1 00:00:02,280 --> 00:00:07,380 In this episode of American Greed, John and Dan Sullivan are more than loving 2 00:00:07,380 --> 00:00:10,740 brothers. They are partners in business and crime. 3 00:00:11,220 --> 00:00:14,000 They were good thieves, big liars and good thieves. 4 00:00:14,500 --> 00:00:18,700 Undercover of a home repair business, the Sullivans prey on victims based on 5 00:00:18,700 --> 00:00:19,820 race and age. 6 00:00:20,080 --> 00:00:24,260 They had catchphrases to describe who they were targeting. They said the 7 00:00:24,260 --> 00:00:25,660 the better, the older the better. 8 00:00:26,000 --> 00:00:29,840 To say how they viewed their targets was odious doesn't even begin to capture 9 00:00:29,840 --> 00:00:32,220 how morally bankrupt the Sullivans were. 10 00:00:32,420 --> 00:00:37,740 For 10 years, they construct a trail of ruin by stealing homes and abandoning 11 00:00:37,740 --> 00:00:40,140 projects until they get nailed. 12 00:00:40,980 --> 00:00:46,320 I told him that I don't know how long it's going to take, but I will never, 13 00:00:46,320 --> 00:00:48,140 give up. I will get you. 14 00:00:48,460 --> 00:00:49,560 And later... 15 00:00:49,930 --> 00:00:54,790 Joseph Greenblatt rips off $31 million from retirees who think he's flipping 16 00:00:54,790 --> 00:00:56,910 houses in New York's up -and -coming neighborhoods. 17 00:00:57,490 --> 00:01:01,370 You're talking about retirees who don't have other sources of income. 18 00:01:01,710 --> 00:01:04,970 In most cases, it wasn't discretionary income. 19 00:01:05,209 --> 00:01:07,350 It was income that they really needed. 20 00:01:07,650 --> 00:01:12,270 When this real estate scam collapses, the startling truth about Joseph 21 00:01:12,270 --> 00:01:14,930 Greenblatt's con game is pulled from the rubble. 22 00:01:15,240 --> 00:01:21,160 I have not encountered a case besides this one where investor money is being 23 00:01:21,160 --> 00:01:24,220 used to pay restitution from a prior criminal scheme. 24 00:01:24,420 --> 00:01:25,480 It was unusual. 25 00:01:38,080 --> 00:01:42,560 In 2002, America's real estate market is on fire. 26 00:01:43,360 --> 00:01:48,420 It is the era of the ninja loan, slang in the mortgage industry for no income, 27 00:01:48,700 --> 00:01:52,440 no job, no assets, no problem. 28 00:01:53,320 --> 00:01:58,360 The lenders were not really monitoring the lending. They would give a loan to 29 00:01:58,360 --> 00:01:59,360 anybody who had a pulse. 30 00:01:59,540 --> 00:02:01,840 If you could fog a mirror, you could get a loan. 31 00:02:02,060 --> 00:02:06,760 That easy money makes it a good time to be in the home repair and remodeling 32 00:02:06,760 --> 00:02:07,760 business. 33 00:02:08,000 --> 00:02:12,720 John Sullivan runs New Look Home Services out of a storefront office on 34 00:02:12,720 --> 00:02:14,140 Chicago's north side. 35 00:02:14,400 --> 00:02:19,560 His brother Daniel works for him. The two brothers target primarily older 36 00:02:19,560 --> 00:02:21,300 African -American homeowners. 37 00:02:22,200 --> 00:02:26,700 They did mass mailings to targeted zip codes on the south and west sides of 38 00:02:26,700 --> 00:02:30,920 Chicago. In addition to that, they did door -to -door canvassing. They hired 39 00:02:30,920 --> 00:02:35,220 people to walk door -to -door and leave flyers for them. Those flyers offered 40 00:02:35,220 --> 00:02:36,520 senior citizen discounts. 41 00:02:36,840 --> 00:02:38,760 They offered seasonal discounts. 42 00:02:40,380 --> 00:02:45,180 But once the Sullivans inspect a property, discounts go out the window. 43 00:02:45,680 --> 00:02:48,600 Their bids are often outrageously high. 44 00:02:49,200 --> 00:02:51,000 They would give an estimate. 45 00:02:51,720 --> 00:02:57,780 for an exorbitant remodeling job, knowing that the victim did not have the 46 00:02:57,780 --> 00:02:58,780 on hand to pay for that. 47 00:02:59,320 --> 00:03:03,900 But money is easy to come by in the freewheeling era of the ninja loan. 48 00:03:04,300 --> 00:03:07,720 The Sullivans basically went into their homes and tried to find out if they had 49 00:03:07,720 --> 00:03:10,620 equity in their home. They would get a blank contract. They would have somebody 50 00:03:10,620 --> 00:03:14,920 sign a blank contract. Then they would hook up with a mortgage broker to make a 51 00:03:14,920 --> 00:03:17,800 loan, and then they would make the contract in the exact amount that the 52 00:03:17,800 --> 00:03:18,800 would be. 53 00:03:19,070 --> 00:03:23,110 That's one of the ways they were able to maximize their take. 54 00:03:24,810 --> 00:03:29,170 Occasionally, they come across a customer with money in the bank. Like 55 00:03:29,170 --> 00:03:34,350 of this home, 98 -year -old Frances Stone, a retired schoolteacher with 56 00:03:34,350 --> 00:03:36,610 living on Chicago's West Side. 57 00:03:36,930 --> 00:03:43,290 In 2002, she hires new look after the Sullivans tell Stone her home needs 58 00:03:43,290 --> 00:03:46,010 hundreds of thousands of dollars worth of urgent repairs. 59 00:03:46,830 --> 00:03:51,090 She digs deep into her lifelong savings and gives the Sullivans more than $200 60 00:03:51,090 --> 00:03:53,170 ,000 to pay for the work. 61 00:03:53,770 --> 00:03:58,810 When the defendants ultimately stole the money from her, they literally had to 62 00:03:58,810 --> 00:04:03,730 hold her hand to affix her signature to the check to the Sullivans. 63 00:04:05,910 --> 00:04:11,630 The Cook County state's attorney catches wind of Sullivan's misdeeds. And in the 64 00:04:11,630 --> 00:04:12,950 summer of 2003... 65 00:04:13,630 --> 00:04:17,990 criminal charges are filed against John Sullivan for financially exploiting 66 00:04:17,990 --> 00:04:18,990 Frances Stone. 67 00:04:19,290 --> 00:04:23,310 At the same time, John Sullivan is also facing civil action. 68 00:04:23,670 --> 00:04:29,030 The city of Chicago has filed suit against John and New Look for scamming 69 00:04:29,030 --> 00:04:30,410 many as 58 homeowners. 70 00:04:30,870 --> 00:04:35,810 A preliminary injunction banned John Sullivan and New Look from doing 71 00:04:35,810 --> 00:04:36,749 in the city. 72 00:04:36,750 --> 00:04:41,670 So John Sullivan does what any good con man would do. He reorganizes. 73 00:04:42,540 --> 00:04:47,420 They moved their company from Chicago, where it had been historically based, to 74 00:04:47,420 --> 00:04:52,500 Niles, Illinois, literally 200 feet across the city of Chicago border. They 75 00:04:52,500 --> 00:04:55,720 incorporated there under a new name, J andD Home Services. 76 00:04:56,440 --> 00:05:01,740 Dan Sullivan is not a part of the city of Chicago's injunction, so John assumes 77 00:05:01,740 --> 00:05:06,060 his brother's identity when signing checks, work orders, and contracts. 78 00:05:07,500 --> 00:05:12,700 The Sullivans went so far to wipe out the name New Look Home Services and John 79 00:05:12,700 --> 00:05:17,300 Sullivan's names from existing contracts and replacing that with J andD Home 80 00:05:17,300 --> 00:05:21,660 Services, with Dan Sullivan's name, so that they could continue doing business 81 00:05:21,660 --> 00:05:24,140 in the city of Chicago, contrary to that injunction. 82 00:05:24,820 --> 00:05:27,280 J andD's new office is busy. 83 00:05:27,480 --> 00:05:32,320 The Sullivans use telemarketers who make cold calls from a front office in 84 00:05:32,320 --> 00:05:33,400 search of new clients. 85 00:05:34,080 --> 00:05:38,200 They obtained names, addresses, and phone numbers for people living in 86 00:05:38,200 --> 00:05:40,420 areas on the south and west sides of Chicago. 87 00:05:40,900 --> 00:05:46,060 And the Sullivans have a novel way of keeping their marketing costs as low as 88 00:05:46,060 --> 00:05:50,120 possible. The telemarketers that they hired, according to our investigation, 89 00:05:50,240 --> 00:05:54,840 came from a lot of halfway houses, people that were trying to get their 90 00:05:54,840 --> 00:05:55,840 back together. 91 00:05:56,240 --> 00:05:58,080 They would promise them cash bonuses. 92 00:05:58,560 --> 00:06:01,860 Our investigation revealed from sources that they would pay them actually in 93 00:06:01,860 --> 00:06:02,860 drugs. 94 00:06:03,120 --> 00:06:07,640 As soon as they start working for the Sullivans, the Sullivans are feeding 95 00:06:07,640 --> 00:06:11,100 drugs, making them dependent, and teaching them the trade. 96 00:06:11,860 --> 00:06:17,620 The sales reps are instructed how to target older African Americans, 97 00:06:17,620 --> 00:06:21,440 in Chicago's poorest communities on the south and west sides. 98 00:06:22,800 --> 00:06:25,840 Clementine Thacker steps right into their trap. 99 00:06:26,300 --> 00:06:27,660 They were tricksy. They were good. 100 00:06:27,900 --> 00:06:29,720 They were really, really good. 101 00:06:30,200 --> 00:06:32,680 They got a brain, but they're using it for the wrong reason. 102 00:06:33,820 --> 00:06:38,100 Thacker has lived in her home on Chicago's South Side since she and her 103 00:06:38,100 --> 00:06:39,740 husband bought it in 1953. 104 00:06:40,220 --> 00:06:43,520 The year President Dwight Eisenhower moves into the White House. 105 00:06:43,760 --> 00:06:46,480 And within 10 years, they pay off the house. 106 00:06:47,000 --> 00:06:50,560 Now, as a widow, Thacker struggles to survive on a fixed income. 107 00:06:51,160 --> 00:06:55,280 To bring in some extra cash, she wants to rent the second and third floor 108 00:06:55,280 --> 00:06:58,720 apartments. Boy, this is something else. What a mess. 109 00:06:59,390 --> 00:07:01,610 But the apartments need a lot of work. 110 00:07:02,030 --> 00:07:06,910 She decides to shop around for a contractor when someone shows up at her 111 00:07:07,990 --> 00:07:11,810 I got a knock on the door. The one I shouldn't have been at home. 112 00:07:12,910 --> 00:07:16,710 At her door is a salesman from J andD Home Services. 113 00:07:17,130 --> 00:07:22,310 He sells Thacker on a $63 ,000 renovation of the upstairs apartments. 114 00:07:23,030 --> 00:07:26,270 A lot of money for a retiree on a fixed income. 115 00:07:26,990 --> 00:07:30,610 Thacker wants to take out a personal loan to cover the renovation. 116 00:07:31,130 --> 00:07:35,150 But the Sullivan sales rep encourages her to tap into her home's equity. 117 00:07:35,830 --> 00:07:40,970 He came back by with a representative from the bank that said, oh, we can have 118 00:07:40,970 --> 00:07:42,570 this financed through this bank. 119 00:07:42,910 --> 00:07:48,090 The loan that I was interested in was not refinancing my house. It was just 120 00:07:48,090 --> 00:07:49,290 a regular loan. 121 00:07:50,350 --> 00:07:52,350 And they said they could do that. 122 00:07:53,130 --> 00:07:57,410 Thacker eventually signs for a loan, thinking it's the type of financing she 123 00:07:57,410 --> 00:07:58,410 originally wanted. 124 00:07:58,710 --> 00:08:02,830 I thought I was getting a regular loan, like you go to the bank and get a loan. 125 00:08:03,070 --> 00:08:07,090 And instead of a loan, they were refinancing my house. 126 00:08:08,150 --> 00:08:13,990 Now Thacker is saddled with a 15 -year, $63 ,000 mortgage she can't afford. 127 00:08:14,710 --> 00:08:16,310 They were good thieves. 128 00:08:16,830 --> 00:08:17,990 Big letters and good thieves. 129 00:08:18,530 --> 00:08:24,290 And it turns out, apartments she can't rent because J andD never completes the 130 00:08:24,290 --> 00:08:28,830 work. One of the phrases that the Sullivans used among themselves and with 131 00:08:28,830 --> 00:08:32,850 sales reps who were out in the field was one nail, no jail. And what they meant 132 00:08:32,850 --> 00:08:37,150 by that is if they did the bare minimum amount of work, the Sullivans believed 133 00:08:37,150 --> 00:08:41,150 that they wouldn't go to jail. They may get sued civilly, but they wouldn't have 134 00:08:41,150 --> 00:08:42,330 any criminal exposure. 135 00:08:43,070 --> 00:08:44,070 They were wrong. 136 00:08:44,330 --> 00:08:48,910 Next, the Sullivans con Clementine Thacker again to save their skins. 137 00:08:49,590 --> 00:08:51,090 I said, this doesn't sound right. 138 00:08:51,430 --> 00:08:53,910 He said, well, see, we're lawyers. We want to have something to go into court 139 00:08:53,910 --> 00:08:54,910 with. I said, okay. 140 00:08:55,290 --> 00:08:56,810 So I wrote it and signed it. 141 00:08:57,290 --> 00:09:01,030 And a new victim and a new, more personal strategy. 142 00:09:01,770 --> 00:09:05,590 I thought it was very strange that a 38 -year -old man was becoming friends with 143 00:09:05,590 --> 00:09:06,630 an 80 -year -old woman. 144 00:09:16,620 --> 00:09:21,380 For more than 40 years, Clementine Thacker has been living in her Chicago 145 00:09:21,600 --> 00:09:26,880 mortgage -free until she hires J andD Home Services to renovate her two upstairs 146 00:09:26,880 --> 00:09:27,880 rental apartment. 147 00:09:28,520 --> 00:09:34,440 They convinced her to take the equity out of her home through a loan, and they 148 00:09:34,440 --> 00:09:39,400 then stole that equity, did very little, if any, work on rehabbing her home, and 149 00:09:39,400 --> 00:09:43,800 then left Ms. Thacker with a monthly loan payment of over $500. 150 00:09:45,000 --> 00:09:47,920 They start but don't finish a painting job. 151 00:09:48,320 --> 00:09:53,940 They try to fix up a bathroom and make a lame attempt at installing a banister. 152 00:09:54,680 --> 00:09:56,700 The banister was a joke. 153 00:09:57,480 --> 00:10:04,480 Any person with common sense would know you've got to find a stud 154 00:10:04,480 --> 00:10:09,760 or something that's solid wood to not pull into a wall. You don't just hit it 155 00:10:09,760 --> 00:10:10,760 into plaster. 156 00:10:11,280 --> 00:10:12,700 But the work stops. 157 00:10:13,600 --> 00:10:15,160 And Thacker wants answers. 158 00:10:16,200 --> 00:10:20,460 That's when I start calling. When are the people coming to, you know, do the 159 00:10:20,460 --> 00:10:21,460 work up there? 160 00:10:21,880 --> 00:10:23,020 She gets nowhere. 161 00:10:24,140 --> 00:10:28,560 So Thacker hires a law firm and files a civil suit against the Sullivans and 162 00:10:28,560 --> 00:10:29,740 their company J andD. 163 00:10:30,700 --> 00:10:33,460 As the case progresses, she gets a call. 164 00:10:33,900 --> 00:10:38,060 Someone claiming to be from her law firm wants to come by to see her. 165 00:10:38,480 --> 00:10:41,480 I did have two people come out when they were from... 166 00:10:42,540 --> 00:10:45,660 They said they were from the law offices. 167 00:10:46,440 --> 00:10:49,580 The two men say they need an affidavit from Thacker. 168 00:10:50,320 --> 00:10:54,640 They dictate a statement to her, placing the blame for the fraudulent home loan 169 00:10:54,640 --> 00:10:56,360 on others and not the Sullivan. 170 00:10:57,000 --> 00:10:58,080 Thacker is confused. 171 00:10:59,100 --> 00:11:00,560 I said, this doesn't sound right. 172 00:11:00,880 --> 00:11:03,380 He said, well, see, we're lawyers. We want to have something to go into court 173 00:11:03,380 --> 00:11:06,820 with. I said, but you don't have to have that to go into court with, do you? 174 00:11:07,380 --> 00:11:08,500 Yeah, we need this. 175 00:11:08,780 --> 00:11:09,780 I said, okay. 176 00:11:10,340 --> 00:11:12,220 So I wrote it and signed it, you know. 177 00:11:13,150 --> 00:11:18,550 But the feds say the two men posing as lawyers are actually John and Dan 178 00:11:18,550 --> 00:11:25,130 Sullivan. The purpose of dictating that letter was to shift responsibility from 179 00:11:25,130 --> 00:11:29,550 the Sullivans to someone else. They were trying to get away with it. They were 180 00:11:29,550 --> 00:11:34,870 trying to win their civil suit. And that was a practice and pattern that the 181 00:11:34,870 --> 00:11:38,430 Sullivans had done throughout their various schemes. 182 00:11:39,760 --> 00:11:43,400 And for John and Dan Sullivan, crime pays well. 183 00:11:44,060 --> 00:11:47,940 We were able to trace a substantial amount of money, hundreds of thousands 184 00:11:47,940 --> 00:11:53,140 dollars, to a trust that John Sullivan and Dan Sullivan had set up in the name 185 00:11:53,140 --> 00:11:54,500 of Joseph John Sullivan. 186 00:11:54,820 --> 00:11:59,280 They certainly had hundreds of thousands, if not millions of dollars, 187 00:11:59,280 --> 00:12:02,180 bank accounts, in trusts, in real estate that they bought. 188 00:12:03,280 --> 00:12:07,260 By the looks of the real estate they own, John and Dan Sullivan appear to be 189 00:12:07,260 --> 00:12:09,560 just a couple of average middle -class guys. 190 00:12:10,120 --> 00:12:11,680 But they are anything but. 191 00:12:12,160 --> 00:12:17,020 Over the years, they sock away their earnings and build a financial empire 192 00:12:17,020 --> 00:12:19,180 the hard work of their chosen victims. 193 00:12:19,840 --> 00:12:22,800 They had catchphrases to describe who they were targeting. 194 00:12:23,000 --> 00:12:25,620 They said, the blacker, the better. The older, the better. 195 00:12:26,200 --> 00:12:30,200 To say that their targets and how they viewed those people was odious, it 196 00:12:30,200 --> 00:12:34,280 doesn't even begin to capture how morally bankrupt the Sullivans were. 197 00:12:34,280 --> 00:12:39,060 would do any means necessary, use anyone necessary to get what they ultimately 198 00:12:39,060 --> 00:12:43,920 wanted, which was money. They put in a lot of work in trying to find those that 199 00:12:43,920 --> 00:12:48,260 they could exploit and could victimize. That was their main job. It wasn't 200 00:12:48,260 --> 00:12:50,440 remodeling. It was trying to find potential victims. 201 00:12:51,230 --> 00:12:55,250 In 2003, the Sullivan brothers spot a new opportunity. 202 00:12:56,110 --> 00:13:01,610 In the Chicago neighborhood of Norwood Park, 81 -year -old Frances Spinks is 203 00:13:01,610 --> 00:13:05,650 living out her golden years in her five -bedroom century -old home. 204 00:13:06,380 --> 00:13:10,540 Roxanne Sarno is Spinks' niece and looks after her Aunt Frances. 205 00:13:10,800 --> 00:13:12,180 This is Aunt Frances' communion. 206 00:13:12,720 --> 00:13:17,280 Sarno says her aunt wants to unload a mobile home she owns in Florida. 207 00:13:17,800 --> 00:13:22,260 She decided she was going to sell it because she was getting too old to 208 00:13:22,640 --> 00:13:25,920 She put an ad in the Norwood Park and the Chicago paper. 209 00:13:26,420 --> 00:13:30,380 That's how she became familiar with the Sullivan brothers. 210 00:13:31,540 --> 00:13:34,780 John Sullivan responds to Spinks' ad. 211 00:13:35,720 --> 00:13:39,760 John Sullivan told Anne Francis she was asking him too much money and that she 212 00:13:39,760 --> 00:13:41,660 would never get that, the asking price. 213 00:13:42,860 --> 00:13:45,400 No sale, but they stay in touch. 214 00:13:45,780 --> 00:13:48,400 John introduces Spinks to his brother Dan. 215 00:13:48,980 --> 00:13:54,480 Dan starts coming by the house regularly to visit Spinks, a cancer survivor who 216 00:13:54,480 --> 00:13:56,840 is now diabetic and in failing health. 217 00:13:57,440 --> 00:14:01,780 The front door was always open because he could not get up to answer the door. 218 00:14:01,900 --> 00:14:03,060 And Daniel... 219 00:14:03,600 --> 00:14:05,380 was prominent at the house. 220 00:14:05,600 --> 00:14:09,500 He would come over and let the dog out and visit her. 221 00:14:09,920 --> 00:14:13,880 I thought it was very strange that a 38 -year -old man was becoming friends with 222 00:14:13,880 --> 00:14:16,560 an 80 -year -old woman and that he was up to something. 223 00:14:17,300 --> 00:14:22,100 All the sweet talk helped Sullivan to discover that Spinks owns her home 224 00:14:22,100 --> 00:14:26,020 outright. The brothers find it pays to turn up the charm. 225 00:14:26,560 --> 00:14:30,580 That was one of their best skills, was trying to build relationships with their 226 00:14:30,580 --> 00:14:31,559 potential victims. 227 00:14:31,560 --> 00:14:35,380 They were just setting them up so they could take advantage of them later 228 00:14:35,380 --> 00:14:36,380 these fraudulent practices. 229 00:14:37,720 --> 00:14:42,440 Daniel Sullivan seizes the opportunity when Spinks tells him of an ongoing 230 00:14:42,440 --> 00:14:45,080 dispute she has with the city of Chicago. 231 00:14:45,960 --> 00:14:51,140 The sewer system in Norwood Park is not the best, and when it rains, sometimes 232 00:14:51,140 --> 00:14:52,620 the basements get flooded. 233 00:14:53,420 --> 00:14:56,760 Dan Sullivan says he can help her fight City Hall. 234 00:14:57,060 --> 00:14:59,840 He just needs Spinks to sign some papers. 235 00:15:00,380 --> 00:15:03,300 She told me that she had signed papers. 236 00:15:04,000 --> 00:15:08,460 And I yelled at her and made her cry. 237 00:15:08,960 --> 00:15:11,960 And she didn't have a copy of what she signed. 238 00:15:12,460 --> 00:15:14,740 So I had no idea what she signed. 239 00:15:15,580 --> 00:15:18,800 It remains a mystery until February 2004. 240 00:15:20,000 --> 00:15:23,700 when Frances Spinks takes a turn for the worse and has to be hospitalized. 241 00:15:25,420 --> 00:15:27,440 Sarno keeps an eye on her home. 242 00:15:28,320 --> 00:15:34,200 I was going to the house like usual and started cleaning the house because I 243 00:15:34,200 --> 00:15:36,220 wanted to bring her home to die. 244 00:15:37,040 --> 00:15:41,560 I started seeing mail addressed to Daniel with Aunt Frances' address. 245 00:15:42,760 --> 00:15:44,380 I got a sick feeling. 246 00:15:45,439 --> 00:15:49,780 Fearing the worst, she asks her attorney to do a title check on the home. 247 00:15:50,260 --> 00:15:53,800 He called me at work and told me that Daniel owned the house. 248 00:15:54,220 --> 00:15:59,720 It turns out what Frances Spinks signed was a quick claim deed, turning over 249 00:15:59,720 --> 00:16:01,680 ownership of her home to Daniel Sullivan. 250 00:16:02,240 --> 00:16:07,620 But if his plan is to keep the property transfer a secret until Spinks dies, the 251 00:16:07,620 --> 00:16:08,620 scheme has failed. 252 00:16:09,360 --> 00:16:10,640 Sarno knows everything. 253 00:16:11,980 --> 00:16:15,840 When I went to the hospital, I said, did you give Daniel Sullivan your house? 254 00:16:16,140 --> 00:16:17,160 And she said, no. 255 00:16:17,380 --> 00:16:18,680 I said, are you sure? 256 00:16:18,920 --> 00:16:20,200 And she said, no. 257 00:16:20,680 --> 00:16:23,940 I said, he owns your house. 258 00:16:24,540 --> 00:16:27,740 Do you want me to fight for your house? And she said, yes. 259 00:16:28,180 --> 00:16:34,520 I called Daniel on his cell phone and told him that I knew what you did. 260 00:16:35,020 --> 00:16:39,620 I don't know how long it's going to take or how much money, but I will never, 261 00:16:39,640 --> 00:16:40,800 ever give up. 262 00:16:41,130 --> 00:16:42,130 I will get you. 263 00:16:42,990 --> 00:16:47,590 Next on American Greed, the investigation takes a tragic turn. 264 00:16:48,170 --> 00:16:52,470 There's a caller on 911 stating that a 14 -year -old boy had been shot in his 265 00:16:52,470 --> 00:16:57,510 house. And later, will another desperate call stop John Sullivan for good? 266 00:16:57,910 --> 00:17:00,550 He called 911 and he wanted a police officer to shoot him. 267 00:17:11,339 --> 00:17:16,880 In early 2004, Roxanne Sarno gets an upsetting phone call from her attorney. 268 00:17:17,220 --> 00:17:21,540 When I got this phone call, I was hysterical. 269 00:17:22,839 --> 00:17:28,200 She learns that Dan Sullivan's name is recorded on the title of a home 270 00:17:28,200 --> 00:17:30,540 to her aunt, Frances Spinks. 271 00:17:31,480 --> 00:17:36,360 I was hurt that somebody did this to my aunt, and then I was mad. 272 00:17:36,840 --> 00:17:40,280 And I knew I had to do something. I could not just sit by. 273 00:17:40,490 --> 00:17:44,170 and watch this man steal everything my aunt had. 274 00:17:45,590 --> 00:17:50,610 Sarno immediately files legal documents to keep Sullivan from selling her aunt's 275 00:17:50,610 --> 00:17:51,610 home. 276 00:17:51,770 --> 00:17:54,150 But Dan Sullivan is one step ahead. 277 00:17:54,370 --> 00:17:58,290 He's already converting his newly acquired property into cash. 278 00:17:59,070 --> 00:18:03,150 He went to World Savings Bank and took a mortgage for $200 ,000. 279 00:18:03,560 --> 00:18:10,440 And then he remortgaged it for another $400 ,000, I think. Then remortgaged it 280 00:18:10,440 --> 00:18:13,320 third time. He sucked the life out of the house. 281 00:18:14,240 --> 00:18:18,380 In June 2004, Frances Spinks died. 282 00:18:19,320 --> 00:18:25,800 She had to lay there with a respirator and a feeding tube, dying, knowing that 283 00:18:25,800 --> 00:18:31,140 her legacy, everything she wanted to leave her family that she worked hard 284 00:18:31,260 --> 00:18:32,260 was gone. 285 00:18:32,730 --> 00:18:34,070 She looked so happy there. 286 00:18:34,330 --> 00:18:35,630 I think it broke her heart. 287 00:18:35,930 --> 00:18:41,290 When you think someone's your friend, and then you find out not only are they 288 00:18:41,290 --> 00:18:45,610 your friend, but they've taken everything that you have, it broke her 289 00:18:46,990 --> 00:18:49,370 Eventually, the house goes into foreclosure. 290 00:18:49,750 --> 00:18:53,770 Because she had filed liens on the property, Sarna was able to reach a 291 00:18:53,770 --> 00:18:57,450 settlement with the bank, but it doesn't come close to the home's value. 292 00:18:58,120 --> 00:19:03,180 The plan was when Aunt Frances passed away, I would sell the house, fulfill 293 00:19:03,180 --> 00:19:08,820 will, and all the monies left would be a college fund. So my great nieces are 294 00:19:08,820 --> 00:19:13,440 cheated out of their college funds because this man was greedy and took 295 00:19:13,440 --> 00:19:14,860 everything she had. 296 00:19:15,600 --> 00:19:19,860 For nearly 10 years, the Sullivan brothers have preyed upon the powerless, 297 00:19:20,140 --> 00:19:22,480 leaving a swath of financial ruin. 298 00:19:23,320 --> 00:19:27,680 They've been able to avoid jail by always staying one step ahead of law 299 00:19:27,680 --> 00:19:28,680 enforcement. 300 00:19:29,240 --> 00:19:34,620 Each time that they were sued, each time that a governmental agency brought an 301 00:19:34,620 --> 00:19:38,380 action against them, they were able to delay, they were able to postpone, and 302 00:19:38,380 --> 00:19:41,780 they never went to jail until we came in and did it. 303 00:19:42,500 --> 00:19:43,760 In 2006, 304 00:19:44,460 --> 00:19:48,640 Assistant U .S. Attorney Patrick Pope begins investigating the Sullivan 305 00:19:48,640 --> 00:19:51,740 and brings in the U .S. Postal Inspection Service. 306 00:19:52,520 --> 00:19:57,560 Federal investigators look closely at the way J andD is coercing homeowners into 307 00:19:57,560 --> 00:20:02,540 refinancing their homes, and they discover one of the secrets to the 308 00:20:02,600 --> 00:20:03,600 success. 309 00:20:04,080 --> 00:20:08,760 As anyone who's ever done a mortgage or a closing knows, you sign an initial, 310 00:20:08,960 --> 00:20:10,080 numerous documents. 311 00:20:10,440 --> 00:20:12,660 You don't read them all at the closing. 312 00:20:13,240 --> 00:20:18,000 Once the Sullivans have the homeowners' trust, they can get them to sign 313 00:20:18,000 --> 00:20:19,280 whatever they want. 314 00:20:19,980 --> 00:20:22,420 That's what happens to Clementine Thacker. 315 00:20:23,060 --> 00:20:27,800 In this instance, they had Clementine Thacker and other homeowners sign 316 00:20:27,800 --> 00:20:34,440 of direction directing the bank, the mortgage company, to send the check, the 317 00:20:34,440 --> 00:20:38,160 equity that came out of that house, directly to J andD Home Services. 318 00:20:38,960 --> 00:20:43,140 So the proceeds from Thacker's loan never even see her bank account. 319 00:20:43,560 --> 00:20:47,580 Oh, I was feeling like I had S -P -U -P -I -D written on my forehead. 320 00:20:48,460 --> 00:20:49,940 It's just how I felt, you know. 321 00:20:50,700 --> 00:20:56,120 John Sullivan relocates to Surprise, Arizona, a suburb of Phoenix, as 322 00:20:56,120 --> 00:20:57,820 investigators are closing in. 323 00:20:58,480 --> 00:21:03,080 John knew that we were investigating him and his brother and his company for 324 00:21:03,080 --> 00:21:05,580 these fraudulent activities, and we were getting close. 325 00:21:07,180 --> 00:21:11,720 He divorces his wife but continues to live with her and their teenage son in 326 00:21:11,720 --> 00:21:12,720 this house. 327 00:21:13,240 --> 00:21:16,040 Investigators suspect that the divorce is a sham. 328 00:21:16,640 --> 00:21:18,340 designed to protect Sullivan's assets. 329 00:21:18,860 --> 00:21:23,520 Their life in Arizona seems relatively quiet until the afternoon of September 330 00:21:23,520 --> 00:21:25,000 16, 2010. 331 00:21:25,980 --> 00:21:30,480 There's a caller on 911 stating that a 14 -year -old boy had been shot in his 332 00:21:30,480 --> 00:21:33,420 house and he needed fire and police right away. 333 00:21:34,140 --> 00:21:36,200 The caller is John Sullivan. 334 00:21:37,320 --> 00:21:42,100 Sullivan's 14 -year -old son has shot and killed his friend while waving 335 00:21:42,100 --> 00:21:45,000 a loaded .22 caliber semi -automatic pistol. 336 00:21:45,960 --> 00:21:50,880 Local police, including Detective John Bantz, want to know from Sullivan what 337 00:21:50,880 --> 00:21:56,740 happened. John was contacted in the garage when police arrived, and he kept 338 00:21:56,740 --> 00:21:59,840 making statements. It was an accident. It was an accident, talking about the 339 00:21:59,840 --> 00:22:00,840 shooting. 340 00:22:01,140 --> 00:22:03,340 Police execute a search warrant. 341 00:22:03,620 --> 00:22:07,660 Our warrant was centered on the shooting incident. 342 00:22:08,400 --> 00:22:12,320 We got into the house, and we found that. 343 00:22:12,640 --> 00:22:15,980 22 caliber handgun right away. We also found some marijuana. 344 00:22:16,540 --> 00:22:20,380 We also found that there were numerous locked boxes. 345 00:22:20,760 --> 00:22:26,000 There's a large safe in John Sullivan's closet that was locked. 346 00:22:26,920 --> 00:22:31,900 Police execute a second search warrant and begin to uncover evidence of another 347 00:22:31,900 --> 00:22:32,900 crime. 348 00:22:33,200 --> 00:22:38,840 When we opened that safe, my first impression was, I have bricks of 349 00:22:38,840 --> 00:22:39,679 bricks of drugs. 350 00:22:39,680 --> 00:22:41,200 That's what it looked like to me. 351 00:22:41,610 --> 00:22:47,190 When American Greed returns, see what Arizona police find in John Sullivan's 352 00:22:47,190 --> 00:22:51,710 safe. What was the common lie that Sullivan used to secure bank loans? 353 00:22:51,970 --> 00:22:56,190 Find out at AmericanGreed .CNBC .com. We'll be right back. 354 00:23:02,010 --> 00:23:06,930 In Surprise, Arizona, the tragic shooting of a teenager has pulled back 355 00:23:06,930 --> 00:23:08,230 cover on another crime. 356 00:23:08,870 --> 00:23:09,870 John Sullivan. 357 00:23:10,300 --> 00:23:15,940 Under investigation in Chicago and accused of fraud as a stash of marijuana 358 00:23:15,940 --> 00:23:16,940 a locked safe. 359 00:23:17,380 --> 00:23:19,480 Police want to know what's inside. 360 00:23:20,320 --> 00:23:25,580 When we opened that safe, my first impression was, I have bricks of 361 00:23:25,860 --> 00:23:29,160 It's only after we started to pull it out that we realized, no, this was cash. 362 00:23:29,920 --> 00:23:31,340 And a lot of cash. 363 00:23:31,700 --> 00:23:33,720 In total, $550 ,000. 364 00:23:35,050 --> 00:23:39,370 Police are shocked not only at the large amount of loot, but also the way it is 365 00:23:39,370 --> 00:23:40,370 contained. 366 00:23:40,810 --> 00:23:45,270 It had been wrapped in tinfoil and had dirt on it, as if it at some point had 367 00:23:45,270 --> 00:23:46,270 been buried in the ground. 368 00:23:46,410 --> 00:23:48,590 It was a significant amount of money to discover. 369 00:23:48,910 --> 00:23:54,470 Our experience has shown us that in these type of fraud schemes and 370 00:23:54,590 --> 00:23:57,650 the money usually does not stay around very long. 371 00:23:58,370 --> 00:24:02,390 Surprise police seize the cash and begin to dig through Sullivan's financial 372 00:24:02,390 --> 00:24:07,800 records. They see that there is more money hidden, but not in a safe, rather 373 00:24:07,800 --> 00:24:11,380 an account called the Joseph John Sullivan Revocable Trust. 374 00:24:12,140 --> 00:24:18,780 We wrote a warrant and had it granted, and we ended up seizing just over $1 .1 375 00:24:18,780 --> 00:24:23,340 million out of this bank account that was in this trust's name. 376 00:24:23,880 --> 00:24:29,100 Arizona detectives pieced together a financial paper trail and traced much of 377 00:24:29,100 --> 00:24:31,480 the money back to the Sullivan Chicago victim. 378 00:24:32,639 --> 00:24:37,180 Just two weeks later, in Chicago, the U .S. Attorney's Office indicts the 379 00:24:37,180 --> 00:24:41,440 Sullivans on charges of wire fraud, and warrants are issued for their arrest. 380 00:24:42,980 --> 00:24:47,800 John Sullivan, still living in Surprise, Arizona, becomes unhinged and makes a 381 00:24:47,800 --> 00:24:48,800 desperate call. 382 00:24:49,140 --> 00:24:53,040 He called 911 after he learned that there was an arrest warrant out for him 383 00:24:53,040 --> 00:24:56,340 said that he wanted to be taken into custody and he wanted a police officer 384 00:24:56,340 --> 00:24:57,340 shoot him. 385 00:24:57,680 --> 00:25:02,140 Sullivan refuses to give his location, sending Maricopa County Sheriff's 386 00:25:02,140 --> 00:25:04,160 deputies on a day -long search for him. 387 00:25:05,160 --> 00:25:10,420 They finally track him down at Tequila Willie's, a bar in nearby Youngtown, 388 00:25:10,500 --> 00:25:14,780 Arizona. When authorities arrive, he denies he's John Sullivan. 389 00:25:15,180 --> 00:25:19,580 So he went from a period of come and find me to I'm not who you think I am. 390 00:25:20,440 --> 00:25:26,140 John Sullivan makes a return trip to Chicago, this time as an accused felon 391 00:25:26,140 --> 00:25:27,140 cuffs. 392 00:25:27,790 --> 00:25:31,670 Dan Sullivan, under surveillance by federal agents outside his home in 393 00:25:31,670 --> 00:25:35,090 Chicago, is arrested while pulling out of his driveway. 394 00:25:36,190 --> 00:25:40,030 The brothers are jailed and remain there until their trial. 395 00:25:40,850 --> 00:25:45,170 Meanwhile, the Sullivans' victims and their families try to salvage their 396 00:25:45,170 --> 00:25:50,290 from the wreckage. Now in her mid -80s, Clementine Thacker is making purses and 397 00:25:50,290 --> 00:25:54,410 other crafts and selling them at her church to make enough money to survive. 398 00:25:55,180 --> 00:25:59,420 During that time when the Sullivans had stolen her equity, had stolen her 399 00:25:59,420 --> 00:26:04,980 ability to live her life, frankly, her brother passed, her sister passed, and 400 00:26:04,980 --> 00:26:10,000 her nieces and nephews grew up without her being able to travel to see them, 401 00:26:10,000 --> 00:26:11,860 as a result of what the Sullivans did to her. 402 00:26:14,360 --> 00:26:19,760 And remember the century -old home that Dan Sullivan stole from Frances Fink? 403 00:26:20,560 --> 00:26:24,820 On January 18, 2007, the house is destroyed by fire. 404 00:26:25,100 --> 00:26:28,220 An investigation confirms it is arson. 405 00:26:29,080 --> 00:26:33,580 Dan Sullivan makes a brazen attempt to get a payout from the insurance company. 406 00:26:33,800 --> 00:26:38,420 But when it is discovered that the fire was intentionally set, the claim is 407 00:26:38,420 --> 00:26:41,040 denied. No one has yet to be charged. 408 00:26:41,700 --> 00:26:46,820 In October 2011, the federal criminal case against the Sullivans goes to trial 409 00:26:46,820 --> 00:26:48,140 in downtown Chicago. 410 00:26:49,070 --> 00:26:51,870 Each man is facing two counts of wire fraud. 411 00:26:52,310 --> 00:26:56,590 In their defense, the Sullivans claim that they completed the work they 412 00:26:56,590 --> 00:26:57,590 promised. 413 00:26:58,190 --> 00:27:02,050 Ultimately, we proved overwhelmingly that they did not. The jury saw through 414 00:27:02,050 --> 00:27:05,110 their defense, saw through their fraud, and convicted them. 415 00:27:05,670 --> 00:27:10,730 On November 9, 2011, the Sullivans are found guilty of wire fraud. 416 00:27:11,170 --> 00:27:14,230 They are later sentenced to 14 years in prison. 417 00:27:15,040 --> 00:27:19,780 They are also ordered to pay more than $700 ,000 in restitution to their 418 00:27:21,140 --> 00:27:25,960 Daniel Sullivan did not respond to our request for an interview, but in a 419 00:27:25,960 --> 00:27:30,420 written statement to American Greed from prison, John Sullivan maintains his 420 00:27:30,420 --> 00:27:35,380 innocence, writing, No wire fraud was committed. I might have to live with 421 00:27:35,380 --> 00:27:38,960 charge forever, but there was no wire fraud committed by me. 422 00:27:40,480 --> 00:27:43,440 People are defined by who they are and what they do. 423 00:27:44,200 --> 00:27:49,160 And in this case, what the evidence showed was that the Sullivans were 424 00:27:49,160 --> 00:27:54,680 serial fraudsters who preyed upon vulnerable victims with a callous 425 00:27:54,680 --> 00:27:56,240 to the lives they ruined. 426 00:27:57,520 --> 00:28:02,720 Next on American Greed, a New York real estate con man gets caught once. 427 00:28:02,980 --> 00:28:08,260 The Greenblatt's created a Ponzi scheme, which was successfully disguised as 428 00:28:08,260 --> 00:28:10,040 long as the checks were coming. 429 00:28:10,640 --> 00:28:15,480 Then gets caught again a decade later in a $31 million scam. 430 00:28:16,020 --> 00:28:19,680 We went out of town, created a whole fiction. It was a sophisticated, 431 00:28:20,000 --> 00:28:23,880 purposeful, very harmful criminal enterprise. 432 00:28:24,580 --> 00:28:27,080 Want inside information from the show? 433 00:28:27,320 --> 00:28:29,420 Join the Greed Social Network. 434 00:28:29,840 --> 00:28:32,420 Like us on American Greed's Facebook page. 435 00:28:32,720 --> 00:28:33,720 We'll be right back. 436 00:28:40,110 --> 00:28:42,410 Brooklyn, New York, June 1995. 437 00:28:43,990 --> 00:28:49,070 A local real estate investment company, Executive Funding, is suddenly shut down 438 00:28:49,070 --> 00:28:50,430 by the Brooklyn District Attorney. 439 00:28:51,370 --> 00:28:55,530 Executive Funding's owners, including Joseph Greenblatt, are arrested. 440 00:28:55,870 --> 00:28:57,290 It's all over the news. 441 00:28:57,750 --> 00:29:01,150 The doors to the Greenblatt's Executive Funding Corporation here in Borough Park 442 00:29:01,150 --> 00:29:02,250 were gated shut today. 443 00:29:02,710 --> 00:29:07,390 Joe Greenblatt is accused of swindling clients and investors of his mortgage 444 00:29:07,390 --> 00:29:09,210 brokering firm out of millions. 445 00:29:10,110 --> 00:29:15,810 Greenblatt created a Ponzi scheme, which was successfully disguised as long as 446 00:29:15,810 --> 00:29:20,490 the checks were coming. The checks come from investors who think executive 447 00:29:20,490 --> 00:29:24,410 funding is financing high interest mortgages for people who can't get 448 00:29:24,410 --> 00:29:25,490 conventional loans. 449 00:29:25,870 --> 00:29:31,850 Mr. Greenblatt promised his investors that he was going to acquire properties 450 00:29:31,850 --> 00:29:37,030 make certain mortgages. He took money and he didn't actually do with it what 451 00:29:37,030 --> 00:29:39,730 had. advise the investors that he was going to do. 452 00:29:40,750 --> 00:29:43,330 Kings County Supreme Court in Brooklyn. 453 00:29:43,810 --> 00:29:48,770 Joe Greenblatt pleads guilty to 94 counts of grand larceny and other 454 00:29:49,310 --> 00:29:52,430 But at sentencing, he catches a major break. 455 00:29:52,670 --> 00:29:57,130 In a plea deal, Joe Greenblatt, facing up to four and a half years behind bars, 456 00:29:57,410 --> 00:29:59,310 walked. No jail time. 457 00:29:59,690 --> 00:30:04,150 The judge allows him to remain free under the supervision of the court so he 458 00:30:04,150 --> 00:30:06,490 earn $5 million to pay back his victim. 459 00:30:07,760 --> 00:30:13,120 But the judge makes it clear, if he fails to make restitution, he'll go to 460 00:30:14,520 --> 00:30:18,580 The Brooklyn case shows what you can do if you have the right attorney. 461 00:30:18,940 --> 00:30:23,900 Benjamin Brofman, who has been the attorney for a lot of celebrities, he 462 00:30:23,900 --> 00:30:30,860 arranged a plea deal that would allow Greenblatt to take time to raise 463 00:30:30,860 --> 00:30:34,480 money to pay back the investors who were defrauded. 464 00:30:35,630 --> 00:30:40,590 With a $5 million debt hanging over his head, Joe Greenblatt, now a convicted 465 00:30:40,590 --> 00:30:45,050 con artist, has to figure out how to make money, and a lot of it. 466 00:30:46,130 --> 00:30:50,030 So he packs up, moves, and launches a new company. 467 00:30:50,790 --> 00:30:55,810 Joseph left Brooklyn, crossed the East River, went across Manhattan, jumped the 468 00:30:55,810 --> 00:31:00,550 Hudson, and went to New Jersey, where he started Maywood Capital Corp. 469 00:31:01,000 --> 00:31:06,020 Maywood Capital is just another clever ruse to get the cash Greenblatt needs, 470 00:31:06,400 --> 00:31:11,240 this time from a new set of victims, retirees in Florida. 471 00:31:13,000 --> 00:31:18,360 Carter Blunden retired to Bradenton, Florida, so he could enjoy the sunshine 472 00:31:18,360 --> 00:31:20,460 playing music alongside his wife, Claire. 473 00:31:21,620 --> 00:31:24,000 I've played the harmonica for 70 years. 474 00:31:24,340 --> 00:31:25,380 These are all my friends. 475 00:31:25,600 --> 00:31:28,520 I'm a vocalist, big band singer from way back. 476 00:31:29,550 --> 00:31:34,690 London has always been frugal and invested his savings when he worked as a 477 00:31:34,690 --> 00:31:39,310 hospital supply salesman. So when an ad for Maywood Capital appears in the 478 00:31:39,310 --> 00:31:44,950 Bradenton Herald offering 14 % investment returns, it catches London's 479 00:31:45,170 --> 00:31:47,110 He calls the number in the ad. 480 00:31:47,490 --> 00:31:52,190 Joseph Greenblatt answers and arranges for the two to meet in Sarasota. 481 00:31:53,260 --> 00:31:58,780 I met him at Yoder's restaurant down in Sarasota, and we talked, and he told me 482 00:31:58,780 --> 00:32:03,500 how good an investment he had and how safe it was. And so I thought, well, 483 00:32:03,500 --> 00:32:04,359 sounds good. 484 00:32:04,360 --> 00:32:06,440 So I go and invest with him. 485 00:32:07,820 --> 00:32:12,380 Greenblatt tells Blunden and other investors that he's buying run -down 486 00:32:12,380 --> 00:32:16,900 in need of renovation in New York's burgeoning neighborhoods like the Bronx, 487 00:32:17,160 --> 00:32:18,820 Queens, Brooklyn, and Harlem. 488 00:32:19,580 --> 00:32:25,360 In late 2001, Blunden withdraws money from an IRA to make his first investment 489 00:32:25,360 --> 00:32:26,360 with Maywood Capital. 490 00:32:27,040 --> 00:32:33,040 He gives Greenblatt $25 ,000 to invest in a two -story brick duplex in 491 00:32:34,000 --> 00:32:40,380 Just a month later, he ups the ante and invests another $75 ,000, this time for 492 00:32:40,380 --> 00:32:41,900 a commercial property in Queens. 493 00:32:42,540 --> 00:32:45,720 I'd already gotten one big return on an interest payment. 494 00:32:46,280 --> 00:32:50,020 And so I just said, well, I'll just go get in deeper. So I did. 495 00:32:51,560 --> 00:32:56,280 Greenblatt's plan is to fix up properties and flip them for a profit, 496 00:32:56,280 --> 00:32:57,820 cases, rent them out. 497 00:32:58,640 --> 00:33:02,280 Occasionally, investors visit New York to check on their investments. 498 00:33:03,040 --> 00:33:04,240 Greenblatt drives them around. 499 00:33:04,440 --> 00:33:06,980 He likes to show off his real estate prowess. 500 00:33:08,010 --> 00:33:12,850 He took them into Harlem, and not only was he showing them the property that 501 00:33:12,850 --> 00:33:16,670 they were interested in possibly investing in, he had pointed up the 502 00:33:16,670 --> 00:33:20,630 indicate that it was right down the street from former President Clinton's 503 00:33:20,630 --> 00:33:21,630 office. 504 00:33:22,770 --> 00:33:25,450 Carter Blunden never visits New York. 505 00:33:25,910 --> 00:33:30,570 From 1 ,100 miles away, he's convinced Greenblatt is doing right by him. 506 00:33:30,810 --> 00:33:32,090 So he dives in deeper. 507 00:33:32,410 --> 00:33:37,370 Within two years, Blunden is invested in five properties in Harlem, two in 508 00:33:37,370 --> 00:33:39,570 Queens, one in the Bronx, and one in Brooklyn. 509 00:33:39,890 --> 00:33:43,290 Things are going so well, even his wife Claire wants in. 510 00:33:43,890 --> 00:33:48,210 I had $25 ,000 that I wanted to invest. 511 00:33:48,690 --> 00:33:53,390 And since he was getting such a good return, I decided that I would invest my 512 00:33:53,390 --> 00:33:54,590 $25 ,000. 513 00:33:55,570 --> 00:33:58,290 For a while, the interest checks keep coming. 514 00:33:58,730 --> 00:34:03,510 In total, Blunden gets more than $55 ,000 in interest payments. 515 00:34:04,010 --> 00:34:06,070 I was getting a monthly return, and it was good. 516 00:34:06,290 --> 00:34:08,650 Checks were being cashed and everything. 517 00:34:08,870 --> 00:34:10,010 There was no problem at all. 518 00:34:10,429 --> 00:34:15,330 But when those checks start bouncing... Suddenly, they just turn sour. 519 00:34:15,929 --> 00:34:20,870 It doesn't take long for the Blundens to figure out Joe Greenblatt is playing 520 00:34:20,870 --> 00:34:21,870 them. 521 00:34:22,090 --> 00:34:26,330 Next on American Greed, bouncing checks reveal a web of lies. 522 00:34:27,350 --> 00:34:32,310 Once they started bouncing checks, then the investors were all, where is my 523 00:34:32,310 --> 00:34:36,010 money and where is this money? And that's when it all starts collapsing. 524 00:34:46,510 --> 00:34:53,489 Between 2001 and 2003, Florida retiree Carter Blunden taps into his IRA to the 525 00:34:53,489 --> 00:34:58,510 tune of $165 ,000 and invests in Maywood Capital. 526 00:34:59,210 --> 00:35:02,990 It wasn't my life savings, but it was quite a lot of my savings, yeah. 527 00:35:03,190 --> 00:35:04,830 Biggest share of it, yeah. 528 00:35:05,110 --> 00:35:09,070 You're talking about retirees who don't have other sources of income. 529 00:35:09,470 --> 00:35:12,610 In most cases, it wasn't discretionary income. 530 00:35:12,870 --> 00:35:15,050 It was income that they really needed. 531 00:35:15,760 --> 00:35:21,580 Maywood Capital is run by Joseph Greenblatt, a convicted Ponzi schemer 532 00:35:21,580 --> 00:35:26,300 been ordered by a Brooklyn, New York judge to pay back $5 million to his 533 00:35:26,300 --> 00:35:27,880 or face jail time. 534 00:35:29,400 --> 00:35:34,180 Carter Blunden and his wife have no idea about Greenblatt's criminal past. 535 00:35:34,500 --> 00:35:38,220 What they do know is Joe Greenblatt is awfully convincing. 536 00:35:38,900 --> 00:35:41,360 He was a very good salesman. 537 00:35:41,760 --> 00:35:47,100 He's a nice -looking fella, and he was very knowledgeable, seemed very, very up 538 00:35:47,100 --> 00:35:49,200 on all type of investments and everything. 539 00:35:49,540 --> 00:35:53,140 Lots of the investors told us that they liked Joe. He was always responsive. 540 00:35:53,720 --> 00:35:55,100 He always talked to us. 541 00:35:55,320 --> 00:35:58,980 And I think he probably did, and that was probably because he had to do that 542 00:35:58,980 --> 00:36:01,720 order to continue to run the scheme. 543 00:36:03,150 --> 00:36:09,070 But by late 2003, Claire and Carter Blunden realized something is wrong when 544 00:36:09,070 --> 00:36:11,990 monthly checks they had been cashing are suddenly bouncing. 545 00:36:12,950 --> 00:36:14,930 Blunden gets Greenblatt on the phone. 546 00:36:15,630 --> 00:36:19,710 And I asked him what was going on. I said, I want you to return my money. I 547 00:36:19,710 --> 00:36:21,350 don't want to, I want to get out of this. 548 00:36:22,430 --> 00:36:23,730 Blunden isn't alone. 549 00:36:24,670 --> 00:36:27,750 Greenblatt passes bad checks to dozens of investors. 550 00:36:28,150 --> 00:36:33,110 Once they started bouncing checks, then the investors were all, where is my 551 00:36:33,110 --> 00:36:37,050 money and where is this money? And that's when it all starts collapsing. 552 00:36:38,350 --> 00:36:42,350 Greenblatt faces a tidal wave of angry investor calls and letters. 553 00:36:42,630 --> 00:36:44,530 He tries to calm the storm. 554 00:36:45,210 --> 00:36:47,530 There were a myriad of excuses. 555 00:36:48,250 --> 00:36:52,970 They would say, well, oh, it's really just a mistake. It's not that the money 556 00:36:52,970 --> 00:36:55,230 isn't there. It's just that we changed banks. 557 00:36:55,770 --> 00:36:59,350 So it was another way of just buying more time. 558 00:37:00,430 --> 00:37:04,950 Fed up with the excuses, investors start calling and writing authorities in New 559 00:37:04,950 --> 00:37:06,030 York and New Jersey. 560 00:37:06,870 --> 00:37:11,690 A letter from one of those investors in October of 2003 triggers an 561 00:37:11,690 --> 00:37:15,610 investigation by the New Jersey Attorney General's Office and the Bureau of 562 00:37:15,610 --> 00:37:16,610 Securities. 563 00:37:17,670 --> 00:37:20,090 Soon, a startling discovery is made. 564 00:37:20,450 --> 00:37:24,170 Maywood Capital didn't own all the properties they claimed. 565 00:37:24,790 --> 00:37:29,750 Some of the properties were never purchased. And in some of the 566 00:37:29,750 --> 00:37:34,830 ambassadors actually attended the closing and thought that the closing had 567 00:37:34,830 --> 00:37:41,190 through with no problems. But in reality, Maywood was canceling the 568 00:37:41,190 --> 00:37:43,650 the purchase of the properties, and they were never purchased. 569 00:37:45,040 --> 00:37:49,640 As the investigation deepens, the Bureau uncovers even more deceit. 570 00:37:50,120 --> 00:37:53,900 Greenblatt is using Maywood investor money to chip away at that $5 million 571 00:37:53,900 --> 00:37:57,520 restitution from his 1995 Brooklyn conviction. 572 00:37:58,360 --> 00:38:04,760 I have not encountered a case besides this one where investor money is being 573 00:38:04,760 --> 00:38:09,060 used to pay restitution from a prior criminal scheme. It was unusual. 574 00:38:10,860 --> 00:38:16,140 They also discovered more than $9 million in officer loans that are never 575 00:38:16,140 --> 00:38:20,240 back and wild spending on the company's American Express card. 576 00:38:20,640 --> 00:38:25,300 There were personal expenses charged to credit cards, such as shopping at Neiman 577 00:38:25,300 --> 00:38:27,680 Marcus, Saks, Polo Ralph Lauren. 578 00:38:27,880 --> 00:38:29,680 There were purchases for jewelry. 579 00:38:30,040 --> 00:38:32,380 There were charges for medical expenses. 580 00:38:32,700 --> 00:38:37,540 The investors did not know that their money was being used for their personal 581 00:38:37,540 --> 00:38:38,540 expenses. 582 00:38:39,340 --> 00:38:40,760 January 2005. 583 00:38:41,220 --> 00:38:46,440 The New Jersey Attorney General's Office and the Bureau of Securities file a 584 00:38:46,440 --> 00:38:51,060 securities and racketeering suit against Joseph Greenblatt and other Maywood 585 00:38:51,060 --> 00:38:55,660 associates. The civil suit accuses Maywood and Greenblatt of stealing more 586 00:38:55,660 --> 00:39:02,260 $42 million from over 100 investors while diverting over $9 million for 587 00:39:02,260 --> 00:39:03,260 use. 588 00:39:03,500 --> 00:39:08,460 Meanwhile, Manhattan District Attorney Cyrus Vance says his office is watching 589 00:39:08,460 --> 00:39:11,260 closely and opens its own criminal investigation. 590 00:39:12,060 --> 00:39:18,200 I think once we were aware of the acts in other jurisdictions, certainly they 591 00:39:18,200 --> 00:39:21,840 were helpful in us understanding who he was, how he'd acted. 592 00:39:22,860 --> 00:39:26,540 By this time, Greenblatt's legal troubles are exploding. 593 00:39:27,700 --> 00:39:30,800 Greenblatt has been living with an ultimatum from a Brooklyn judge. 594 00:39:31,760 --> 00:39:36,900 Pay back the $5 million he swindled from the victims of his 1995 conviction or 595 00:39:36,900 --> 00:39:37,900 go to jail. 596 00:39:39,020 --> 00:39:43,900 Greenblatt comes up short, so the judge orders him to prison for three to nine 597 00:39:43,900 --> 00:39:44,900 years. 598 00:39:47,020 --> 00:39:50,200 Joseph Greenblatt and Maywood Capital file for bankruptcy. 599 00:39:52,160 --> 00:39:57,640 Attorneys John Pereira and John Campo are brought in to untangle Maywood's 600 00:39:58,360 --> 00:40:00,400 He was fairly cooperative with us. 601 00:40:00,800 --> 00:40:04,840 I think he knew, he understood that the gig was up. 602 00:40:05,800 --> 00:40:10,020 Kevin Desmarais is a reporter for The Record in Bergen County, New Jersey. 603 00:40:10,880 --> 00:40:17,020 At times it could get tough just tracking all these things and really 604 00:40:17,020 --> 00:40:18,020 need a spreadsheet. 605 00:40:18,420 --> 00:40:23,360 With the lid about to be blown off of Maywood Capital, this story becomes big 606 00:40:23,360 --> 00:40:26,140 news. For a time, it becomes his life. 607 00:40:26,680 --> 00:40:29,260 Kevin Desmarais was very diligent. 608 00:40:29,790 --> 00:40:36,310 in his investigation of Joseph Greenblatt. He did really open up a lot 609 00:40:36,310 --> 00:40:38,010 people's eyes about what was going on. 610 00:40:39,250 --> 00:40:43,870 Newspaper reporters rely on photos as much as the written word to tell their 611 00:40:43,870 --> 00:40:48,810 stories. Kevin DeMurray realizes he doesn't have a good photo of Greenblatt 612 00:40:48,810 --> 00:40:51,910 an upcoming cover story, so he asks him for one. 613 00:40:52,460 --> 00:40:57,320 The only picture we could find was a typical perp walk picture with Joe and 614 00:40:57,320 --> 00:40:58,320 father, Max. 615 00:40:58,440 --> 00:41:01,840 And it was a terrible picture that I knew we couldn't use. 616 00:41:02,080 --> 00:41:07,300 But I persuaded him, if he would let us take a picture of him in Harlem, that we 617 00:41:07,300 --> 00:41:08,880 wouldn't run the picture with his father. 618 00:41:09,180 --> 00:41:13,380 So he agreed to it. And I just felt so proud because I had caught the con man. 619 00:41:15,440 --> 00:41:16,440 November 2007, 620 00:41:17,140 --> 00:41:18,140 Manhattan. 621 00:41:18,350 --> 00:41:24,070 A New York County grand jury indicts Maywood Capital and Joseph Greenblatt on 622 00:41:24,070 --> 00:41:29,770 counts ranging from grand larceny to tax fraud in a $31 million Ponzi scheme. 623 00:41:30,870 --> 00:41:34,850 And we went out of town, created a whole fiction. It was a sophisticated, 624 00:41:35,170 --> 00:41:39,030 purposeful, very harmful criminal enterprise. 625 00:41:39,830 --> 00:41:41,070 September 2012. 626 00:41:42,220 --> 00:41:47,360 Five years and over 100 court appearances later, Joseph Greenblatt 627 00:41:47,360 --> 00:41:51,040 Manhattan Supreme Court to answer those 2 ,007 charges. 628 00:41:51,820 --> 00:41:57,340 Greenblatt pleads guilty to swindling victims out of $31 million and is later 629 00:41:57,340 --> 00:42:00,220 sentenced to six to 18 years behind bars. 630 00:42:00,780 --> 00:42:05,620 As for Maywood capital victim Carter Blunden, he eventually gets back more 631 00:42:05,620 --> 00:42:08,780 $57 ,000 as part of the bankruptcy proceedings. 632 00:42:09,640 --> 00:42:14,080 That's 52 cents on the dollar recovered for Blunden and the dozens of other 633 00:42:14,080 --> 00:42:15,080 Maywood victims. 634 00:42:15,500 --> 00:42:19,640 We're proud of the fact we were able to get so much money back for them, but 635 00:42:19,640 --> 00:42:21,900 that's an unusual case in the Ponzi scheme. 636 00:42:23,040 --> 00:42:25,420 We've gotten about 52 % back. 637 00:42:25,960 --> 00:42:28,720 But some victims aren't that lucky. 638 00:42:28,920 --> 00:42:34,960 The one thing that remains with me most in this is the victims. 639 00:42:35,580 --> 00:42:40,860 the elderly retirees who lost their life savings, and it's all gone. 640 00:42:41,260 --> 00:42:43,340 And that's not going to come back. 641 00:42:45,160 --> 00:42:50,740 Next, a shady lawyer from the Sunshine State scams $1 .2 billion on a 10 -year 642 00:42:50,740 --> 00:42:55,680 spree. One investor alone lost $125 million. Florida's largest financial 643 00:42:55,900 --> 00:42:59,800 American Greed scams scoundrels and suckers. Next on CNBC. 644 00:43:00,320 --> 00:43:04,160 Restaurant Startup premieres Tuesday, July 8th on CNBC.