1 00:00:04,550 --> 00:00:09,950 In this episode of American Greed, in Chicago, Charles Martin owns a lucrative 2 00:00:09,950 --> 00:00:13,470 currency brokerage, but lives like a Hollywood big shot. 3 00:00:13,770 --> 00:00:17,270 I think that was his goal in life, to become a superstar. 4 00:00:17,910 --> 00:00:21,750 It's a game of make -believe with a very high price tag. 5 00:00:22,030 --> 00:00:27,030 He dropped a million dollars on private jet travel, a 2006 Bentley, Ferrari, 6 00:00:27,390 --> 00:00:31,790 BMW, Land Rover, hundreds of thousands of dollars at a strip club. 7 00:00:32,320 --> 00:00:36,900 And when the credits roll, he and his partners stick their clients with the 8 00:00:36,900 --> 00:00:40,200 bill. What dawns on me is nobody's going to get a dime back ever. 9 00:00:40,740 --> 00:00:46,500 And later, Miami accountant Juan Carlos Rodriguez promises to make his friends 10 00:00:46,500 --> 00:00:50,100 rich. He was like a brother to my husband. 11 00:00:50,320 --> 00:00:54,920 I mean, truly, my husband considered him to be family. He offers them a 12 00:00:54,920 --> 00:00:57,340 guaranteed investment in blue chip stocks. 13 00:00:57,760 --> 00:00:59,900 But this is no way to treat a brother. 14 00:01:00,570 --> 00:01:03,250 It really was, in every way, a complete ripoff. 15 00:01:03,470 --> 00:01:08,750 Instead of delivering the big fat rate he promises, Rodriguez betrays those 16 00:01:08,750 --> 00:01:14,330 closest to him. This man who has been her friend for 20 plus years took her 17 00:01:14,330 --> 00:01:16,910 entire life savings and bolted with it. 18 00:01:31,440 --> 00:01:35,500 Winnetka, Illinois, one of Chicago's wealthiest suburbs. 19 00:01:36,080 --> 00:01:38,120 Most mornings here are quiet. 20 00:01:38,480 --> 00:01:43,360 But in the second floor offices of One World Capital Group, a foreign currency 21 00:01:43,360 --> 00:01:49,580 exchange, the atmosphere on June 15, 2007, is anything but calm. 22 00:01:50,500 --> 00:01:55,240 Investors have heard unsettling rumors, and they're flooding the company with 23 00:01:55,240 --> 00:01:57,120 requests to pull their money. 24 00:01:57,580 --> 00:02:01,280 Every five minutes, the fax machine would ring and spit out a new redemption 25 00:02:01,280 --> 00:02:05,120 request. People would call, and they would ask, you know, when's this going 26 00:02:05,120 --> 00:02:06,039 be processed? 27 00:02:06,040 --> 00:02:07,720 It's a crazy day. 28 00:02:08,419 --> 00:02:11,940 It is Jared Boyer's second week at One World. 29 00:02:12,860 --> 00:02:18,360 Today, the results of a routine audit have set off a panic, and the staff is 30 00:02:18,360 --> 00:02:24,280 anxious. People were just scared, 70 % of the business, all walking out the 31 00:02:24,280 --> 00:02:25,280 at once. 32 00:02:27,150 --> 00:02:28,150 Scary times. 33 00:02:28,410 --> 00:02:33,850 But when Boyer pays a visit to the firm's accountant, his worst fears are 34 00:02:33,850 --> 00:02:34,850 realized. 35 00:02:35,050 --> 00:02:38,110 I walk into her office and she looks really pale. 36 00:02:38,550 --> 00:02:42,230 And she says, I just don't have enough money to pay all these people. 37 00:02:42,830 --> 00:02:47,570 A forex dealer like One World should never have a problem repaying its 38 00:02:47,570 --> 00:02:48,570 customers. 39 00:02:48,970 --> 00:02:53,570 Accounts are held in trust until a customer authorizes a trade. 40 00:02:54,170 --> 00:02:58,310 A customer's money isn't supposed to be touched. It should always be there. This 41 00:02:58,310 --> 00:02:59,770 shouldn't be an issue at all. 42 00:03:00,390 --> 00:03:06,750 But client funds are missing, and One World is on the verge of a $16 million 43 00:03:06,750 --> 00:03:07,750 collapse. 44 00:03:08,290 --> 00:03:12,570 I'd been working there for two weeks at that point, and I started really to 45 00:03:12,570 --> 00:03:14,610 wonder what I'd gotten myself into. 46 00:03:16,110 --> 00:03:21,770 In 2005, One World Capital Group is just a dream of 40 -year -old Charles 47 00:03:21,770 --> 00:03:22,770 Martin. 48 00:03:23,020 --> 00:03:26,460 Martin works in Chicago's renowned futures trading industry. 49 00:03:26,900 --> 00:03:32,220 At the time, computers are taking over the jobs once held by humans on a 50 00:03:32,220 --> 00:03:33,220 floor. 51 00:03:33,500 --> 00:03:39,820 As positions become scarce, Martin decides to reinvent his career in the 52 00:03:39,840 --> 00:03:41,480 or foreign exchange market. 53 00:03:42,380 --> 00:03:48,960 Sue Herrera, financial journalist and co -anchor of CNBC's Power Lunch, knows 54 00:03:48,960 --> 00:03:50,260 this market well. 55 00:03:51,370 --> 00:03:55,330 The foreign exchange market is the biggest market in the world. It's bigger 56 00:03:55,330 --> 00:03:58,970 the stock market. It's bigger than what's called the futures market. 57 00:03:59,390 --> 00:04:02,770 It's also one of the most volatile markets in the world. 58 00:04:03,630 --> 00:04:06,570 And with great risk comes great reward. 59 00:04:06,990 --> 00:04:13,310 Each day, major banks and brokerage firms trade upwards of $3 trillion, 60 00:04:13,310 --> 00:04:16,550 it all on the rise and fall of currencies around the globe. 61 00:04:17,800 --> 00:04:23,240 With a brokerage of his own, Martin could take a small piece of this very 62 00:04:23,240 --> 00:04:29,180 pie. You want a piece of what's the most lucrative. And at times, the foreign 63 00:04:29,180 --> 00:04:31,060 exchange market is incredibly lucrative. 64 00:04:31,340 --> 00:04:38,240 But the National Futures Association, or NFA, requires $250 ,000 in capital 65 00:04:38,240 --> 00:04:40,740 to start a forex brokerage. 66 00:04:41,130 --> 00:04:46,070 So Martin approaches Jack Walsh, a co -worker 17 years his senior, about 67 00:04:46,070 --> 00:04:47,270 partnering up. 68 00:04:47,550 --> 00:04:49,630 The two couldn't be more different. 69 00:04:50,870 --> 00:04:57,610 Charles was the most overbearing, boisterous, 70 00:04:57,750 --> 00:05:00,910 just had to be the center of attention at all times. 71 00:05:01,270 --> 00:05:07,650 And Jack was a jeans and a collared shirt type of guy who enjoyed his scotch 72 00:05:07,650 --> 00:05:10,250 really just hung out in the back of the scenes. 73 00:05:11,020 --> 00:05:14,220 But the odd couple manages to put together the cash. 74 00:05:14,560 --> 00:05:21,260 And in 2005, Walsh, the quiet behind -the -scenes guy, officially registers 75 00:05:21,260 --> 00:05:23,600 World Capital Group with the NFA. 76 00:05:24,180 --> 00:05:29,080 Oddly, he leaves his boisterous partner Charles Martin's name out of the 77 00:05:29,080 --> 00:05:32,940 paperwork. They set up shop in the Chicago suburb of Winnetka. 78 00:05:33,300 --> 00:05:35,380 Now, they just need customers. 79 00:05:37,870 --> 00:05:41,550 Freedom Rocks would like to welcome you to the world of zero guesswork 80 00:05:41,550 --> 00:05:42,550 investing. 81 00:05:43,150 --> 00:05:48,470 Mark Ventilet is the founder of Freedom Rocks, a multi -level marketing company 82 00:05:48,470 --> 00:05:49,650 based in Las Vegas. 83 00:05:50,050 --> 00:05:56,630 In 2005, Freedom Rocks purports to educated subscribers about speculating 84 00:05:56,630 --> 00:06:02,870 Forex market. The idea is to make this complicated high -risk trading more 85 00:06:02,870 --> 00:06:05,050 accessible to retail investors. 86 00:06:06,090 --> 00:06:10,690 There were thousands of people all over the world, and we joined in together, 87 00:06:10,810 --> 00:06:16,090 and we went through some of the ups and downs in the markets, but we had a 88 00:06:16,090 --> 00:06:17,190 pretty good time over the years. 89 00:06:18,450 --> 00:06:23,830 As his members grow into the thousands, Vin Salet needs more brokers to handle 90 00:06:23,830 --> 00:06:24,830 all the trades. 91 00:06:25,290 --> 00:06:30,130 One World Capital seems legitimate, and Vin Salet recommends it to his 92 00:06:30,130 --> 00:06:31,130 subscribers. 93 00:06:31,690 --> 00:06:37,080 According to Boyer, The influx of business puts One World on the map. 94 00:06:38,060 --> 00:06:44,820 Freedom Rocks was huge to One World. They were easily, you know, 50 to 70 95 00:06:44,820 --> 00:06:46,660 percent of all of One World's accounts. 96 00:06:46,900 --> 00:06:50,660 And without them, One World wasn't much of a business. 97 00:06:51,380 --> 00:06:53,780 One World is up and running. 98 00:06:53,980 --> 00:06:59,020 Within a year, the broker amasses $34 million in customer deposits. 99 00:06:59,600 --> 00:07:02,280 And it's not long before Charles Martin... 100 00:07:02,590 --> 00:07:04,270 flaunts his newfound success. 101 00:07:05,970 --> 00:07:10,570 Patrick O 'Neill owns Little Ricky's, a bar just down the street from One 102 00:07:10,570 --> 00:07:11,570 World's office. 103 00:07:11,850 --> 00:07:15,370 Charles would pull up every day with a different car. It would be the red 104 00:07:15,370 --> 00:07:19,690 Ferrari, the black Bentley. It would be the Denali, the Escalade. He had a fancy 105 00:07:19,690 --> 00:07:22,110 BMW. An ongoing comedy, basically. 106 00:07:22,410 --> 00:07:26,350 Along with customer Denny Niles and bar manager Marie Albrecht... 107 00:07:26,620 --> 00:07:30,100 O 'Neal recalls Martin's lavish tipping at the restaurant. 108 00:07:30,340 --> 00:07:36,480 Pretty regularly. He would throw the girls $100, and $100 were his... 109 00:07:36,800 --> 00:07:40,080 Standard. To carry out people, as Marie said, were tripping over each other, 110 00:07:40,100 --> 00:07:41,800 trying to fight to take care of them. 111 00:07:42,040 --> 00:07:43,860 Oh, he's mine tonight. He's mine tonight. 112 00:07:44,180 --> 00:07:45,180 Take turns. 113 00:07:46,260 --> 00:07:50,940 Martin's partner, Jack Walsh, also enjoys the comforts of their new life. 114 00:07:51,160 --> 00:07:54,080 He buys this $1 .5 million house. 115 00:07:54,970 --> 00:07:59,210 The duo's outward success is comforting to potential clients. 116 00:08:00,070 --> 00:08:05,370 This woman, who we'll call Judy, handles the trades for dozens of Forex 117 00:08:05,370 --> 00:08:11,250 investors. In 2006, she gets a recommendation to move her clients' 118 00:08:11,250 --> 00:08:12,250 One World. 119 00:08:12,390 --> 00:08:17,370 She appears in silhouette due to her role as an unnamed witness in the later 120 00:08:17,370 --> 00:08:18,370 investigation. 121 00:08:19,240 --> 00:08:22,660 When you see lavish spending like that, maybe it should be a red flag, but it 122 00:08:22,660 --> 00:08:25,140 really wasn't. To me, it just said, oh, they're doing great. 123 00:08:25,480 --> 00:08:29,460 Judy speaks with Jack Walsh about trading through one world. 124 00:08:29,860 --> 00:08:32,600 He was very friendly. He was very open. 125 00:08:33,039 --> 00:08:37,820 I did not get the impression that he was a super expert in the forex in 126 00:08:37,820 --> 00:08:42,179 particular, but I really didn't care because he had a staff to handle all 127 00:08:43,659 --> 00:08:48,420 Comforted by Walsh's professionalism, she migrates her clients' accounts. 128 00:08:49,100 --> 00:08:53,820 I wound up transferring somewhere between 80 and 100 accounts, probably 129 00:08:53,820 --> 00:08:55,180 million, maybe a little bit more. 130 00:08:55,940 --> 00:09:02,280 In addition, she and her husband put a portion of their own savings, some $125 131 00:09:02,280 --> 00:09:08,200 ,000, in the new brokerage. All the funds are deposited into what's called a 132 00:09:08,200 --> 00:09:09,940 margin account at One World. 133 00:09:10,260 --> 00:09:16,220 And as long as Judy's trades are successful, that money belongs to her, 134 00:09:16,220 --> 00:09:20,580 World. They should never have access to your funds unless you have given them 135 00:09:20,580 --> 00:09:22,260 explicit access to your funds. 136 00:09:22,580 --> 00:09:26,560 It's untouchable. Or at least it's supposed to be. 137 00:09:27,860 --> 00:09:33,680 Next, a routine audit reveals missing money and a sordid past. 138 00:09:34,200 --> 00:09:39,840 He had a felony drug conviction dating back from the 90s. And Judy is seeing 139 00:09:39,840 --> 00:09:45,120 red. I view Jack and Charles as two clowns. Two... 140 00:09:45,450 --> 00:09:48,450 Idiots that didn't know how good they had it. 141 00:09:59,230 --> 00:10:05,610 In early 2007, Charles Martin and Jack Walsh are riding high on the success of 142 00:10:05,610 --> 00:10:08,650 their Forex trading brokerage, One World Capital. 143 00:10:09,520 --> 00:10:14,860 But Martin, the much more flamboyant of the two, apparently isn't satisfied with 144 00:10:14,860 --> 00:10:16,500 the life of a Forex trader. 145 00:10:16,820 --> 00:10:21,260 He uses his newfound fortune to live a movie star lifestyle. 146 00:10:23,100 --> 00:10:28,560 At Little Ricky's, Martin's favorite bar, his friends recall his outrageous 147 00:10:28,560 --> 00:10:33,480 stories about flying private jets to celebrity charity events. 148 00:10:34,000 --> 00:10:35,300 He lived so large. 149 00:10:35,910 --> 00:10:39,030 Every time he'd go out of town, he'd come back and have stories about people 150 00:10:39,030 --> 00:10:40,030 he'd spent time with. 151 00:10:40,210 --> 00:10:45,670 I think he liked to think that he was part of that group as well. I think that 152 00:10:45,670 --> 00:10:49,430 was his goal in life, to become a superstar. 153 00:10:50,010 --> 00:10:55,210 His voicemail on his phone was Sylvester Stallone saying, Charles is not in. 154 00:10:55,310 --> 00:10:57,310 Please leave him a message. I forgot that. 155 00:10:58,860 --> 00:11:05,440 In February, he rents a luxury box to watch the Chicago Bears in Super Bowl 156 00:11:06,300 --> 00:11:11,900 Friends say Martin, seen here at an event in New York, invites Vanessa 157 00:11:11,900 --> 00:11:17,500 and her future husband, Nick Lachey, to join him. In May, Martin sponsors a 158 00:11:17,500 --> 00:11:19,060 charity event in Las Vegas. 159 00:11:19,380 --> 00:11:23,760 According to Denny Niles, who tags along, it's a celebrity -filled weekend. 160 00:11:24,490 --> 00:11:28,010 Tiger Woods and that whole group, and Jon Bon Jovi and his group. 161 00:11:28,290 --> 00:11:32,930 Bon Jovi was there. Yeah. I was there for four days, and it was nonstop 162 00:11:32,930 --> 00:11:33,930 celebrities. 163 00:11:36,670 --> 00:11:42,690 Just next door to Little Ricky's, Martin opens his own film production company. 164 00:11:43,650 --> 00:11:50,230 Charles' office was decadent. He had $25 ,000 desks filled with 165 00:11:50,230 --> 00:11:52,570 expensive wine, cognac. 166 00:11:53,210 --> 00:11:54,230 Johnny Walker blew. 167 00:11:54,450 --> 00:11:58,310 He wanted to impress, and it was impressive. 168 00:11:59,830 --> 00:12:05,550 He invests in an independent film called Breaking Point, starring Tom Berringer 169 00:12:05,550 --> 00:12:07,550 and rapper Busta Rhymes. 170 00:12:08,890 --> 00:12:10,870 Why are you even asking me about this? 171 00:12:12,090 --> 00:12:14,450 I ain't seen her in a long while. 172 00:12:15,890 --> 00:12:22,190 Shot on location in New York, Martin lavishes money on the film and its 173 00:12:23,010 --> 00:12:27,850 Boyer recalls a time Martin's more conservative partner, Jack Walsh, 174 00:12:27,850 --> 00:12:33,210 Martin about an unexpected charge at a hotel incurred by one of the film's 175 00:12:33,210 --> 00:12:34,210 stars. 176 00:12:34,470 --> 00:12:40,270 There was $20 ,000 worth of damage, and Jack said, well, we're not paying for 177 00:12:40,270 --> 00:12:44,210 this. And Charles said, well, you've got to keep the talent happy. 178 00:12:45,730 --> 00:12:48,650 Martin may fancy himself a hotshot producer. 179 00:12:49,420 --> 00:12:53,380 But perhaps he should be paying more attention to his Forex brokerage. 180 00:12:53,700 --> 00:12:59,720 In June 2007, the National Futures Association completes a routine audit of 181 00:12:59,720 --> 00:13:00,720 World's records. 182 00:13:02,080 --> 00:13:06,100 It's the first crack in the facade that will soon come crumbling down. 183 00:13:07,620 --> 00:13:13,000 The report states that Charles Martin is ineligible to work in the Forex 184 00:13:13,000 --> 00:13:14,000 industry. 185 00:13:15,530 --> 00:13:18,750 FBI Special Agent Brent Potter explains. 186 00:13:19,650 --> 00:13:23,970 The NFA audit found out that he wasn't even supposed to be there because he had 187 00:13:23,970 --> 00:13:28,250 a felony drug conviction dating back from the 90s and as a result was 188 00:13:28,250 --> 00:13:31,930 barred by the NFA from any official position with a futures commission 189 00:13:31,930 --> 00:13:33,050 or a Forex dealer. 190 00:13:34,170 --> 00:13:37,850 Martin was arrested in 1996 for cocaine possession. 191 00:13:38,700 --> 00:13:43,340 So his partner Walsh deliberately kept Martin's name off the books when he 192 00:13:43,340 --> 00:13:45,300 registered One World with the NFA. 193 00:13:45,980 --> 00:13:52,500 But when NFA auditors started dropping in on One World's office, Martin had to 194 00:13:52,500 --> 00:13:53,500 take cover. 195 00:13:54,230 --> 00:13:57,990 Martin was in the habit of actually showing up at the One World Capital 196 00:13:57,990 --> 00:14:01,910 early in the morning and checking in with some of the staff that was there 197 00:14:01,910 --> 00:14:06,190 then beating feet over to his office a few blocks away in Winnetka, staying 198 00:14:06,190 --> 00:14:10,090 there for the remainder of the day while the NFA audit staff was on site and 199 00:14:10,090 --> 00:14:14,130 then returning to the office sometimes after hours to again check in with Walsh 200 00:14:14,130 --> 00:14:15,610 or some of the other employees. 201 00:14:16,730 --> 00:14:19,090 But in interviews with clients... 202 00:14:19,390 --> 00:14:24,090 NFA auditors have learned that Martin is a de facto partner at One World. 203 00:14:24,310 --> 00:14:26,810 His game of hide -and -seek is over. 204 00:14:27,930 --> 00:14:29,130 And there's more. 205 00:14:29,590 --> 00:14:34,810 Mark Vincilet's Freedom Rocks subscribers account for more than half 206 00:14:34,810 --> 00:14:35,890 World's client base. 207 00:14:36,190 --> 00:14:41,710 When he reviews the NFA report, he learns that customer money is being 208 00:14:41,710 --> 00:14:43,330 for company expenses. 209 00:14:44,870 --> 00:14:48,470 There were two things in the audit report that were primarily troubling. 210 00:14:48,940 --> 00:14:53,600 The first one was that they were having a hard time accounting for customer 211 00:14:53,600 --> 00:14:58,560 funds. And the second one was that there was an allegation they might be mixing 212 00:14:58,560 --> 00:15:01,200 the customer funds with corporate funds. 213 00:15:01,600 --> 00:15:07,420 And both of those are an absolute no -no in the brokering world. 214 00:15:08,140 --> 00:15:12,120 On June 15th, he tells his members what he's learned. 215 00:15:12,500 --> 00:15:14,520 We wanted to make sure that people... 216 00:15:14,860 --> 00:15:20,320 could understand what was going on, that these were not normal allegations, and 217 00:15:20,320 --> 00:15:23,460 that they could make the best decision about what to do with their money. 218 00:15:24,620 --> 00:15:29,660 That day, Freedom Rock subscribers flood One World with requests to withdraw 219 00:15:29,660 --> 00:15:30,660 their funds. 220 00:15:31,320 --> 00:15:33,860 Martin does his best to stop the panic. 221 00:15:34,480 --> 00:15:38,620 He says the money is simply stored in offshore accounts. 222 00:15:40,300 --> 00:15:44,680 Charles would always say that he had money at HSBC Hong Kong, and he had 223 00:15:44,680 --> 00:15:49,440 at Credit Suisse, and all these foreign banks that were overseas. 224 00:15:49,920 --> 00:15:54,900 One world staggers along after the Freedom Rocks traders pull out, and 225 00:15:54,900 --> 00:15:57,140 eventually the panic subsides. 226 00:15:57,740 --> 00:16:02,340 But Jared Boyer just can't shake the feeling that something isn't right. 227 00:16:02,980 --> 00:16:07,700 One morning in late July, he confronts Martin about the shortfall in customer 228 00:16:07,700 --> 00:16:08,700 accounts. 229 00:16:09,840 --> 00:16:13,940 I see Charles walking down the street with his Starbucks in hand, and I walked 230 00:16:13,940 --> 00:16:18,700 up to him and said, Charles, I need to see the money. I need to see it. 231 00:16:19,460 --> 00:16:20,460 Can I see it? 232 00:16:20,860 --> 00:16:21,920 He said, no. 233 00:16:22,840 --> 00:16:25,500 And I said, well, I can't work here anymore then. 234 00:16:25,940 --> 00:16:30,940 And he patted me on the back and wished me well and said, just leave without 235 00:16:30,940 --> 00:16:32,240 making too much noise. 236 00:16:33,060 --> 00:16:34,060 And so I did. 237 00:16:35,820 --> 00:16:40,200 Even to his friends at Little Ricky's, it's obvious that there's trouble with 238 00:16:40,200 --> 00:16:41,200 Charles Martin. 239 00:16:41,300 --> 00:16:43,520 His car's not as flashy. 240 00:16:43,720 --> 00:16:45,980 His tip's not so big. 241 00:16:46,680 --> 00:16:52,900 I just saw his wife driving all of a sudden a minivan, and it wasn't a brand 242 00:16:52,900 --> 00:16:53,900 -new minivan. 243 00:16:53,960 --> 00:16:57,240 And then he had a nanny. 244 00:16:57,740 --> 00:17:02,820 that used to drive a Range Rover, all of a sudden sees in a car that looks like 245 00:17:02,820 --> 00:17:03,940 a kid's college car. 246 00:17:04,260 --> 00:17:07,780 And the tips went from what the server said. The tips stopped coming in at 247 00:17:07,800 --> 00:17:09,900 They started coming in at $50 and down. 248 00:17:10,960 --> 00:17:16,560 As summer turns to fall, Forex account manager Judy gets a call from a fellow 249 00:17:16,560 --> 00:17:17,560 One World client. 250 00:17:18,020 --> 00:17:21,880 He says One World is late paying out his $100 ,000 redemption. 251 00:17:22,740 --> 00:17:24,740 She gets Walsh on the phone. 252 00:17:25,550 --> 00:17:29,490 I called Jack and said, listen, my friend said that he's been trying to get 253 00:17:29,490 --> 00:17:33,110 money out. And Jack says, oh, I'm sure that's not a problem. I'll look into it. 254 00:17:33,330 --> 00:17:36,810 And he called me back and said, oh, no, it's not a problem. He'll have his wire 255 00:17:36,810 --> 00:17:37,810 tomorrow. 256 00:17:38,290 --> 00:17:40,070 But the wire doesn't come. 257 00:17:40,650 --> 00:17:45,670 Instead, over the next few weeks, Judy's friend is met with a string of excuses. 258 00:17:46,810 --> 00:17:51,170 There was always a problem. The girl who did the wires was sick that day. They 259 00:17:51,170 --> 00:17:53,910 lost it in the shuffle, and they had to request the wire again. 260 00:17:54,290 --> 00:17:57,710 Whatever, on and on and on, day after day after day. 261 00:17:59,770 --> 00:18:04,650 Something is very wrong at One World, and Judy has a pit in her stomach. 262 00:18:05,290 --> 00:18:07,870 What dawns on me is nobody's going to get a dime back ever. 263 00:18:08,470 --> 00:18:12,310 We have almost $8 million tied up, and we're not going to get any of it back. 264 00:18:13,500 --> 00:18:18,100 Next, find out where Martin is really putting all those dollar bills. 265 00:18:18,600 --> 00:18:22,940 He would go up to a private room with some of his friends. They would have a 266 00:18:22,940 --> 00:18:24,560 number of strippers to themselves. 267 00:18:36,060 --> 00:18:38,700 On December 6th, Judy. 268 00:18:39,100 --> 00:18:44,200 A Forex accounts manager and One World client sees something she's never seen 269 00:18:44,200 --> 00:18:49,120 before. On any given day when I come to my trading screen, this is the column I 270 00:18:49,120 --> 00:18:53,260 care about the most, and it's the one I look at first. It's the margin level. It 271 00:18:53,260 --> 00:18:57,360 should be uniform all the way down my screen, right around 1 ,000%, and that 272 00:18:57,360 --> 00:19:00,120 tells me that all these accounts are vested equally. 273 00:19:00,780 --> 00:19:03,840 But that day, her screen looks different. 274 00:19:04,570 --> 00:19:08,050 All of these blank lines here tell me that these accounts have been 275 00:19:08,050 --> 00:19:10,530 They've been drained and stopped out. 276 00:19:11,090 --> 00:19:13,250 It can only mean one thing. 277 00:19:13,710 --> 00:19:16,950 Someone at the other end is taking the money out of these accounts right in 278 00:19:16,950 --> 00:19:17,950 front of my eyes. 279 00:19:19,090 --> 00:19:23,970 Judy calls the Commodity Futures Trading Commission, or CFTC. 280 00:19:24,450 --> 00:19:27,610 And I said I can show you a crime in progress right now. 281 00:19:28,290 --> 00:19:31,210 On December 13, 2007... 282 00:19:31,740 --> 00:19:36,340 The CFTC issues an injunction freezing One World's assets. 283 00:19:36,740 --> 00:19:41,420 They contact the FBI, and Special Agent Brent Potter is assigned to the case. 284 00:19:41,680 --> 00:19:43,820 The situation is dire. 285 00:19:44,280 --> 00:19:49,340 They had something well under $100 ,000 as far as capital on hand, but customer 286 00:19:49,340 --> 00:19:51,600 liabilities were approaching $20 million. 287 00:19:51,980 --> 00:19:55,540 So there was no way that they had enough money to repay their clients. 288 00:19:56,840 --> 00:20:02,220 Potter teams up with Special Agent Jason Gibson from IRS Criminal Investigations 289 00:20:02,220 --> 00:20:04,560 to determine where the money went. 290 00:20:04,860 --> 00:20:07,580 We reviewed bank statements, credit cards. 291 00:20:07,780 --> 00:20:11,140 We conducted witness interviews. We tracked down every dollar that we could 292 00:20:11,140 --> 00:20:13,060 possibly see coming out of One World Capital Group. 293 00:20:14,040 --> 00:20:19,440 The two soon realized that Jack Walsh and Charles Martin have simply been 294 00:20:19,440 --> 00:20:22,340 helping themselves to the customers' margin accounts. 295 00:20:23,070 --> 00:20:27,430 What you could see is that money being posted by the customers from Margin was 296 00:20:27,430 --> 00:20:31,170 essentially just being taken right out and being paid largely to Walsh in the 297 00:20:31,170 --> 00:20:33,530 form of wire transfers to his personal bank account. 298 00:20:34,110 --> 00:20:37,970 From there, Walsh wired money to Charles Martin's account. 299 00:20:38,510 --> 00:20:42,370 And from Charles Martin's account, there was spending to extremes that I've 300 00:20:42,370 --> 00:20:43,390 never seen before in my career. 301 00:20:43,870 --> 00:20:47,550 The total damage, more than $10 million. 302 00:20:48,780 --> 00:20:55,360 Charles Martin bought a Bentley, Ferrari, Suburban, Land Rover, BMW, 303 00:20:55,360 --> 00:20:59,140 ,000 on commercial airfare in addition to $1 million in private flight time, 304 00:20:59,220 --> 00:21:04,420 around $1 million at elite hotels, $50 ,000 at toy stores, $30 ,000 at an area 305 00:21:04,420 --> 00:21:09,580 liquor store, over $100 ,000 at an electronics store, sets of underwear 306 00:21:09,580 --> 00:21:12,780 company called Brioni that retailed for over $250. 307 00:21:14,300 --> 00:21:19,460 Martin even manages to spend $1 million at a strip club in Manhattan. 308 00:21:19,800 --> 00:21:24,400 He would spend well in excess of $10 ,000 a night there. He would go up to a 309 00:21:24,400 --> 00:21:25,920 private room with some of his friends. 310 00:21:26,160 --> 00:21:28,340 They would have a number of strippers to themselves. 311 00:21:29,340 --> 00:21:34,560 All the while, Martin and Walsh have been paying redemption requests using 312 00:21:34,560 --> 00:21:35,560 clients' money. 313 00:21:36,300 --> 00:21:40,500 From the moment an investor came in, their initial deposits were turned 314 00:21:40,500 --> 00:21:44,440 and used to fund redemptions for existing One World clients. 315 00:21:44,740 --> 00:21:48,120 So their money didn't even, in some cases, fit in One World's account for 316 00:21:48,120 --> 00:21:52,820 whole day after they deposited the funds. It almost defies imagination. 317 00:21:54,160 --> 00:21:58,520 In January 2009, agents arrest Martin and Walt. 318 00:21:58,860 --> 00:22:00,960 They're charged with wire fraud. 319 00:22:02,190 --> 00:22:05,330 Special Agent Potter interviews Martin in custody. 320 00:22:05,610 --> 00:22:08,730 Potter asks why he stole his client's money. 321 00:22:09,150 --> 00:22:11,530 Martin says they'd lose it anyway. 322 00:22:12,350 --> 00:22:18,010 Martin was of the opinion that about 70 % of Forex traders would lose all or 323 00:22:18,010 --> 00:22:20,470 nearly all of their funds within about two or three weeks. 324 00:22:21,010 --> 00:22:24,170 He just figured I'll steal it before they have a chance to lose it and 325 00:22:24,170 --> 00:22:25,170 never know the difference. 326 00:22:25,910 --> 00:22:30,410 Meanwhile, Jack Walsh claims he was duped by his partner. 327 00:22:30,970 --> 00:22:34,570 Walsh essentially professed ignorance as to what was going on. He was just 328 00:22:34,570 --> 00:22:38,450 trying to keep the books as best he could, and Martin was primarily the one 329 00:22:38,450 --> 00:22:42,030 spending all the money that had been siphoned out of customer trading 330 00:22:43,150 --> 00:22:49,150 In May 2011, Martin and Walsh each plead guilty to three counts of fraud and tax 331 00:22:49,150 --> 00:22:53,830 evasion. Martin is sentenced to 17 years in federal prison. 332 00:22:54,390 --> 00:22:56,030 Walsh gets 12 and a half. 333 00:22:58,060 --> 00:23:04,020 Agent sees countless pieces of antique furniture, sports memorabilia, and other 334 00:23:04,020 --> 00:23:08,960 toys belonging to Martin and Walsh. But they're worth just a fraction of the $16 335 00:23:08,960 --> 00:23:12,880 million they owe more than 1 ,000 investors. 336 00:23:14,320 --> 00:23:19,940 Judy personally loses $1 million to One World, in addition to the funds of her 337 00:23:19,940 --> 00:23:21,100 312 clients. 338 00:23:22,510 --> 00:23:27,550 At the same time, she and her husband are hit with another unexpected blow. 339 00:23:28,310 --> 00:23:30,030 We had three sources of income. 340 00:23:30,270 --> 00:23:34,930 One was trading the forex itself. The second one was I did charge a fee to 341 00:23:34,930 --> 00:23:37,910 for my clients, and that was extremely lucrative as well. 342 00:23:38,170 --> 00:23:42,350 And then the third, we both had full -time jobs with a company that declared 343 00:23:42,350 --> 00:23:49,110 bankruptcy themselves, and our pensions were reduced about 90%. So we were wiped 344 00:23:49,110 --> 00:23:50,110 out. 345 00:23:50,760 --> 00:23:56,140 She and her husband declare bankruptcy and lose their dream home in 346 00:23:56,380 --> 00:24:01,320 My husband put six years at least of this into his life. He hand -built this 347 00:24:01,320 --> 00:24:05,760 house from the bottom up, this beautiful, gorgeous house, and we lost 348 00:24:06,700 --> 00:24:13,060 Ultimately, Judy blames Martin and Walsh's insatiable greed for ruining 349 00:24:13,060 --> 00:24:14,060 of lives. 350 00:24:14,620 --> 00:24:18,940 I view Jack and Charles as two clowns, two... 351 00:24:19,240 --> 00:24:25,920 Idiots that didn't know how good they had it. And they were too greedy to 352 00:24:25,920 --> 00:24:29,020 just let it ride as the business that it was. 353 00:24:30,520 --> 00:24:35,480 Coming up next, a Miami money manager commits the ultimate betrayal. 354 00:24:35,900 --> 00:24:42,240 You got a guy who looks a dying man in the eyes and the woman who he loves and 355 00:24:42,240 --> 00:24:44,720 professes that he's going to look after her. 356 00:24:45,310 --> 00:24:49,290 The whole while knows that he has absolutely no intention of doing that. 357 00:25:02,190 --> 00:25:04,570 October 27, 2010. 358 00:25:05,450 --> 00:25:11,470 In this Miami strip mall, Araceli Mercy Valle reports to her regular job as an 359 00:25:11,470 --> 00:25:14,910 assistant at an accounting firm called Varez Tax. 360 00:25:15,250 --> 00:25:17,010 Michael Haber is her attorney. 361 00:25:17,730 --> 00:25:20,550 October 27th is a day just like any other day. 362 00:25:20,750 --> 00:25:24,970 Mercy opens the office, fires up the photocopier, gets everything ready to 363 00:25:24,970 --> 00:25:26,830 and roll, and business begins as usual. 364 00:25:29,210 --> 00:25:33,530 The only difference between that day and any other day is, J .C. never shows up 365 00:25:33,530 --> 00:25:34,530 for work. 366 00:25:35,240 --> 00:25:41,600 JC is Juan Carlos Rodriguez, her boss, a tax expert and financial advisor. 367 00:25:41,800 --> 00:25:45,680 He's a CPA, but today he's MIA. 368 00:25:46,860 --> 00:25:52,300 Valle has known him for more than 20 years, and since the recent death of her 369 00:25:52,300 --> 00:25:55,680 husband, he has been Valle's pillar of strength. 370 00:25:56,400 --> 00:25:58,940 JC became somewhat of a confidant. 371 00:25:59,390 --> 00:26:03,890 for Araceli. He became somebody that she could ask very interpersonal questions 372 00:26:03,890 --> 00:26:08,570 to, somebody who she could rely upon to help her in her most dire hour. 373 00:26:09,430 --> 00:26:15,350 But it's just one of JC's two faces, at least according to the clients who are 374 00:26:15,350 --> 00:26:17,270 showing up today looking for him. 375 00:26:18,290 --> 00:26:23,190 Where is JC? Why is JC not here? I need to talk to JC. If I don't talk to JC 376 00:26:23,190 --> 00:26:24,730 right now, I'm going to the FBI. 377 00:26:25,870 --> 00:26:28,550 They claim Rodriguez owed them money. 378 00:26:28,960 --> 00:26:29,960 And a lot of it. 379 00:26:30,460 --> 00:26:37,020 Vanier herself has her entire savings, $125 ,000, invested with her boss. 380 00:26:38,320 --> 00:26:41,140 Confused, she frantically tries to get a hold of him. 381 00:26:43,120 --> 00:26:47,840 Calling, texting, even going so far as to try and call JC's wife and text JC's 382 00:26:47,840 --> 00:26:53,020 wife, because he's not responding to Araceli at this point either. So Araceli 383 00:26:53,020 --> 00:26:55,880 getting more and more concerned by the moment. 384 00:26:56,790 --> 00:27:00,410 Finally, at about 1 .30 p .m., she gets a response. 385 00:27:00,790 --> 00:27:07,270 It reads, I am so sorry. I ruined your finances and betrayed your trust and 386 00:27:07,270 --> 00:27:12,110 as a sister to me. I let you down big time, and I feel really bad. 387 00:27:13,350 --> 00:27:17,270 I think something clicks, and she finally realizes that this man, who has 388 00:27:17,270 --> 00:27:22,590 her friend, her brother for 20 -plus years, took her entire life savings and 389 00:27:22,590 --> 00:27:23,590 bolted with it. 390 00:27:26,480 --> 00:27:31,000 Before he opened an accounting office, Rodriguez was a comptroller at an 391 00:27:31,000 --> 00:27:33,040 aircraft repair company in Miami. 392 00:27:33,560 --> 00:27:38,480 Rodriguez was a sort of social director among the predominantly male workers. 393 00:27:39,940 --> 00:27:45,000 Mildred Geraldo's husband worked there. She recalls the name they adopted for 394 00:27:45,000 --> 00:27:46,000 themselves, 395 00:27:46,240 --> 00:27:47,240 the Dudes. 396 00:27:48,040 --> 00:27:54,160 Juan Carlos was seen as the organizer of everything that they did. They would go 397 00:27:54,160 --> 00:27:55,420 to Dolphin Games. 398 00:27:55,800 --> 00:28:00,280 Football games, NASCAR, concerts, vacation. 399 00:28:00,640 --> 00:28:03,680 They turned everything into some type of a function. 400 00:28:04,460 --> 00:28:08,640 And that's how the dudes came to be, as they like to call themselves. 401 00:28:10,220 --> 00:28:14,800 As leader, Rodriguez earns a level of trust in the brotherhood. 402 00:28:15,160 --> 00:28:19,340 They trusted him implicitly. They were brothers. I believe they looked up to 403 00:28:19,340 --> 00:28:20,340 a lot. 404 00:28:20,750 --> 00:28:26,430 In 2001, Rodriguez leaves the repair shop to join his brother's CPA business 405 00:28:26,430 --> 00:28:28,490 called Varez Tax. 406 00:28:28,930 --> 00:28:32,230 Naturally, his old friends become his new clients. 407 00:28:32,550 --> 00:28:38,250 And according to FBI Special Agent Cade Cannon, Rodriguez offers them more than 408 00:28:38,250 --> 00:28:39,630 just tax advice. 409 00:28:40,630 --> 00:28:44,370 People would come into Varez to have their taxes done at the end of the year. 410 00:28:44,430 --> 00:28:46,290 He'd say, hey, um... 411 00:28:46,520 --> 00:28:50,920 I have a way that you can earn money to pay any tax liability. I will invest 412 00:28:50,920 --> 00:28:54,260 your money in the stock market, and I will guarantee you a rate of return. 413 00:28:56,360 --> 00:29:02,440 Through a company he calls MDN Financial, Rodriguez claims to invest in 414 00:29:02,520 --> 00:29:04,100 bonds, and precious metals. 415 00:29:04,420 --> 00:29:08,780 If investors leave their money with him for six months to a year, they earn a 416 00:29:08,780 --> 00:29:10,780 guaranteed check every month. 417 00:29:13,580 --> 00:29:15,760 Hernan Mejia is one of the dudes. 418 00:29:16,380 --> 00:29:21,660 When he cashes out his pension in 2009, he and his wife, Ophelia, meet with 419 00:29:21,660 --> 00:29:22,660 Rodriguez. 420 00:29:23,000 --> 00:29:28,740 We did trust him a lot, and since we trust him, that's the reason why we also 421 00:29:28,740 --> 00:29:32,660 had him do our income tax, our yearly income tax. 422 00:29:33,820 --> 00:29:38,760 Rodriguez tells them they can avoid paying taxes on the money by rolling it 423 00:29:38,760 --> 00:29:43,700 into his MDN Financial, and he gives Mejia this flyer. 424 00:29:43,930 --> 00:29:47,630 claiming they can earn a big fat rate guaranteed. 425 00:29:48,590 --> 00:29:53,910 This is the flyer that he gave my husband, and he had the different 426 00:29:53,910 --> 00:29:58,350 plans depending on the amount of money. We were going to be investing $40 ,000, 427 00:29:58,350 --> 00:30:03,770 so in turn we were going to be receiving an interest, 22%, which amounted to 428 00:30:03,770 --> 00:30:05,410 $750 a month. 429 00:30:05,970 --> 00:30:09,850 The Mejias sign a contract for six months of payments. 430 00:30:10,530 --> 00:30:11,870 You know, why not? 431 00:30:12,480 --> 00:30:18,540 I mean, to receive a check of $750 a month, just by having the $40 ,000, it 432 00:30:18,540 --> 00:30:20,320 better than putting it into a bank. 433 00:30:21,660 --> 00:30:24,860 About 10 times better than putting it in the bank. 434 00:30:25,240 --> 00:30:31,940 Rodriguez is offering rates of return as high as 50%. But trusting investors 435 00:30:31,940 --> 00:30:38,040 have no idea how improbable Rodriguez's offer really is. 436 00:30:38,590 --> 00:30:42,030 Sometimes I would think, you know, how does he do this? But we say, well, maybe 437 00:30:42,030 --> 00:30:48,410 he's investing in the stock market or in some other, you know, institutions that 438 00:30:48,410 --> 00:30:51,930 we don't know of, and maybe that's how he's getting the high interest rate. 439 00:30:52,810 --> 00:30:57,550 And according to prosecutor Robert Luck, word spreads quickly. 440 00:30:58,190 --> 00:31:02,470 It was a mom -and -pop, word -of -mouth sort of thing. Someone would do well and 441 00:31:02,470 --> 00:31:03,890 get invested, and they would tell their family. 442 00:31:04,270 --> 00:31:07,590 They would say, hey, mom, I'm investing with Mr. Rodriguez. You should go over 443 00:31:07,590 --> 00:31:10,870 there with me and see about investing with him. It's a great deal. Here's what 444 00:31:10,870 --> 00:31:11,870 I'm getting. 445 00:31:12,830 --> 00:31:16,850 Soon, MDN Financial has more than 100 investors. 446 00:31:17,130 --> 00:31:22,850 And in June 2009, Rodriguez moves into a gated community along the coast. 447 00:31:23,070 --> 00:31:25,230 He appears to be a real success. 448 00:31:26,390 --> 00:31:27,910 His wife is driving a BMW. 449 00:31:28,130 --> 00:31:29,830 His kids are attending private school. 450 00:31:30,030 --> 00:31:32,230 He's supporting his own children and his stepchildren. 451 00:31:32,730 --> 00:31:37,750 So this is someone who is living a very good lifestyle, while in 2008, 2009, 452 00:31:37,950 --> 00:31:40,190 2010, a lot of the country is really suffering. 453 00:31:41,850 --> 00:31:47,350 Next, friends of the miracle moneymaker discover he's really a two -timing tax 454 00:31:47,350 --> 00:31:53,390 man. I mean, this was a friend that we trusted, and for him to do this to us, 455 00:31:53,430 --> 00:31:55,270 it's really, really strange. 456 00:31:57,360 --> 00:32:03,920 See more testimony from Rodriguez's best friends at AmericanGreed .CNBC .com. 457 00:32:05,200 --> 00:32:09,800 Want inside information from behind the scenes of the show? Join the Greed 458 00:32:09,800 --> 00:32:10,800 social network. 459 00:32:11,040 --> 00:32:14,380 Like us on American Greed's Facebook page. We'll be right back. 460 00:32:20,480 --> 00:32:27,150 In 2009, Miami accountant Juan Carlos Rodriguez... claims to be a stock market 461 00:32:27,150 --> 00:32:33,930 guru, investors in his company MDN Financial get unbeatable returns in an 462 00:32:33,930 --> 00:32:35,470 otherwise down economy. 463 00:32:36,350 --> 00:32:41,850 Araceli Vallee has worked with Rodriguez for more than 20 years, first at an 464 00:32:41,850 --> 00:32:45,650 aircraft repair company, and now as his assistant. 465 00:32:45,910 --> 00:32:48,930 Over that time, the two have grown close. 466 00:32:49,330 --> 00:32:52,750 Her attorney, Michael Haber, speaks on her behalf. 467 00:32:53,200 --> 00:32:57,760 If she needed surgery, if her financial planning was an issue, if her children 468 00:32:57,760 --> 00:33:02,300 were in jeopardy, whatever it was, there was a relationship there that she could 469 00:33:02,300 --> 00:33:04,940 trust his advice or felt that she could trust his advice. 470 00:33:05,940 --> 00:33:11,860 In November, Vallier's husband of 22 years is diagnosed with lung cancer. 471 00:33:12,440 --> 00:33:15,720 She goes to her boss for financial guidance. 472 00:33:16,680 --> 00:33:20,440 What should I do? I've got a mortgage. I've got children. There's college 473 00:33:20,440 --> 00:33:24,500 issues. There's all of these things that we have to consider and deal with. The 474 00:33:24,500 --> 00:33:27,980 first thing that he suggested was that she take out an equity loan. 475 00:33:29,420 --> 00:33:34,360 Knowing she will get a life insurance payment when her husband passes, 476 00:33:34,360 --> 00:33:41,220 suggests she take out a home equity loan of $65 ,000, then invest that money 477 00:33:41,220 --> 00:33:42,460 with him. 478 00:33:43,920 --> 00:33:48,860 And then she would receive and exchange payments back on a biweekly basis of $1 479 00:33:48,860 --> 00:33:50,680 ,500 every two weeks. 480 00:33:51,360 --> 00:33:56,880 Over the next few months, she invests almost $125 ,000 with her boss. 481 00:33:58,140 --> 00:34:01,860 And Vallier is thankful for the biweekly payments. 482 00:34:02,820 --> 00:34:05,420 She's able to have a little bit of peace of mind. 483 00:34:05,980 --> 00:34:09,340 She's got extra time with her husband. Every moment that she has to spend with 484 00:34:09,340 --> 00:34:12,199 him is precious, and she doesn't have to worry about dollars and cents because 485 00:34:12,199 --> 00:34:13,340 she's got checks coming in. 486 00:34:14,219 --> 00:34:19,780 What Valle doesn't know is that her money isn't coming from any investments 487 00:34:19,780 --> 00:34:25,560 Rodriguez's. Not a single dollar, not a single dollar was invested in any sort 488 00:34:25,560 --> 00:34:29,560 of stock, bond, precious metal, or other standard investment. 489 00:34:30,000 --> 00:34:32,980 And it really was, in every way, a complete ripoff. 490 00:34:33,980 --> 00:34:39,840 Rodriguez is just using new investors' money to pay off his existing clients 491 00:34:39,840 --> 00:34:40,960 pocketing the rest. 492 00:34:41,760 --> 00:34:43,420 Now he's running out. 493 00:34:43,760 --> 00:34:46,199 By the summer of 2010, things are dire. 494 00:34:46,580 --> 00:34:51,600 The money coming in isn't enough to pay both his obligations financially and the 495 00:34:51,600 --> 00:34:53,940 annuity payment he has obligated himself to pay. 496 00:34:54,659 --> 00:34:58,240 But clients have no idea how broke he is. 497 00:34:58,580 --> 00:35:01,580 And his friends continue to flock to him for advice. 498 00:35:02,590 --> 00:35:07,110 In June, Mildred Giraldo walks into Jaycee's office with some news. 499 00:35:08,130 --> 00:35:10,870 She's sold her administrative services business. 500 00:35:11,710 --> 00:35:13,550 It's more money than we've ever had. 501 00:35:13,890 --> 00:35:17,730 I called Juan Carlos to see what can we do with this money. It's a lot of money. 502 00:35:17,830 --> 00:35:21,670 And he said, don't do anything. Don't go to the bank. Just come to my office. 503 00:35:21,910 --> 00:35:23,530 I'll meet with you in the back room. 504 00:35:23,830 --> 00:35:29,290 I do have to say that he's never shown so much interest in me as he did when 505 00:35:29,290 --> 00:35:30,290 this happened. 506 00:35:32,150 --> 00:35:37,190 Rodriguez tells Geraldo she will have a huge tax burden as a result of the sale. 507 00:35:37,610 --> 00:35:43,170 But if she invests the proceeds with his MD in financial, she can write it off 508 00:35:43,170 --> 00:35:44,170 as an expense. 509 00:35:44,210 --> 00:35:47,290 Then he can pay it back to her on a weekly basis. 510 00:35:48,290 --> 00:35:50,870 She's inclined to trust his advice. 511 00:35:51,570 --> 00:35:54,610 He was like a brother to my husband. 512 00:35:55,310 --> 00:35:58,350 I mean, truly, my husband considered him to be family. 513 00:35:59,120 --> 00:36:06,120 The couple agrees to put in a total of $135 ,000, some for 4 % interest 514 00:36:06,120 --> 00:36:08,740 and some with no interest at all. 515 00:36:09,460 --> 00:36:14,540 He said in three months you will get your money back and then we'll do your 516 00:36:14,540 --> 00:36:16,060 taxes and everything will be fine. 517 00:36:16,720 --> 00:36:22,500 But it's not long before Rodriguez misses a weekly payment. In July, 518 00:36:22,500 --> 00:36:24,340 husband calls about the missing check. 519 00:36:24,940 --> 00:36:26,840 Rodriguez shrugs it off. 520 00:36:27,660 --> 00:36:32,480 Well, he told Javier that it was not carved in stone, the agreement, and that 521 00:36:32,480 --> 00:36:33,840 only made me furious. 522 00:36:34,860 --> 00:36:39,520 By October, the Giraldo's weekly payments have stopped coming altogether. 523 00:36:39,880 --> 00:36:42,500 But Rodriguez always has an excuse. 524 00:36:43,220 --> 00:36:48,060 He kept making promises, kept blaming the banks, kept blaming the fact that it 525 00:36:48,060 --> 00:36:51,040 was a holiday and the monies were just not coming in. 526 00:36:52,400 --> 00:36:57,500 Finally, at this strip mall in Key Biscayne, Geraldo draws the line. 527 00:36:58,940 --> 00:37:03,620 On October 27th, I was fed up with the runaround that Juan Carlos was giving 528 00:37:04,040 --> 00:37:09,180 So I gave him an ultimatum to meet me here at the bank at 11 a .m. with the 529 00:37:09,180 --> 00:37:12,420 amount that he owed me before I was going to the FBI. 530 00:37:13,660 --> 00:37:18,000 Next on American Greed, Rodriguez faces his best friends in court. 531 00:37:18,300 --> 00:37:23,500 He had a very cynical look. It was a look of I could care less. 532 00:37:34,860 --> 00:37:36,980 October 27, 2010. 533 00:37:37,740 --> 00:37:43,660 At a bank in Key Biscayne, Florida, Mildred Geraldo waits anxiously for Juan 534 00:37:43,660 --> 00:37:44,660 Carlos Rodriguez. 535 00:37:45,020 --> 00:37:47,940 He owes her more than $100 ,000. 536 00:37:48,900 --> 00:37:54,740 I waited for an hour inside the branch, and the person that I sat with felt 537 00:37:54,740 --> 00:37:58,600 really sorry for me because he could see the grief that I was experiencing while 538 00:37:58,600 --> 00:37:59,399 I was waiting. 539 00:37:59,400 --> 00:38:03,060 At noon, Rodriguez is officially a no -show. 540 00:38:03,580 --> 00:38:05,480 And Geraldo goes ballistic. 541 00:38:06,080 --> 00:38:10,980 I went completely crazy. I proceeded to report him to everyone I know. I called 542 00:38:10,980 --> 00:38:13,940 his office. I called everyone I could possibly call. 543 00:38:14,180 --> 00:38:16,960 And after that, I went directly to the FBI. 544 00:38:18,340 --> 00:38:22,280 Geraldo and her fellow investors flood the FBI with complaints. 545 00:38:22,760 --> 00:38:25,760 Special Agent Kate Cannon takes the case. 546 00:38:26,300 --> 00:38:30,560 From the very beginning, it was obvious that what Juan Carlos was offering was 547 00:38:30,560 --> 00:38:31,880 simply too good to be true. 548 00:38:33,040 --> 00:38:38,040 A 50 % rate of return in six months, no one can pay those kind of returns. 549 00:38:39,720 --> 00:38:45,500 Authorities find that since 2007, Rodriguez has taken in $5 million in 550 00:38:45,500 --> 00:38:51,140 investments. Close to $4 million was paid back to some of his 115 clients. 551 00:38:51,940 --> 00:38:53,160 The other million? 552 00:38:53,920 --> 00:38:58,740 There was no stable of cars, there was no private jets to Europe, but what you 553 00:38:58,740 --> 00:39:02,820 have here is someone living above his means and in a very good lifestyle. 554 00:39:04,840 --> 00:39:10,780 In March 2012, agents arrest Rodriguez and charge him with six counts of wire 555 00:39:10,780 --> 00:39:16,700 fraud. He pleads guilty to one count, and on September 7th, his victims 556 00:39:16,700 --> 00:39:18,940 in the courtroom for his sentencing hearing. 557 00:39:19,520 --> 00:39:24,530 When he walked... into that courtroom, he had a very cynical look. 558 00:39:25,070 --> 00:39:28,850 And it was a look of, I could care less. 559 00:39:30,130 --> 00:39:34,390 Rodriguez pleads to the judge that he can make his victims whole. 560 00:39:35,090 --> 00:39:37,330 Mr. Rodriguez believed he could always pay it back. 561 00:39:37,530 --> 00:39:41,650 He still believes he can pay it back. He asked the court to allow him to not be 562 00:39:41,650 --> 00:39:45,910 sentenced to jail at all so that he could work to pay back the investors the 563 00:39:45,910 --> 00:39:47,170 millions that they had lost. 564 00:39:48,520 --> 00:39:54,200 But then his longtime friend and employee, Araceli Valle, takes the 565 00:39:54,720 --> 00:39:59,360 She witnessed the scam up close, but had no idea what was happening. 566 00:39:59,880 --> 00:40:04,040 That just shows you how good he was at kind of hiding what was going on and who 567 00:40:04,040 --> 00:40:07,520 he truly was with his assistant who worked with him day in and day out, 568 00:40:07,520 --> 00:40:08,520 know what was going on. 569 00:40:10,220 --> 00:40:16,220 Instead, Rodriguez stole $85 ,000 from her while her husband was on his 570 00:40:16,220 --> 00:40:17,220 deathbed. 571 00:40:17,610 --> 00:40:19,410 Her testimony is damning. 572 00:40:19,650 --> 00:40:25,870 You got a guy with 20 years invested in a relationship with a married couple who 573 00:40:25,870 --> 00:40:31,810 looks a dying man in the eyes and the woman who he loves and professes that 574 00:40:31,810 --> 00:40:37,930 going to look after her and then the whole while knows that he has absolutely 575 00:40:37,930 --> 00:40:38,930 intention of doing that. 576 00:40:39,350 --> 00:40:43,950 The judge ultimately sentences Rodriguez to seven years. 577 00:40:44,410 --> 00:40:48,530 and he is ordered to pay back more than $1 million in stolen funds. 578 00:40:48,950 --> 00:40:53,950 The court has ordered that for as long as Mr. Rodriguez lives, 10 % of his 579 00:40:53,950 --> 00:40:58,070 income, in whatever form that is, needs to be paid back to the victim. So slowly 580 00:40:58,070 --> 00:41:00,070 but surely, money will accrue. 581 00:41:01,270 --> 00:41:07,410 Mildred Giraldo and her husband are out more than $100 ,000, almost half the 582 00:41:07,410 --> 00:41:09,230 proceeds from the sale of her business. 583 00:41:10,010 --> 00:41:13,370 This was a business that I built, and it was something that... 584 00:41:13,840 --> 00:41:18,400 I worked really hard at accomplishing. And this man just came and just wiped it 585 00:41:18,400 --> 00:41:19,400 out from under us. 586 00:41:21,260 --> 00:41:25,700 Mildred's husband, Javier, and the rest of the dudes still get together. 587 00:41:26,680 --> 00:41:29,520 But without their faithful leader, Rodriguez. 588 00:41:31,420 --> 00:41:32,920 He's the brother to Javier. 589 00:41:33,480 --> 00:41:37,120 So the ultimate betrayal was to my husband. And that, of course, makes me 590 00:41:37,120 --> 00:41:41,780 angry because there's no way that my husband does not feel responsible. 591 00:41:43,210 --> 00:41:44,210 For what has happened. 592 00:41:45,370 --> 00:41:50,110 Ophelia Mejia and her husband are out their $40 ,000 investment. 593 00:41:51,050 --> 00:41:55,610 But in 2011, they get another unpleasant surprise. 594 00:41:55,970 --> 00:42:01,130 An IRS bill for $25 ,000 in back taxes. 595 00:42:02,230 --> 00:42:04,850 Rodriguez's tax advice was a lie. 596 00:42:05,310 --> 00:42:07,130 This is the letter that states that. 597 00:42:07,710 --> 00:42:11,870 It actually reads, you did not place your funds into a recognizable financial 598 00:42:11,870 --> 00:42:12,870 institution. 599 00:42:15,770 --> 00:42:21,170 Mejia and her husband have to refinance their home to pay the unexpected bill. 600 00:42:21,390 --> 00:42:27,330 But again, it's the sense of betrayal by Juan Carlos Rodriguez that cuts 601 00:42:27,330 --> 00:42:28,330 deepest. 602 00:42:29,050 --> 00:42:34,870 Financially, thank God we have health, and we both have good jobs, so we will 603 00:42:34,870 --> 00:42:35,970 recuperate on that. 604 00:42:37,509 --> 00:42:41,250 Emotionally, I mean, this was a friend that we trusted. 605 00:42:41,810 --> 00:42:45,650 And for him to do this to us, it's really, really shameful. 606 00:42:47,710 --> 00:42:48,750 Very, very shameful.