1 00:00:00,400 --> 00:00:05,480 In a mountain retreat, a big game hunter and a lifelong con man stalk their 2 00:00:05,480 --> 00:00:06,480 prey. 3 00:00:06,840 --> 00:00:13,340 Once I finally came to the realization that this thing is just a scam, it was 4 00:00:13,340 --> 00:00:14,340 too late. 5 00:00:14,580 --> 00:00:17,720 No victim is too big or too small. 6 00:00:18,220 --> 00:00:21,580 They took 25 bucks from a 15 -year -old paper boy. 7 00:00:21,780 --> 00:00:23,440 If you had it to give, they'd take it. 8 00:00:23,800 --> 00:00:27,040 Until a trusted employee decides to bring them down. 9 00:00:27,720 --> 00:00:28,720 from the inside. 10 00:00:29,180 --> 00:00:32,960 If I just walked away, nobody would stop them. They would just keep taking 11 00:00:32,960 --> 00:00:38,180 money. And later, in a tough real estate market, Hawaiian mortgage broker James 12 00:00:38,180 --> 00:00:42,800 Lowe claims there's big money to be made by fixing bad credit scores. 13 00:00:43,240 --> 00:00:46,040 12 % return in 90 days, which is astronomical. 14 00:00:46,400 --> 00:00:51,540 But his investors' money goes straight into a veritable museum of collectibles. 15 00:00:51,900 --> 00:00:56,320 These are opal -encrusted, handmade pool cues. 16 00:00:57,070 --> 00:01:01,230 When the bubble bursts, the treasure's missing. So is James Lowe. 17 00:01:02,290 --> 00:01:03,750 The judge comes out. 18 00:01:04,950 --> 00:01:06,030 Where's Mr. Lowe? 19 00:01:24,680 --> 00:01:26,760 February 19, 2003. 20 00:01:27,060 --> 00:01:32,340 In a conference room somewhere in Chicago, four men sit down to a meeting. 21 00:01:33,060 --> 00:01:39,800 A wealthy real estate developer 22 00:01:39,800 --> 00:01:44,360 and his associates, seen here with their backs to the camera, are looking for an 23 00:01:44,360 --> 00:01:47,000 investment that will help finance their developments. 24 00:01:48,160 --> 00:01:52,220 The two men sitting across from them are Norman Schmidt and Chuck Lewis. 25 00:01:52,840 --> 00:01:54,900 They have a can't -miss opportunity. 26 00:01:56,580 --> 00:02:01,460 All you do is put it into the trust, and we leverage your money and do it for 27 00:02:01,460 --> 00:02:04,980 you. And I make a lot of money on you, because I get paid every day. 28 00:02:05,820 --> 00:02:07,960 And so I'm using your money for 30 days. 29 00:02:08,259 --> 00:02:11,180 But you're guaranteeing me 10 % a month. 10 % a month. A month. 30 00:02:11,740 --> 00:02:12,740 That's great. 31 00:02:14,090 --> 00:02:18,970 Schmidt claims to buy and sell multi -billion dollar bank bonds on a secret 32 00:02:18,970 --> 00:02:22,310 market available only to the world's wealthy elite. 33 00:02:22,690 --> 00:02:27,530 He says it's where captains of industry and even presidents make their millions. 34 00:02:28,590 --> 00:02:33,410 What Schmidt 35 00:02:33,410 --> 00:02:40,350 and Lewis don't know is that this conference 36 00:02:40,350 --> 00:02:41,890 room has a hidden camera. 37 00:02:42,330 --> 00:02:45,450 And the developer is an FBI agent. 38 00:02:46,410 --> 00:02:53,230 This is the final chapter in a $56 million fraud that has ensnared more 39 00:02:53,230 --> 00:02:55,230 thousand victims across the globe. 40 00:02:55,590 --> 00:03:00,010 Reaping the profits, the con artists have lived like royalty. 41 00:03:00,690 --> 00:03:04,590 Appropriately enough, their story begins in a castle. 42 00:03:09,010 --> 00:03:15,350 Nestled high in the Colorado Rockies, sits the Redstone Castle, a 42 -room 43 00:03:15,350 --> 00:03:16,350 mansion. 44 00:03:17,650 --> 00:03:19,790 Here we are. Welcome to the Redstone Castle. 45 00:03:21,190 --> 00:03:27,290 Sid Lang manages the property built in 1897 by coal magnate John Cleveland 46 00:03:27,290 --> 00:03:28,290 Osgood. 47 00:03:29,290 --> 00:03:33,890 Osgood used this as his private home, but he also used it as a hunting lodge. 48 00:03:34,190 --> 00:03:39,930 More than a century later, in April 2000, the Redstone will again be used as 49 00:03:39,930 --> 00:03:41,050 hunting lodge of sorts. 50 00:03:41,710 --> 00:03:44,470 The big game this time, wealthy investors. 51 00:03:45,210 --> 00:03:51,150 And the hunter, Norman Schmidt, who calls himself an investment manager and 52 00:03:51,150 --> 00:03:54,690 spends his life hopping from one get -rich -quick scheme to the next. 53 00:03:56,770 --> 00:04:00,090 Investigator Chuck Reinhardt has followed Schmidt for years. 54 00:04:01,410 --> 00:04:04,630 You and I, we go to work every day, expect a paycheck at the end of the 55 00:04:04,790 --> 00:04:07,530 Norm, his personality just wasn't suited to that. 56 00:04:07,880 --> 00:04:11,540 If he could find a way to get that winning lottery ticket or some other 57 00:04:11,540 --> 00:04:14,940 make that big score, that's what he was looking for. 58 00:04:15,720 --> 00:04:20,399 Schmidt and an associate run an investment fund called the Reserve 59 00:04:20,399 --> 00:04:24,860 Trust, which claims to trade in international bank debentures. 60 00:04:25,780 --> 00:04:29,560 Supposedly, these debentures are huge pools of money sold by banks around the 61 00:04:29,560 --> 00:04:30,560 world. 62 00:04:30,820 --> 00:04:35,940 And elite traders can make millions buying and selling them on a secret 63 00:04:36,840 --> 00:04:41,180 The castle is the perfect setting to wine and dine potential investors. 64 00:04:43,120 --> 00:04:48,840 But longtime caretaker Sid Lang quickly sours to the new owners of Redstone and 65 00:04:48,840 --> 00:04:52,360 to the parade of investors who flock there. 66 00:04:52,740 --> 00:04:58,260 The characters that they would have visit them were shady and the meetings 67 00:04:58,260 --> 00:05:04,000 were... quiet and a hidden part of the carriage house, and everything really 68 00:05:04,000 --> 00:05:06,840 pretty soon just started getting really shady feeling. 69 00:05:08,260 --> 00:05:14,000 And their habit of hosting alcohol -drenched all -night parties sullies the 70 00:05:14,000 --> 00:05:15,180 castle's good name. 71 00:05:15,700 --> 00:05:19,440 I tried to introduce Norm to the community. 72 00:05:19,980 --> 00:05:23,040 But then people would say, oh, you know, where's the new owner? 73 00:05:23,260 --> 00:05:27,620 Oftentimes I'd say, he's over, see that drunk over by the bar? 74 00:05:28,840 --> 00:05:35,300 In June, Lange is fed up and decides to quit her job and leave Redstone. But as 75 00:05:35,300 --> 00:05:39,280 a parting gift, she's offered a chance to invest in the fund. 76 00:05:39,600 --> 00:05:45,160 In exchange for investing $50 ,000 of her savings, she's promised a monthly 77 00:05:45,160 --> 00:05:51,080 return of 10%. So out of $50 ,000, he said you could be bringing in up to $5 78 00:05:51,080 --> 00:05:53,300 ,000 a month possibly at some point. 79 00:05:53,660 --> 00:05:59,700 Though Lange finds Norm Schmidt and his investors distasteful, She's taken in by 80 00:05:59,700 --> 00:06:01,420 the promise of an easier life. 81 00:06:01,780 --> 00:06:06,960 The whole time when you're struggling and money is hard to come by, and you 82 00:06:06,960 --> 00:06:13,100 think for once maybe I've got an investment that I can hold my own and 83 00:06:13,100 --> 00:06:17,660 to worry for the rest of my life about where my next dime is coming from. 84 00:06:18,620 --> 00:06:23,880 Lang invests $50 ,000, moves to Denver, and buys a new home. 85 00:06:25,160 --> 00:06:27,720 But signs of trouble begin almost immediately. 86 00:06:28,120 --> 00:06:31,560 The monthly statements that were promised never come. 87 00:06:33,000 --> 00:06:37,560 Two, three, four months go by and I'm not hearing anything and calling 88 00:06:37,560 --> 00:06:44,100 frantically because I feel like they're jerking me around, which they are, 89 00:06:44,220 --> 00:06:48,080 and just couldn't get anybody to respond. 90 00:06:49,060 --> 00:06:54,180 In late 2000, the castle is shuttered. Schmidt is nowhere to be found. 91 00:06:55,180 --> 00:07:02,060 The fund is finished, and investors, about 100 of them, are out some $8 92 00:07:04,360 --> 00:07:06,200 Lange faces reality. 93 00:07:06,700 --> 00:07:12,840 Once I finally just came to the realization that this thing is just a 94 00:07:12,840 --> 00:07:13,840 was too late. 95 00:07:13,880 --> 00:07:19,680 It was too late. I was in a home that I couldn't afford, behind in medical bills 96 00:07:19,680 --> 00:07:21,100 that we couldn't afford. 97 00:07:22,840 --> 00:07:25,180 Investor Sid Lang is out 50 grand. 98 00:07:25,820 --> 00:07:30,420 Though she will eventually recoup some of that in a civil lawsuit, the damage 99 00:07:30,420 --> 00:07:33,920 done. She loses her dream home to foreclosure. 100 00:07:35,100 --> 00:07:39,560 When you get set back like that, you just really never get caught up. 101 00:07:40,080 --> 00:07:43,640 It's like quicksand. You just can never dig your way out of that. 102 00:07:44,280 --> 00:07:47,340 And I just never really did. 103 00:07:48,840 --> 00:07:51,540 Now Schmidt wants another go at it. 104 00:07:52,220 --> 00:07:57,280 He starts a new firm called Capital Holdings based on the lessons he learned 105 00:07:57,280 --> 00:07:58,280 Reserve Foundation. 106 00:08:03,900 --> 00:08:09,340 Former U .S. Attorney Wyatt Angelo says Schmidt reaches out to an old friend for 107 00:08:09,340 --> 00:08:10,600 help with the new firm, 108 00:08:11,340 --> 00:08:12,319 Chuck Lewis. 109 00:08:12,320 --> 00:08:16,740 Chuck Lewis was a former used car salesman and former associate with Norm 110 00:08:16,740 --> 00:08:19,800 Schmidt and other investment activities. 111 00:08:20,840 --> 00:08:21,960 were probably questionable. 112 00:08:23,080 --> 00:08:28,060 Lewis goes to work with Schmidt in a downtown Denver office, soliciting new 113 00:08:28,060 --> 00:08:33,140 investors for capital holdings. This time, Schmidt claims to have a new 114 00:08:33,140 --> 00:08:39,580 to trade from the Federal Reserve, giving him exclusive access to the world 115 00:08:39,580 --> 00:08:44,260 prime banknotes, a market open to just a handful of the world's wealthy elite. 116 00:08:44,640 --> 00:08:45,880 A familiar pitch. 117 00:08:48,180 --> 00:08:53,600 And, as seen in this FBI video, Lewis sings his praises. 118 00:08:54,060 --> 00:08:58,340 They got wired with people at the world level that have been in this, okay? 119 00:08:58,500 --> 00:09:00,000 Yeah. Which are very, very few. 120 00:09:00,300 --> 00:09:01,300 Very, very few. 121 00:09:02,140 --> 00:09:06,980 Schmidt claims to pool investors' funds and then use the money to trade 122 00:09:06,980 --> 00:09:08,580 multibillion -dollar bank bonds. 123 00:09:08,920 --> 00:09:12,340 He says he then returns the profits at 10 % per month. 124 00:09:13,220 --> 00:09:17,520 If you're working on 10 % a month, this is what you'd be working on. 125 00:09:18,810 --> 00:09:20,210 10 % return a month. 126 00:09:21,290 --> 00:09:26,350 And so then over the course of the year, I'm looking at 120%. That's what you're 127 00:09:26,350 --> 00:09:27,350 telling me. 128 00:09:28,390 --> 00:09:33,350 And investors, he says, are never in danger of losing their principal. 129 00:09:33,790 --> 00:09:38,190 When you put it into the trust, or you put it into the brokerage firm now with 130 00:09:38,190 --> 00:09:40,610 Wells Fargo, you get an insurance policy. 131 00:09:41,010 --> 00:09:44,710 Now, if you want to insure it with credit risk, they'll insure your 132 00:09:46,380 --> 00:09:50,160 Schmidt and Lewis promise massive returns and no risk. 133 00:09:50,360 --> 00:09:55,660 The deal catches on, according to Chuck Lewis, in an exclusive telephone 134 00:09:55,660 --> 00:09:57,660 interview with American Greed. 135 00:09:57,920 --> 00:10:02,800 My family got involved, some of my friends got involved, and it was just a 136 00:10:02,800 --> 00:10:07,560 reaction, maybe somewhat similar to a multi -level marketing program, you 137 00:10:09,320 --> 00:10:14,380 And with the addition of Michael Smith, a big game hunter and insurance salesman 138 00:10:14,380 --> 00:10:15,720 specializing in... 139 00:10:15,960 --> 00:10:20,340 alternative investments, Lewis says the scam explodes. 140 00:10:20,940 --> 00:10:26,460 It is ballooned. I imagine it went from maybe $50 ,000 to $100 ,000 a month to a 141 00:10:26,460 --> 00:10:28,480 million dollars a week in just a few months. 142 00:10:30,420 --> 00:10:35,440 Smith markets capital holdings to retirees like Carol Hendrickson. 143 00:10:35,720 --> 00:10:39,080 She and her husband Clarence had run a lake retreat in Idaho. 144 00:10:39,440 --> 00:10:43,420 The couple is looking to boost their income when a friend recommends the 145 00:10:43,420 --> 00:10:44,420 investment. 146 00:10:44,600 --> 00:10:49,060 My husband thought it would be a good way for him to put away so that if 147 00:10:49,060 --> 00:10:54,660 anything happened to him, that I would be provided for in a comfortable way. 148 00:10:56,180 --> 00:11:01,380 According to state securities investigator Chuck Reinhart, the 149 00:11:01,380 --> 00:11:05,700 fairly typical of people who invest with Norm Schmidt, though the promised 150 00:11:05,700 --> 00:11:07,840 returns may sound too good to be true. 151 00:11:08,430 --> 00:11:11,070 It's the triumph of hope over experience. 152 00:11:11,450 --> 00:11:15,330 When you get close to retirement, you're trying to pad that nest egg for the 153 00:11:15,330 --> 00:11:18,890 final time. It may sound odd, but you really want to believe. 154 00:11:19,870 --> 00:11:24,110 Boy, if I could just put this $25 ,000 in and turn it into a half a million 155 00:11:24,110 --> 00:11:25,590 dollars in a year or something. 156 00:11:26,590 --> 00:11:31,950 As Hendrickson remembers it, the home of Smith, the big game hunter, is like a 157 00:11:31,950 --> 00:11:34,150 miniature version of the Redstone Castle. 158 00:11:35,230 --> 00:11:36,230 Exotic animals. 159 00:11:36,820 --> 00:11:43,320 antelope and animals that he told us he had shot on safari all over the world he 160 00:11:43,320 --> 00:11:49,120 would say you're just taking a breath with all this information of wealth that 161 00:11:49,120 --> 00:11:55,440 all came through this investment smith offers them seven percent a month and 162 00:11:55,440 --> 00:12:01,080 assures them the deal is safe they decide to take the plunge taking out 163 00:12:01,080 --> 00:12:04,920 thousand dollars from a mutual fund to invest with smith 164 00:12:05,870 --> 00:12:09,630 We were told our money would be insured, and it would be insured through Lloyds 165 00:12:09,630 --> 00:12:15,550 of Lending. We did get a letter along with this form showing Capital Holdings 166 00:12:15,550 --> 00:12:17,650 was insured for $200 million. 167 00:12:23,270 --> 00:12:26,730 For Norm Schmidt, Capital Holdings is paying off. 168 00:12:27,030 --> 00:12:32,390 By the fall of 2002, he's breaking in more than $2 million a year. 169 00:12:34,860 --> 00:12:40,280 Schmidt finances an entire NASCAR race team with the money and appoints his son 170 00:12:40,280 --> 00:12:41,280 the driver. 171 00:12:41,440 --> 00:12:46,600 The race team functions much like the Redstone Castle did in the earlier fund. 172 00:12:46,940 --> 00:12:49,580 It was another, I guess I would call it a prop. 173 00:12:49,940 --> 00:12:55,000 And investors were taken by that and thought that, well, he's doing very 174 00:12:55,220 --> 00:13:00,800 I got my money in there and someday I'll be able to buy all these wonderful 175 00:13:00,800 --> 00:13:01,800 things. 176 00:13:02,570 --> 00:13:04,950 But the fast life is all a fraud. 177 00:13:06,370 --> 00:13:12,650 In January 2001, Chuck Reinhardt at the Colorado Division of Securities gets a 178 00:13:12,650 --> 00:13:15,190 complaint from three people in Fort Collins. 179 00:13:15,690 --> 00:13:20,710 They claim they had each invested $25 ,000 with Schmidt and never got their 180 00:13:20,710 --> 00:13:21,710 money back. 181 00:13:21,930 --> 00:13:24,830 Reinhardt recognizes the scam immediately. 182 00:13:25,550 --> 00:13:27,090 It was a classic. 183 00:13:27,580 --> 00:13:28,580 Prime Bank note scheme. 184 00:13:28,960 --> 00:13:33,580 All the language was there that's been used by perpetrators of this scheme for 185 00:13:33,580 --> 00:13:34,580 25 years. 186 00:13:35,180 --> 00:13:40,420 It's a genre of fraud that often preys on people's desire to believe in a 187 00:13:40,420 --> 00:13:43,420 market available only to the ultra -rich. 188 00:13:43,800 --> 00:13:47,700 This is for the elite of the world. Take the top 10 billionaires of the world, 189 00:13:47,780 --> 00:13:50,920 and they would all tell you their stories of how they've made millions in 190 00:13:50,920 --> 00:13:54,680 program. I'm here to tell you that it does not exist, period. 191 00:13:56,569 --> 00:14:00,890 Reinhard and FBI Special Agent Stephanie Hahn begin an investigation. 192 00:14:01,670 --> 00:14:04,690 In late 2002, they get their break. 193 00:14:05,030 --> 00:14:07,590 Our break comes when I receive a call from a woman. 194 00:14:07,910 --> 00:14:10,690 She's a little nervous. She doesn't want to identify herself. 195 00:14:11,730 --> 00:14:16,810 The caller says she's the office manager for a Denver company that sells prime 196 00:14:16,810 --> 00:14:22,210 banknote. As she describes the business, it sounds to Reinhard like the very 197 00:14:22,210 --> 00:14:24,970 same scam he's been trailing for the past year and a half. 198 00:14:25,400 --> 00:14:26,400 He takes a chance. 199 00:14:26,740 --> 00:14:28,120 So I offered her a deal. 200 00:14:28,940 --> 00:14:31,880 If I can tell you who you work for, will you tell me who you are? 201 00:14:32,480 --> 00:14:33,660 She says, sure. 202 00:14:35,280 --> 00:14:38,780 He says, Norman Schmidt and Chuck Lewis. 203 00:14:40,800 --> 00:14:47,120 And I went to pieces, of course, because those are the two people that I worked 204 00:14:47,120 --> 00:14:52,440 for. Sue Pike, the office manager who made the call, agrees to meet with 205 00:14:52,440 --> 00:14:54,100 Reinhardt and Special Agent Hahn. 206 00:14:55,020 --> 00:15:00,060 She tells them she becomes suspicious in part because Lewis and Schmidt may be 207 00:15:00,060 --> 00:15:01,640 stealing investor deposits. 208 00:15:02,240 --> 00:15:05,320 It would just go to Chuck, and Chuck would supposedly take it to Norman. I 209 00:15:05,320 --> 00:15:06,400 no idea what they did with it. 210 00:15:08,360 --> 00:15:12,740 Reinhardt and Hahn tell Veidt that her boss is siphoning millions from 211 00:15:12,740 --> 00:15:18,180 unsuspecting retirees, and they persuade her to start working as an undercover 212 00:15:18,180 --> 00:15:19,900 witness for the FBI. 213 00:15:20,540 --> 00:15:23,740 I wanted to just never go back there again. 214 00:15:24,480 --> 00:15:25,980 I really didn't want to go back to work. 215 00:15:26,800 --> 00:15:29,020 But she knows what's at stake. 216 00:15:29,380 --> 00:15:32,960 If I just walked away and I didn't go back, nobody would stop them. 217 00:15:33,220 --> 00:15:34,840 They would just keep taking money. 218 00:15:35,900 --> 00:15:41,460 Coming up, see how one woman works as a double agent to take down a $56 million 219 00:15:41,460 --> 00:15:43,180 fraud for me inside. 220 00:15:43,740 --> 00:15:46,220 I was very frightened. I couldn't sleep at night. 221 00:16:02,920 --> 00:16:04,040 Denver, Colorado. 222 00:16:04,300 --> 00:16:10,040 In 2002, Norman Schmidt and Chuck Lewis are living the mile -high high life. 223 00:16:10,440 --> 00:16:15,620 Their investment firm, Capital Holdings, claims to use investors' money to trade 224 00:16:15,620 --> 00:16:18,920 enormous bank bonds issued on an ultra -secret market. 225 00:16:19,260 --> 00:16:24,060 Hundreds of investors have signed on, and the men are taking in an estimated 226 00:16:24,060 --> 00:16:25,600 million a week. 227 00:16:26,140 --> 00:16:29,620 Carol Hendrickson invests $50 ,000 in the fund. 228 00:16:29,820 --> 00:16:34,220 When she receives her first monthly statement, It shows she has made almost 229 00:16:34,220 --> 00:16:36,460 ,000 in just 30 days. 230 00:16:37,380 --> 00:16:42,680 She is so delighted she gets out special stationery and puts pen to paper. 231 00:16:43,200 --> 00:16:48,000 I actually sat down and wrote him a personal letter and thanked him for 232 00:16:48,000 --> 00:16:53,320 us join in on his company, and we were so happy with what was going on, and we 233 00:16:53,320 --> 00:16:55,680 hope to be able to continue to do business with him. 234 00:16:56,040 --> 00:17:01,350 Little does she know, her investment, along with hundreds more like it, is 235 00:17:01,350 --> 00:17:04,069 straight into the pockets of Lewis and Schmidt. 236 00:17:05,150 --> 00:17:10,530 Chuck lived as if he was wealthy. He spent a lot of time, spent a lot of cash 237 00:17:10,530 --> 00:17:13,369 the Diamond Cabaret, which is a strip club. 238 00:17:15,030 --> 00:17:18,010 Sue Veidt is leading a double life. 239 00:17:18,410 --> 00:17:23,270 While working as the Capitol Holdings accountant, she secretly reports every 240 00:17:23,270 --> 00:17:27,829 move they make to FBI Special Agent Stephanie Hahn. 241 00:17:29,160 --> 00:17:32,620 I would take my cell phone, I would go downstairs and go out back in the alley 242 00:17:32,620 --> 00:17:34,240 and hide behind a dumpster and call her. 243 00:17:36,060 --> 00:17:40,140 Good thing she smoked because that was her excuse to go outside. And so she 244 00:17:40,140 --> 00:17:44,120 said, I'm out at the dumpster and this is what they're doing today. 245 00:17:45,860 --> 00:17:48,060 But Vike has to keep up the facade. 246 00:17:48,440 --> 00:17:52,120 And doing the right thing is putting her in some difficult positions. 247 00:17:53,210 --> 00:17:57,450 She recalls one agonizing conversation with a potential investor. 248 00:17:58,010 --> 00:18:01,110 She must have asked me ten times, are you sure this is safe? 249 00:18:01,590 --> 00:18:06,790 I couldn't say because we couldn't alert them to anything. So I would have to 250 00:18:06,790 --> 00:18:08,350 say, you have to trust yourself. 251 00:18:08,710 --> 00:18:13,010 What do you think? What do you think you should do? Do you think you should be 252 00:18:13,010 --> 00:18:14,090 investing in this program? 253 00:18:14,730 --> 00:18:19,110 And she gave me a couple different checks that were close to $100 ,000. 254 00:18:26,440 --> 00:18:31,500 But before the FBI can shut down the operation, they need to catch Smith and 255 00:18:31,500 --> 00:18:32,520 Lewis red -handed. 256 00:18:33,280 --> 00:18:38,680 In February, at Agent Hahn's direction, Bike feeds Chuck Lewis information 257 00:18:38,680 --> 00:18:43,620 regarding a developer out of Chicago who is interested in investing a whopping 258 00:18:43,620 --> 00:18:45,680 $10 million with the firm. 259 00:18:46,340 --> 00:18:47,960 He takes the bait. 260 00:18:48,420 --> 00:18:50,900 Chuck just about jumped up and down. 261 00:18:51,300 --> 00:18:55,040 He was pretty excited about that. He told me I would get a... 262 00:18:55,260 --> 00:19:01,720 percentage of that if we managed to get him to invest, and they got right on it. 263 00:19:03,420 --> 00:19:09,840 On February 19, 2003, Schmidt and Lewis fly to Chicago to meet the supposed 264 00:19:09,840 --> 00:19:10,840 investor. 265 00:19:11,970 --> 00:19:16,950 But when Schmidt enters the developer's conference room in his racing jacket, an 266 00:19:16,950 --> 00:19:18,790 FBI camera is rolling. 267 00:19:21,170 --> 00:19:25,470 Schmidt makes his pick. 268 00:19:26,910 --> 00:19:30,990 So I wouldn't be buying the notes myself? No, all you do is put it into 269 00:19:30,990 --> 00:19:35,510 trust, and we leverage your money and do it for you. And I make a lot of money 270 00:19:35,510 --> 00:19:37,750 on it, because I get paid every day. 271 00:19:38,550 --> 00:19:40,730 And so I'm using your money for 30 days. 272 00:19:41,230 --> 00:19:42,970 But you're guaranteeing me 10 % of what? 273 00:19:44,110 --> 00:19:49,790 It's exactly what investigators want to hear. 274 00:19:51,990 --> 00:19:58,590 On March 7, 2003, FBI agents performed simultaneous search and seizures on the 275 00:19:58,590 --> 00:20:01,090 Denver office and five other related locations. 276 00:20:01,610 --> 00:20:06,070 They seized two million documents, free some 60 bank accounts. 277 00:20:06,570 --> 00:20:10,130 and confiscate assets like Schmidt's prized race cars. 278 00:20:10,490 --> 00:20:15,770 All told, the scheme has brought in more than 1 ,000 investors who have invested 279 00:20:15,770 --> 00:20:17,510 some $56 million. 280 00:20:18,210 --> 00:20:23,310 We had a victim in 48 of the 50 states and 13 countries. 281 00:20:24,190 --> 00:20:30,030 In March 2004, Chuck Lewis, Michael Smith, Norman Schmidt... 282 00:20:30,520 --> 00:20:36,160 and four other associates are arrested and charged with 57 counts of mail 283 00:20:36,540 --> 00:20:38,300 wire fraud, and conspiracy. 284 00:20:38,900 --> 00:20:41,260 Schmidt, Lewis, and Smith go to trial. 285 00:20:41,940 --> 00:20:47,800 All are found guilty, and Schmidt receives a record 330 -year sentence. 286 00:20:48,880 --> 00:20:53,520 The court took into consideration the vulnerability of the victims, and so the 287 00:20:53,520 --> 00:20:57,400 court gave him the maximum sentence for each count under which he was convicted, 288 00:20:57,640 --> 00:20:59,420 which resulted in the $300 ,000. 289 00:20:59,710 --> 00:21:00,710 30 -year sentence. 290 00:21:01,970 --> 00:21:04,810 Lewis gets 30 years in Leavenworth. 291 00:21:05,050 --> 00:21:09,470 He tells American Greed from prison he never knew the investment was a scam. 292 00:21:09,990 --> 00:21:14,170 I could have done a plea bargain for maybe just a few years, such as maybe 293 00:21:14,170 --> 00:21:15,890 or two or three of the others did do. 294 00:21:16,110 --> 00:21:19,550 But being innocent, I wanted to go to court and clear my name. 295 00:21:19,930 --> 00:21:22,850 And in doing so, they gave me 30 years. 296 00:21:24,670 --> 00:21:27,770 Lewis appeals his conviction and is denied. 297 00:21:28,510 --> 00:21:31,850 Michael Smith gets five years for his role in the scheme. 298 00:21:36,690 --> 00:21:41,990 Thanks to the FBI's ability to freeze bank accounts, most of the victims get 299 00:21:41,990 --> 00:21:43,930 about half of their investment back. 300 00:21:45,370 --> 00:21:50,530 FBI Special Agent Stephanie Hahn credits Sue Mike's work in helping them shut 301 00:21:50,530 --> 00:21:53,430 down the fraud before Schmidt could cash out. 302 00:21:53,950 --> 00:21:58,070 Without the help of Sue Veik and her cooperation with the FBI and the other 303 00:21:58,070 --> 00:22:01,570 agencies involved, there would be no money for the victims. That money would 304 00:22:01,570 --> 00:22:02,570 have all been gone. 305 00:22:04,730 --> 00:22:08,330 For victims like Carol Hendrickson, it still hurts. 306 00:22:08,830 --> 00:22:12,270 She's lost the money her husband wanted to put aside for her safety. 307 00:22:12,530 --> 00:22:14,870 In 2008, he passes away. 308 00:22:15,450 --> 00:22:18,170 When my husband passed away, his income stopped. 309 00:22:18,690 --> 00:22:22,790 So this was going to help me, you know, live. 310 00:22:25,510 --> 00:22:27,570 And obviously it didn't take place. 311 00:22:29,090 --> 00:22:34,010 An agent once told me, never let greed overcome common sense. 312 00:22:34,270 --> 00:22:36,550 And I think that's a lesson we all need to learn. 313 00:22:38,250 --> 00:22:43,990 Next on American Greed, a Hawaiian con artist steals millions with no regrets. 314 00:22:44,430 --> 00:22:49,050 I recall sitting there thinking, what, am I looking at Ted Bundy here? 315 00:22:49,310 --> 00:22:51,950 This man has absolutely no compassion. 316 00:23:05,480 --> 00:23:07,460 May 14, 2009. 317 00:23:07,880 --> 00:23:12,900 Just off a barren stretch of highway in central Washington lay the twisted 318 00:23:12,900 --> 00:23:18,340 remains of a white Ford Explorer 200 feet below the edge of a cliff. 319 00:23:19,460 --> 00:23:24,480 The SUV was compacted into like this small vehicle that didn't even resemble 320 00:23:24,480 --> 00:23:26,020 original SUV that went off the cliff. 321 00:23:26,220 --> 00:23:27,780 There was mangled metal everywhere. 322 00:23:28,800 --> 00:23:30,320 It was not a pretty picture. 323 00:23:33,100 --> 00:23:35,320 Police pull the driver out of the car. 324 00:23:35,580 --> 00:23:40,660 His ID says his name is James Lull, and he's got a round -trip ticket to Hawaii. 325 00:23:42,040 --> 00:23:46,200 Investigators are puzzled. How does a man with a ticket to paradise end up at 326 00:23:46,200 --> 00:23:47,820 the bottom of a desert ravine? 327 00:23:51,800 --> 00:23:57,760 The year is 1990, and 41 -year -old James Lull has just arrived on the 328 00:23:57,760 --> 00:24:01,540 island of Kauai to begin a new chapter in his life. 329 00:24:04,120 --> 00:24:09,080 Lull lands a few jobs in the mortgage industry and eventually ends up as the 330 00:24:09,080 --> 00:24:11,500 branch manager at U .S. Financial. 331 00:24:12,080 --> 00:24:15,180 People like doing business with him because he was this affable guy. 332 00:24:15,400 --> 00:24:18,460 He was this big teddy bear of a fellow, and people liked to be around him. 333 00:24:19,260 --> 00:24:23,440 And while he collects friends easily, he also has a penchant for collecting 334 00:24:23,440 --> 00:24:24,440 objects. 335 00:24:24,960 --> 00:24:29,640 Opals, arrowheads, meteorites, and sports memorabilia. 336 00:24:29,920 --> 00:24:32,240 His enthusiasm is contagious. 337 00:24:33,240 --> 00:24:36,840 He always had something in his pocket that was interesting to look at. 338 00:24:37,740 --> 00:24:41,600 Some of the time he would pull it out of his pocket and give it to you. 339 00:24:42,840 --> 00:24:47,880 Claire Mortimer first meets James Lull in December 2000, and he pitches her an 340 00:24:47,880 --> 00:24:48,880 investment opportunity. 341 00:24:49,400 --> 00:24:54,760 He says many of his loan applicants have poor credit scores, too low to qualify 342 00:24:54,760 --> 00:24:55,760 for mortgages. 343 00:24:56,760 --> 00:25:01,020 Investors like Mortimer can lend his clients short -term bridge loans. 344 00:25:01,710 --> 00:25:03,710 The applicants can then pay off debts. 345 00:25:04,690 --> 00:25:09,430 If he saw somebody whose credit score wasn't quite high enough and it was 346 00:25:09,430 --> 00:25:13,530 something as easy as paying off your credit card, those were the people who 347 00:25:13,530 --> 00:25:16,650 would present to me. He would say, this is the situation. 348 00:25:17,370 --> 00:25:21,610 Would you be interested in loaning X amount of dollars to this person? And it 349 00:25:21,610 --> 00:25:24,110 would be paid back to you within six months. 350 00:25:25,040 --> 00:25:30,220 Once the mortgage goes through, investors get their money back, plus a 351 00:25:30,220 --> 00:25:33,100 return on their investment in just a few months. 352 00:25:33,480 --> 00:25:37,980 Not bad at a time when Treasury bills pay only 6 % a year. 353 00:25:39,400 --> 00:25:44,220 Lowell's bridge loan, if not reported on a mortgage application, is considered 354 00:25:44,220 --> 00:25:48,240 mortgage fraud. But Lowell never explains that to his investors. 355 00:25:49,240 --> 00:25:54,220 And having worked long hours as a nurse while raising two teenagers on her own, 356 00:25:54,640 --> 00:25:57,700 Mortimer is pulled in by the lure of easy money. 357 00:25:58,540 --> 00:26:02,100 I knew that there were just so many years that my kids would still be with 358 00:26:02,180 --> 00:26:07,460 and I wanted those years to be in a safe place where I could spend more time 359 00:26:07,460 --> 00:26:08,460 with them. 360 00:26:09,860 --> 00:26:14,920 She invests several thousand dollars with Lowe, and in a few months gets all 361 00:26:14,920 --> 00:26:18,560 money back plus 12%. This is sweet. 362 00:26:19,000 --> 00:26:22,940 I just felt like, okay, this is... 363 00:26:23,760 --> 00:26:26,180 On the up and up, and let's do it again. 364 00:26:28,840 --> 00:26:34,640 Mortimer begins investing regularly with Lowe, as do scores of other investors 365 00:26:34,640 --> 00:26:35,640 on Kauai. 366 00:26:36,500 --> 00:26:38,860 We have something in Hawaii that we call the coconut wireless. 367 00:26:39,160 --> 00:26:42,120 And that's really the rumor mill that spreads among the people here, because 368 00:26:42,120 --> 00:26:45,480 everybody knows each other. And so one person talks to someone else at the 369 00:26:45,480 --> 00:26:48,760 cookout or at the potluck, and the word spreads like wildfire. 370 00:26:54,410 --> 00:26:59,130 And with a commission on every deal, Lull is reaping the benefits. 371 00:26:59,530 --> 00:27:05,990 In 2004, he moves into a $4 million house on the beach and takes his 372 00:27:05,990 --> 00:27:07,450 to the next level. 373 00:27:08,090 --> 00:27:14,830 He buys more rare coins, including one $287 ,000 buffalo nickel 374 00:27:14,830 --> 00:27:17,550 and acquires hundreds of pool cues. 375 00:27:18,390 --> 00:27:21,510 But you won't find these at your local bar. 376 00:27:22,410 --> 00:27:23,410 Opal. 377 00:27:24,149 --> 00:27:30,330 hand -made pool cues, the most valuable one of which, I understand, was worth 378 00:27:30,330 --> 00:27:31,390 about $50 ,000. 379 00:27:32,490 --> 00:27:38,710 In 2003, Lull has so many applicants looking to boost their scores, he tells 380 00:27:38,710 --> 00:27:41,310 Mortimer just to leave her money with him. 381 00:27:41,590 --> 00:27:47,610 He said, keeping track of this and facilitating this back and forth and 382 00:27:47,610 --> 00:27:50,430 it over is getting a little complicated. 383 00:27:51,580 --> 00:27:56,140 I'm in this office every day, and every day people come in here who could 384 00:27:56,140 --> 00:27:57,340 benefit from these loans. 385 00:27:58,540 --> 00:28:03,520 Over the next two years, Mortimer takes out three mortgages on her own homes. 386 00:28:03,720 --> 00:28:07,280 She invests more than $700 ,000 with Lowe. 387 00:28:07,480 --> 00:28:08,480 And why not? 388 00:28:08,620 --> 00:28:11,300 He's guaranteeing her 12 % a year. 389 00:28:11,560 --> 00:28:15,600 For a short period of time, I was filthy rich. 390 00:28:17,060 --> 00:28:19,200 But the good times don't last. 391 00:28:19,560 --> 00:28:25,140 Coming up... James Lull goes from island hero to public enemy number one. And 392 00:28:25,140 --> 00:28:27,340 angry investors want blood. 393 00:28:28,220 --> 00:28:32,500 It was like pitchforks and torches. They wanted to string this guy up. 394 00:28:46,320 --> 00:28:51,100 In 2006, James Lull is living an American dream in paradise. 395 00:28:52,220 --> 00:28:56,860 He's made millions operating a lucrative side business out of his mortgage 396 00:28:56,860 --> 00:28:59,240 company on the Hawaiian island of Kauai. 397 00:29:00,380 --> 00:29:03,920 Applicants come to him when they don't have a high enough credit score to 398 00:29:03,920 --> 00:29:05,940 qualify for an affordable mortgage. 399 00:29:08,170 --> 00:29:12,990 Michael Lilly, a former attorney general of Hawaii, says Lull gets money from 400 00:29:12,990 --> 00:29:16,390 investors, then offers applicants a short -term bridge loan. 401 00:29:16,790 --> 00:29:22,090 Lull gets them a $100 ,000, $200 ,000 bridge loan that's used to pay off 402 00:29:22,090 --> 00:29:23,490 whatever debt they had. 403 00:29:24,690 --> 00:29:29,070 The loan applicant boosts his credit score and gets the mortgage. 404 00:29:29,350 --> 00:29:32,370 And the investor gets a whopping 12 % return. 405 00:29:33,030 --> 00:29:35,130 The deals are wildly popular. 406 00:29:35,770 --> 00:29:39,770 Over the course of six years, Lull brings in some 50 investors. 407 00:29:40,450 --> 00:29:45,910 But around 2003, the investment scheme becomes a victim of its own success. 408 00:29:46,750 --> 00:29:50,250 People would tell their aunties, their cousins, their moms, their dads to get 409 00:29:50,250 --> 00:29:51,450 into this investment opportunity. 410 00:29:51,910 --> 00:29:56,070 But James Lull actually, at some point, had more investors than he had actual 411 00:29:56,070 --> 00:29:57,650 bridge loans to put their money within. 412 00:29:58,370 --> 00:30:02,810 But Lull keeps taking their money, even with no place to put it. 413 00:30:03,790 --> 00:30:08,110 To keep the scheme going, Lull encourages investors to roll their 414 00:30:08,110 --> 00:30:10,070 payments over into new deals. 415 00:30:10,410 --> 00:30:13,410 He then uses the funds to pay off old investors. 416 00:30:13,910 --> 00:30:15,450 But there's one problem. 417 00:30:15,950 --> 00:30:20,610 Lull must work frantically to bring in new investors, or the scheme will 418 00:30:20,610 --> 00:30:22,070 collapse under its own weight. 419 00:30:22,730 --> 00:30:27,530 He was financially under the water at the end of 2005, but nobody knew it. 420 00:30:36,780 --> 00:30:40,100 In May 2006, Lull is getting desperate. 421 00:30:40,360 --> 00:30:44,340 He approaches Donnie Maione, a general contractor in Kauai. 422 00:30:45,200 --> 00:30:51,380 Lull offers Maione the opportunity to invest $75 ,000 in a bridge loan for a 423 00:30:51,380 --> 00:30:52,380 client. 424 00:30:52,520 --> 00:30:56,860 So he says, you know, I got a client that's looking for a bridge loan. 425 00:30:57,420 --> 00:31:01,260 He offers Maione 2 .5 % interest for a two -week note. 426 00:31:01,720 --> 00:31:05,380 That's equivalent to a return of 65 % a year. 427 00:31:06,800 --> 00:31:11,900 I had heard of people in the community who had gone to him for these deals, and 428 00:31:11,900 --> 00:31:15,440 it sounds like one of those too -good -to -be -true things, but when you see 429 00:31:15,440 --> 00:31:20,380 happening over and over, I started to question, well, maybe it's a real deal. 430 00:31:21,320 --> 00:31:25,580 He gives Lull the money, but two weeks go by and Lull doesn't pay. 431 00:31:26,260 --> 00:31:31,460 For months, he holds Maione off with excuses, and Maione isn't alone. 432 00:31:32,580 --> 00:31:36,000 Claire Mortimer has been investing with Lull for five years. 433 00:31:36,600 --> 00:31:41,840 But in June, her monthly payments of $7 ,400 stopped coming. 434 00:31:42,280 --> 00:31:46,920 I frantically got on the phone, trying to call him, trying to email him, trying 435 00:31:46,920 --> 00:31:49,880 to get his attention and find out what the heck was wrong. 436 00:31:51,480 --> 00:31:56,260 By December, Lowe is suffocating under the mountain of IOUs. 437 00:31:56,740 --> 00:32:02,540 There are now more than 70 creditors demanding upwards of $55 million from 438 00:32:04,040 --> 00:32:08,180 The only way out is for Lull to throw himself at the mercy of the bankruptcy 439 00:32:08,180 --> 00:32:09,180 court. 440 00:32:10,920 --> 00:32:14,600 Trustee Ronald Kodeshiroto is assigned to the case. 441 00:32:14,940 --> 00:32:18,060 I've been doing bankruptcy trustee work for almost 30 years. 442 00:32:18,280 --> 00:32:22,720 I've never come across a case like this where I've seen people so devastated by 443 00:32:22,720 --> 00:32:23,720 a debtor. 444 00:32:25,020 --> 00:32:27,440 Kodeshiroto calls a meeting of the creditors. 445 00:32:28,000 --> 00:32:31,420 Gone is the jovial Lull investors have come to trust. 446 00:32:32,340 --> 00:32:36,760 Instead... In a packed hearing room, one woman who invested her life savings 447 00:32:36,760 --> 00:32:42,240 with Lull demands to know where her money went, and Lull shows no remorse. 448 00:32:43,160 --> 00:32:49,400 Your money was long gone by then. I paid monthly stipends to people and other 449 00:32:49,400 --> 00:32:50,480 small things. 450 00:32:51,080 --> 00:32:52,860 Do you know that you've ruined my life? 451 00:32:53,200 --> 00:32:54,200 Yes. 452 00:32:55,040 --> 00:32:59,580 Cold. Just absolutely cold in his expression. 453 00:33:00,879 --> 00:33:03,500 Attorney Bradley Tam attends the hearing. 454 00:33:03,820 --> 00:33:08,140 I recall sitting there thinking, what, am I looking at Ted Bundy here? 455 00:33:08,480 --> 00:33:13,300 This man has absolutely no compassion, and this is the one that everybody liked 456 00:33:13,300 --> 00:33:14,440 because he was so friendly? 457 00:33:16,360 --> 00:33:22,040 Seeking refuge from the ire of angry investors, Lowe flees to the mainland 458 00:33:22,040 --> 00:33:24,320 settles near relatives in Bellevue, Washington. 459 00:33:24,660 --> 00:33:29,360 He promises to help the trustee locate his assets and repay his victims. 460 00:33:30,540 --> 00:33:35,960 But the U .S. trustee's office refers the case to the FBI, and agents begin 461 00:33:35,960 --> 00:33:38,820 pounding the pavement to find out what happened. 462 00:33:39,120 --> 00:33:42,560 We go out there and start knocking on doors and talking to the victims to find 463 00:33:42,560 --> 00:33:45,620 out exactly what they were told to separate them from their money. 464 00:33:45,840 --> 00:33:51,040 Now the FBI is on its trail, and Lull is forced to trade his $4 million mansion 465 00:33:51,040 --> 00:33:56,840 in paradise for a rented room in a basement outside Seattle, Washington. 466 00:33:59,210 --> 00:34:02,150 Peter Schaefer rents another room in the house. 467 00:34:02,590 --> 00:34:05,330 He said that he'd had some bad luck in Hawaii. 468 00:34:05,550 --> 00:34:11,429 He'd lost some money and decided he would move away from Hawaii, but he had 469 00:34:11,429 --> 00:34:12,690 filed bankruptcy there. 470 00:34:13,610 --> 00:34:18,810 Lull manages to find work at, of all places, a local mortgage company. 471 00:34:19,770 --> 00:34:25,830 Then one day he offers his roommate a can't -miss opportunity for, you guessed 472 00:34:25,830 --> 00:34:26,989 it, a bridge loan. 473 00:34:27,480 --> 00:34:31,679 He told me that he was doing these loans to mortgage applicants. 474 00:34:32,699 --> 00:34:36,780 Schaefer has some money put aside for his son's college education, and he 475 00:34:36,780 --> 00:34:39,920 figures Lowe's offer could help strengthen the college fund. 476 00:34:41,580 --> 00:34:46,460 Schaefer invests tens of thousands on several short -term loans with Lowe for 477 00:34:46,460 --> 00:34:49,000 returns of up to 20 % per month. 478 00:34:49,380 --> 00:34:53,159 He felt that he was your friend. He was doing you this favor. He was offering 479 00:34:53,159 --> 00:34:56,679 you an opportunity to make some money. 480 00:34:57,580 --> 00:35:02,280 But aside from a few reassuring payments to keep Schaefer happy, that money 481 00:35:02,280 --> 00:35:03,280 never appears. 482 00:35:03,680 --> 00:35:08,620 Instead, whenever Schaefer approaches Lull about getting it back, Lull shows 483 00:35:08,620 --> 00:35:13,320 pocketfuls of opals, rare coins, and jewel -encrusted pool cues. 484 00:35:13,820 --> 00:35:19,340 He would bring them and show you and say, see, I have this, and now I'm going 485 00:35:19,340 --> 00:35:24,560 cash this in, and you will be the recipient of the rest of the money that 486 00:35:24,560 --> 00:35:26,840 you. There's just one problem. 487 00:35:27,310 --> 00:35:31,350 The jewels don't belong to him. They're assets he's hiding from the bankruptcy 488 00:35:31,350 --> 00:35:32,350 court in Hawaii. 489 00:35:34,130 --> 00:35:39,150 After several months of excuses, Schaefer does some research that might 490 00:35:39,150 --> 00:35:41,070 saved him had he done it earlier. 491 00:35:41,750 --> 00:35:44,230 I googled Jim Law Hawaii. 492 00:35:45,730 --> 00:35:50,550 Well, up pops this article that Jim Law is a scam artist. 493 00:35:51,980 --> 00:35:57,260 What's worse is Schaefer finds evidence that others are also being scammed in 494 00:35:57,260 --> 00:35:58,260 Washington. 495 00:35:58,300 --> 00:36:02,580 I made phone calls to other people that I knew that I thought might be involved 496 00:36:02,580 --> 00:36:07,460 and found out that there were, I believe, six different people Jim was 497 00:36:07,460 --> 00:36:10,040 definitely into for at least $300 ,000 to $400 ,000. 498 00:36:12,240 --> 00:36:16,120 Back in Hawaii, the FBI has finished its investigation. 499 00:36:16,460 --> 00:36:19,140 And on September 16, 2008... 500 00:36:19,550 --> 00:36:24,430 Lull agrees to accept responsibility and plead guilty to one count of wire 501 00:36:24,430 --> 00:36:25,430 fraud. 502 00:36:25,570 --> 00:36:30,610 He is to be sentenced in April, and the government recommends 12 years in 503 00:36:30,610 --> 00:36:31,610 prison. 504 00:36:34,170 --> 00:36:39,770 But Shaper is following the trial and wants the judge to know what's going on 505 00:36:39,770 --> 00:36:45,710 Washington. He flies to Honolulu to attend the sentencing hearing and takes 506 00:36:45,710 --> 00:36:46,710 stand. 507 00:36:47,630 --> 00:36:51,530 I looked at the judge and I said, you know, your honor, I don't know the 508 00:36:51,530 --> 00:36:55,730 agreement that Mr. Lowell has with the court, but I can tell you that he is 509 00:36:55,730 --> 00:36:59,930 perpetrating the exact same crime on a smaller scale in Washington. 510 00:37:00,230 --> 00:37:04,190 And the judge's mouth just kind of fell open. 511 00:37:05,050 --> 00:37:09,990 The court is shocked. The judge suspects Lowell hasn't really accepted 512 00:37:09,990 --> 00:37:13,030 responsibility and that he is hiding valuable assets. 513 00:37:13,660 --> 00:37:17,880 She delays the hearing one month to consider a longer prison term for Lowe. 514 00:37:19,560 --> 00:37:25,200 On May 15, 2009, the court gathers once again to sentence James Lowe. 515 00:37:25,440 --> 00:37:28,160 But this time, there's someone missing. 516 00:37:28,700 --> 00:37:33,280 We're sitting there, and the U .S. attorney comes in with the FBI. 517 00:37:33,820 --> 00:37:37,720 The public defender comes in, who's supposed to have Mr. 518 00:37:37,940 --> 00:37:39,020 Lowe with him. 519 00:37:39,560 --> 00:37:40,780 And we're waiting. 520 00:37:42,250 --> 00:37:46,750 and there's a lot of talking and back and forth, and then the judge comes out. 521 00:37:48,590 --> 00:37:49,590 Where's Mr. Lull? 522 00:37:51,450 --> 00:37:52,510 The judge was furious. 523 00:37:52,830 --> 00:37:56,090 James Lull didn't show up to his own sentencing, so she issued a bench 524 00:37:56,090 --> 00:37:56,968 for his arrest. 525 00:37:56,970 --> 00:38:00,110 And because I was the case agent, it was going to be up to me to try and capture 526 00:38:00,110 --> 00:38:01,110 James Lull. 527 00:38:01,730 --> 00:38:04,530 But Special Agent Simon doesn't have to wait long. 528 00:38:04,850 --> 00:38:06,790 Later that day, he gets a call. 529 00:38:07,440 --> 00:38:12,200 It was a military police officer in Yakima, Washington, who told me that 530 00:38:12,200 --> 00:38:17,160 that day, someone had driven off a cliff and fallen 200 feet to their death in 531 00:38:17,160 --> 00:38:18,160 an SUV. 532 00:38:19,340 --> 00:38:24,320 When police removed the body, they found court documents, a round -trip plane 533 00:38:24,320 --> 00:38:28,200 ticket for Honolulu, and a driver's license that read James Lowe. 534 00:38:29,540 --> 00:38:31,480 Fingerprints confirm it's him. 535 00:38:32,520 --> 00:38:37,180 Tire marks indicate the vehicle was accelerating as it left the highway and 536 00:38:37,180 --> 00:38:40,640 traveled almost 100 yards to the 200 -foot cliff. 537 00:38:41,180 --> 00:38:43,060 The death is ruled a suicide. 538 00:38:44,500 --> 00:38:47,040 James Lull, dead at 60 years old. 539 00:38:47,980 --> 00:38:52,780 He takes his alleged crimes to the grave, having never been sentenced, and 540 00:38:52,780 --> 00:38:57,200 leaves dozens of investors with their life savings completely wiped out. 541 00:38:58,100 --> 00:39:01,320 Claire Mortimer bet it all on James Lull. 542 00:39:01,960 --> 00:39:07,180 She took out three mortgages on her homes and lost it, more than $800 ,000. 543 00:39:08,460 --> 00:39:13,500 She sells her home in Kauai at a loss and moves in near relatives on the coast 544 00:39:13,500 --> 00:39:17,800 of Maine, 5 ,000 miles from the gentle breezes of Kauai. 545 00:39:18,160 --> 00:39:19,760 It can happen to anybody. 546 00:39:20,140 --> 00:39:21,420 It happened to me. 547 00:39:21,740 --> 00:39:23,440 I'm an educated person. 548 00:39:23,980 --> 00:39:30,920 I think of myself as being pretty savvy, but I got ripped off big time. 549 00:39:31,740 --> 00:39:32,740 Big time. 550 00:39:34,500 --> 00:39:39,960 Donnie Maione lost $75 ,000 to Lowe and is saddled with a high -interest 551 00:39:39,960 --> 00:39:42,660 mortgage on the dream home he built for his family. 552 00:39:43,140 --> 00:39:47,820 For two years, his family isn't sure whether they will be able to stay. 553 00:39:48,280 --> 00:39:51,700 To watch my wife and see the pain that she was in was equally devastating 554 00:39:51,700 --> 00:39:54,640 because here I'm supposed to be the provider, you know, I'm supposed to be 555 00:39:54,640 --> 00:39:57,700 man of the family, thinking that I'm going to be able to, you know, give 556 00:39:57,700 --> 00:40:01,200 something to my family here, and I fell short of that. 557 00:40:02,550 --> 00:40:08,770 Peter Schaefer loses his son's college fund to Lowe. It was about $30 ,000 that 558 00:40:08,770 --> 00:40:13,970 could have gone to this education that I certainly would have been happy to 559 00:40:13,970 --> 00:40:14,970 have. 560 00:40:15,170 --> 00:40:20,710 Leaving a path of destruction stretching far beyond the small island of Kauai, 561 00:40:21,050 --> 00:40:25,370 Lowe will be remembered as always wanting one thing. 562 00:40:25,810 --> 00:40:29,090 His goal for the day, and literally day, 563 00:40:29,840 --> 00:40:31,860 would be to scam somebody for something. 564 00:40:32,380 --> 00:40:37,120 It's what made him tick was getting something from somebody for nothing.