact, the very same day of the raid,
Wanakawati meets his investor Ron Ashley
412
00:30:34,010 --> 00:30:40,049
for lunch to discuss what he says are
delays at customs with the shipment of
413
00:30:40,050 --> 00:30:42,710
assembly lines for the Olivehurst glove
factory.
414
00:30:43,170 --> 00:30:45,730
He said, Ron, I just need one final
payment.
415
00:30:46,110 --> 00:30:47,160
And then that's it.
416
00:30:47,250 --> 00:30:52,670
And so that payment was, it's a matter
of public record, it was $680 ,000.
417
00:30:53,050 --> 00:30:55,910
And he said, that'll be the last we
need.
418
00:30:58,010 --> 00:31:03,469
The FBI had been to his house, and yet
he was capable of being reasonably
419
00:31:03,470 --> 00:31:06,829
friendly and straight -faced and smiling
and saying, thank you, you've really
420
00:31:06,830 --> 00:31:09,060
helped me accomplish something
important.
421
00:31:09,710 --> 00:31:13,630
Ashley believes he owns a 50 % stake in
the Olivehurst operation.
422
00:31:14,430 --> 00:31:18,430
In exchange for investing in lending
Wanakawati the $22 million.
423
00:31:19,750 --> 00:31:22,310
It's amazing what you learn after it's
too late.
424
00:31:27,490 --> 00:31:30,990
The glove grifter shows no signs of
stopping.
425
00:31:31,370 --> 00:31:35,570
So within a week, agents Artley and
Delaney take him down.
426
00:31:36,070 --> 00:31:42,429
When we actually arrested Mr.
Wanakawati, he was very friendly, very
427
00:31:42,430 --> 00:31:45,560
cordial. as if you had known him for
years.
428
00:31:46,180 --> 00:31:52,140
And within that, I saw how he was able
to manipulate people.
429
00:31:55,060 --> 00:31:57,920
Word of Wanakawati's arrest travels
fast.
430
00:31:58,300 --> 00:32:05,079
And within days, the dream of 175 new
jobs in Oliver's appears to be
431
00:32:05,080 --> 00:32:10,519
dying. It's the momentum that we were,
you know, involved in that
432
00:32:10,520 --> 00:32:12,940
felt so credible.
433
00:32:14,060 --> 00:32:18,239
That, you know, and then to have that
yanked out from underneath you, it just
434
00:32:18,240 --> 00:32:20,840
makes you very cautious.
435
00:32:21,200 --> 00:32:27,079
Having to explain to the community that
this guy was not legitimate, that was a
436
00:32:27,080 --> 00:32:28,130
tough one.
437
00:32:28,500 --> 00:32:33,839
Although he's been jailed on charges of
conspiracy, as well as mail wire and
438
00:32:33,840 --> 00:32:38,000
bank fraud, DePaul Wanakawati isn't
giving up.
439
00:32:38,800 --> 00:32:43,760
Even from behind bars, he obsesses over
capturing more cash.
440
00:32:44,320 --> 00:32:49,019
He was on a recorded line out of the
Sacramento County Jail attempting to
441
00:32:49,020 --> 00:32:53,420
salvage a deal with a state -run Chinese
corporation.
442
00:32:54,720 --> 00:32:59,859
Months before, they had kind of
finalized the deal, signed paperwork,
443
00:32:59,860 --> 00:33:04,920
Chinese corporation was going to give
Wanakawati roughly $40 million.
444
00:33:04,921 --> 00:33:09,999
Our estimation was that money would have
immediately gone out to pay various
445
00:33:10,000 --> 00:33:12,110
investors that were now asking for
money.
446
00:33:13,160 --> 00:33:16,720
The man was still a financial danger
when he was locked up in jail.
447
00:33:19,260 --> 00:33:21,060
In March 2014,
448
00:33:21,780 --> 00:33:26,779
DePaul Wanakawati is indicted on charges
of bank fraud and making false
449
00:33:26,780 --> 00:33:28,760
statements to a financial institution.
450
00:33:29,720 --> 00:33:31,420
He pleads not guilty.
451
00:33:32,480 --> 00:33:37,059
But after learning all the evidence the
government has on him, He changes his
452
00:33:37,060 --> 00:33:38,600
mind and cuts a deal.
453
00:33:39,240 --> 00:33:42,520
He pleads guilty to one count of wire
fraud.
454
00:33:45,240 --> 00:33:50,599
Wanakwadi's sentencing is August 7,
2014, at the federal courthouse in
455
00:33:50,600 --> 00:33:51,650
Sacramento.
456
00:33:52,060 --> 00:33:54,300
It was essentially standing room only.
457
00:33:54,301 --> 00:33:58,619
There were a number of victims, and they
made up the bulk of the people in the
458
00:33:58,620 --> 00:33:59,670
courtroom.
459
00:33:59,800 --> 00:34:03,320
Wanakwadi stands up in his orange
jumpsuit from the county jail.
460
00:34:04,840 --> 00:34:07,200
Juana Kawade interrupts the proceedings.
461
00:34:07,640 --> 00:34:11,859
The judge announces, well, we have a
letter here, and he starts reading this
462
00:34:11,860 --> 00:34:14,699
letter, and people's jaws are dropping.
463
00:34:15,400 --> 00:34:21,259
Now, Juana Kawade wants to fire his
attorney. He writes, I believe he has
464
00:34:21,260 --> 00:34:24,340
intimidated me into agreeing to the plea
agreement.
465
00:34:25,940 --> 00:34:31,198
Never in 20 years have I ever seen that.
It was one last chance for him to kind
466
00:34:31,199 --> 00:34:32,459
of control the situation.
467
00:34:33,040 --> 00:34:36,230
So I can imagine that was incredibly
difficult for the victims.
468
00:34:36,620 --> 00:34:41,000
The judge apologizes as he postpones the
sentencing.
469
00:34:41,239 --> 00:34:45,619
These investors, they had come to just
get their pound of flesh, to at least
470
00:34:45,620 --> 00:34:50,360
justice done, to see him sent away for
20 years.
471
00:34:51,199 --> 00:34:54,300
And the whole thing got stopped in its
tracks.
472
00:34:55,739 --> 00:34:57,340
Next on American Greed.
473
00:34:58,130 --> 00:35:03,349
Even when he should be down for the
count, Wanakawati has a few more jabs to
474
00:35:03,350 --> 00:35:08,410
throw. Who cares what they write in the
paper, man? They write good at the time.
475
00:35:19,010 --> 00:35:23,310
If some of the truth came out, I might
have had a better chance, you know?
476
00:35:23,690 --> 00:35:25,610
But, you know, the truth never came out.
477
00:35:26,960 --> 00:35:28,900
You know, only the bad things came out.
478
00:35:29,460 --> 00:35:30,800
All the bad things I did.
479
00:35:35,700 --> 00:35:37,060
November 2014.
480
00:35:39,300 --> 00:35:43,900
Three months have passed, and DePaul
Wanakawade's guilty plea stands.
481
00:35:44,920 --> 00:35:48,720
He must now face his victims and his
punishment.
482
00:35:49,620 --> 00:35:51,460
God bless him. They showed up again.
483
00:35:52,560 --> 00:35:55,990
There was not an empty seat in the
courtroom that second time either.
484
00:35:56,090 --> 00:36:02,289
Ron Ashley, the Glove Factory investor
who lost nearly $22 million, addresses
485
00:36:02,290 --> 00:36:03,340
the court.
486
00:36:03,550 --> 00:36:07,869
And I looked at him and he would not
look at me. He had his face cradled in
487
00:36:07,870 --> 00:36:13,289
hands. So I said, DePaul, you are a
sociopath, a person who can rationalize
488
00:36:13,290 --> 00:36:15,330
constant greedy and deceitful behavior.
489
00:36:15,810 --> 00:36:19,360
You have disgraced yourself and
disgraced your family in the process.
490
00:36:19,850 --> 00:36:22,670
You are a liar, a serial liar.
491
00:36:22,930 --> 00:36:25,570
DePaul, you are the most evil person I
have ever met.
492
00:36:26,030 --> 00:36:27,590
You are truly a scumbag.
493
00:36:28,750 --> 00:36:31,330
His new attorney reads an apology.
494
00:36:31,910 --> 00:36:38,570
And then Judge Troy Nunley sentences
DePaul Wanakawati to 20 years in prison,
495
00:36:38,690 --> 00:36:42,550
of which he must serve a minimum of 17.
496
00:36:42,950 --> 00:36:45,850
It was very quiet, very quiet.
497
00:36:46,830 --> 00:36:49,150
And they let him away.
498
00:36:57,130 --> 00:37:00,790
After the tone, please say your first
and last name.
499
00:37:01,730 --> 00:37:03,950
DePaul Wanakawati. DePaul Wanakawati.
500
00:37:04,690 --> 00:37:09,709
He calls his daughter afterward and
spins a tale that he can make the
501
00:37:09,710 --> 00:37:11,330
magically disappear.
502
00:37:12,210 --> 00:37:13,260
Hi, honey.
503
00:37:14,150 --> 00:37:16,310
Hello. I got it all completed.
504
00:37:17,450 --> 00:37:20,070
Sounds good. I got my 20 -year sentence.
505
00:37:20,690 --> 00:37:24,629
They can't take it away. I'll tell you
all the details on Saturday when I see
506
00:37:24,630 --> 00:37:25,680
you, okay?
507
00:37:25,840 --> 00:37:30,840
He also lies to his wife, though she is
not so easily fooled.
508
00:37:32,000 --> 00:37:33,050
Hi, honey.
509
00:37:34,220 --> 00:37:35,620
Well, it went good.
510
00:37:35,880 --> 00:37:39,640
I survived it. I survived it. I'm sure,
I'm sure.
511
00:37:40,280 --> 00:37:44,420
With the 20 -year term I got, I only
have to spend 10 years.
512
00:37:45,120 --> 00:37:50,620
And the spin continues as he calls his
elderly mother.
513
00:37:51,220 --> 00:37:54,380
Who cares what they write in the paper,
man? They write books.
514
00:38:05,640 --> 00:38:12,619
I think to some degree he believed, we
all know what the word BS means, but
515
00:38:12,620 --> 00:38:18,259
I think he believed his own BS and
somehow felt this was all going to have
516
00:38:18,260 --> 00:38:19,310
happy ending.
517
00:38:26,640 --> 00:38:28,460
In January 2016,
518
00:38:29,300 --> 00:38:33,100
DePaul Wanakawati sends a letter to
American Greed.
519
00:38:33,380 --> 00:38:38,260
He points a finger at an investor, one
of Ian Craig's clients.
520
00:38:38,840 --> 00:38:44,599
He writes, I was a highly paid servant
for a rich man whose housing business
521
00:38:44,600 --> 00:38:46,060
crashed in 2008.
522
00:38:47,100 --> 00:38:52,999
He continues, American Greed should
focus on who ended up with all the money
523
00:38:53,000 --> 00:38:55,400
from the investors and the real facts.
524
00:38:55,401 --> 00:38:59,499
And nowhere, of course, either in the
plea agreement or in that apology, did
525
00:38:59,500 --> 00:39:04,199
try to blame anybody else. And it's now
in retrospect. But it doesn't surprise
526
00:39:04,200 --> 00:39:09,559
me that he would try to blame somebody
else because he is a sociopath, because
527
00:39:09,560 --> 00:39:14,179
he is evil, and because he probably just
can't handle the accountability of it
528
00:39:14,180 --> 00:39:18,659
all. Our evidence from the investigation
indicated that Mr. Wanakawati did this
529
00:39:18,660 --> 00:39:19,710
all himself.
530
00:39:19,960 --> 00:39:23,980
There were no other individuals involved
who participated with him.
531
00:39:24,700 --> 00:39:27,620
assisted him or knew of his scheme.
532
00:39:28,140 --> 00:39:32,100
Perhaps the weight of his wickedness is
too much to bear.
533
00:39:32,640 --> 00:39:38,939
Over 12 years, he takes in more than
$230 million from more than 150
534
00:39:38,940 --> 00:39:39,990
and lenders.
535
00:39:40,520 --> 00:39:44,600
Losses stand in excess of $100 million.
536
00:39:47,100 --> 00:39:53,760
Losing $380 ,000 to DePaul is certainly
a shock.
537
00:39:54,170 --> 00:39:58,589
You know, I do have cash assets that are
in good, solid investments, so, you
538
00:39:58,590 --> 00:40:05,409
know, I'm lucky that way. I don't live
an extravagant lifestyle, and so what I
539
00:40:05,410 --> 00:40:07,350
have left has got to last.
540
00:40:08,230 --> 00:40:10,930
The damage extends far beyond the
scheme.
541
00:40:12,010 --> 00:40:15,750
His pro tennis team is terminated by its
league.
542
00:40:16,150 --> 00:40:18,440
They never played a single match in Las
Vegas.
543
00:40:21,090 --> 00:40:22,650
And in Yuba County...
544
00:40:23,050 --> 00:40:28,070
Olive Hurst grieves the loss of those
175 manufacturing jobs.
545
00:40:29,070 --> 00:40:35,969
DePaul was such a big disappointment,
but I think the idea
546
00:40:35,970 --> 00:40:41,129
that he had was really good. I just
think that, you know, he was there for a
547
00:40:41,130 --> 00:40:45,389
different reason, but I think that maybe
one day we'll have that manufacturing
548
00:40:45,390 --> 00:40:50,429
here, and we'll be wise. I mean, we're
always optimistically, maybe a little
549
00:40:50,430 --> 00:40:54,900
bit... We're cautiously optimistic now,
but we are still optimistic.
550
00:40:55,420 --> 00:40:56,680
Very good. All right.
551
00:40:57,420 --> 00:41:01,239
It's hard to tell with Juana Kawade. Did
he ever really intend to build this
552
00:41:01,240 --> 00:41:05,479
factory or didn't he? You just don't
know with him. He was a skilled
553
00:41:05,480 --> 00:41:10,259
and a gifted con man, and he would use
anything, rip anything from the
554
00:41:10,260 --> 00:41:15,939
to kind of add to his story. Every story
that he told had a kernel of truth in
555
00:41:15,940 --> 00:41:18,650
there. You know, yes, he did have a
contract with the VA.
556
00:41:19,080 --> 00:41:23,000
It was for $25 ,000, not $120 million.
557
00:41:23,600 --> 00:41:29,820
And there was a facility that he had in
Olivehurst, but it wasn't functional,
558
00:41:29,980 --> 00:41:31,540
and there was no equipment in it.
559
00:41:32,000 --> 00:41:34,560
I don't really care what anybody says,
Mom.
560
00:41:35,160 --> 00:41:39,899
No, no. I don't care, okay? I don't care
what anybody thinks. I don't really
561
00:41:39,900 --> 00:41:42,440
care, okay? I don't want to hear it,
okay?
562
00:41:42,660 --> 00:41:43,710
It doesn't matter.
563
00:41:47,630 --> 00:41:53,989
Of the $22 million he entrusts to
Wanakawati, Ron Ashley gets only $300
564
00:41:53,990 --> 00:41:55,490
,000 back.
565
00:41:56,330 --> 00:42:00,809
The money that I lost, my wife and I, we
made that money. We started out as poor
566
00:42:00,810 --> 00:42:02,790
people, too. Blue collar, definitely.
567
00:42:02,791 --> 00:42:06,929
I've been pretty successful in life, but
I've worked really hard for it. My wife
568
00:42:06,930 --> 00:42:09,280
has been by my side. We've worked hard
together.
569
00:42:09,530 --> 00:42:14,590
And it's a great sense of loss.
570
00:42:15,400 --> 00:42:18,400
Some people might really kill themselves
in despair.
571
00:42:18,800 --> 00:42:22,440
And some people might drink themselves
to death in despair.
572
00:42:23,260 --> 00:42:27,920
Or you pick yourself up, dust yourself
off, and just keep going.
573
00:42:28,160 --> 00:42:29,420
And that's what I've done.
574
00:42:30,320 --> 00:42:33,600
The most powerful thing any city has is
its people.
575
00:42:33,820 --> 00:42:35,080
Together, we'll rebuild.
576
00:42:35,280 --> 00:42:36,600
Together, we'll reinvent.
577
00:42:36,800 --> 00:42:38,120
Together, we'll hustle.
578
00:42:38,460 --> 00:42:40,380
From executive producer LeBron James.
579
00:42:40,660 --> 00:42:44,080
Cleveland Hustles. Series premiere
Wednesday at 10. PNBC.
580
00:42:44,081 --> 00:42:45,319
Get yours.
581
00:42:45,320 --> 00:42:47,700
I'm 100 % in charge. The Prophet.
582
00:42:47,701 --> 00:42:49,529
Season premiere Tuesday at 10.
583
00:42:49,530 --> 00:42:54,080
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