Escaping the Drift with John Gafford - The Unseen Strength in Setbacks with James Catledge

Episode Date: April 22, 2025

Growing up, John learned the value of perseverance early on, and it shaped his entrepreneurial spirit. Our guest, James Catledge, knows this journey all too well, having soared to great heights in the business world before facing a significant fall from grace. His story is a compelling exploration of ambition, trust, and the unconventional paths that can lead to both triumph and tribulation. Today, James shares the invaluable lessons he's learned from his experiences, including his involvement in a $180 million Ponzi scheme and the legal challenges he faced. His insights on redemption and resilience are not just cautionary tales but powerful guidance for those seeking success without the pitfalls.   Listeners will gain a unique perspective on the formative experiences that shape leaders, starting with the perseverance and communication skills honed by Mormon missionaries during their door-to-door evangelism. These skills served James well, from his early days in radio sales and the insurance industry to his remarkable rise in business. The episode highlights the role of ambition and the art of leveraging client relationships for entrepreneurial success, illustrating how unconventional paths can lead to extraordinary achievements. James also reflects on the pivotal moments that defined his career, from crucial encounters with mentors to transformative business strategies.   The journey doesn't end with his downfall; it continues through a process of rebuilding and personal transformation. Serving time in prison became a profound experience for James, offering lessons in leadership and the power of human connection even in the darkest moments. As he rebuilds his character and career, James emphasizes the importance of learning from past mistakes, maintaining financial oversight, and embracing a more cautious approach to investments. His story is a testament to the resilience of the human spirit and the possibility of redemption, offering listeners a thoughtful exploration of how to navigate adversity and emerge stronger on the other side.   CHAPTERS    (00:00) - Overcoming Fear and Building Resilience (10:29) - Evolution of Responsibility and Resilience (23:16) - Journey to Success and Independence (36:07) - Build Business Partnerships for Success (41:17) - Insurance Agency Success and Mentorship (52:40) - Building a Diversified Business Portfolio (01:06:39) - Life-Changing Experience Behind Bars (01:11:29) - Rebuilding Character After Adversity   💬 Did you enjoy this podcast episode? Tell us all about it in the comment section below!    ☑️  If you liked this video, consider subscribing to Escaping The Drift with John Gafford  ************* 💯 About John Gafford: After appearing on NBC's "The Apprentice", John relocated to the Las Vegas Valley and founded several successful companies in the real estate space.   ➡️ The Gafford Group at Simply Vegas, top 1% of all REALTORS nationwide in terms of production. Simply Vegas, a 500 agent brokerage with billions in annual sales Clear Title, a 7-figure full-service title and escrow company.   ➡️ Streamline Home Loans - An independent mortgage bank with more than 100 loan officers. The Simply Group, A national expansion vehicle partnering with large brokers across the country to vertically integrate their real estate brokerages.   *************   ✅ Follow John Gafford on social media:   Instagram ▶️ / thejohngafford   Facebook ▶️ / gafford2   🎧 Stream The Escaping The Drift Podcast with John Gafford Episode here: Listen On Spotify: https://open.spotify.com/show/7cWN80gtZ4m4wl3DqQoJmK?si=2d60fd72329d44a9 Listen On Apple: https://podcasts.apple.com/us/podcast/escaping-the-drift-with-john-gafford/id1582927283    *************   #escapingthedrift #jamescatledge #entrepreneurship #perseverance #ambition #trust #success #resilience #mormonmissionaries #sales #accountability #performancemetrics #businessstrategies #partnerships #insurance #mentorship #diversifiedbusinessportfolio #legalchallenges #redemption #humanconnection #adversity #personaltransformation #financialoversight #investments #cautionarytale

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And now, escaping the drift. I need to buy a car so I need my commissions dedicated to the purchase of a used car and I don't know what that means other than I need a car quick like because I'm not going to sell cars. In my mind I'm going to sell enough cars to get a car to go back and get the job that I think I've secured. Well, I'm there 30 days. I pick out a black Dodge GLH. I have $9,000 now in cash and a Dodge GLH that's paid for. Now, I think the car was 1200 bucks, okay?

So we're gonna talk about a nice car. And it's so loaded with dents down the side. It looks like they had a door opening contest with this vehicle because the entire side all went front and back panel in the same location. It's been jammed up a lot. Or as the or as the use car manager at Troncoli Nissan in Atlanta used to say, James Myrick, man, this car has been hit more times than Joe Lewis.

That's it. And now escaping the drift, the show designed to get you from where you are to where you want to be. I'm John Gafford and I have a knack for getting extraordinary achievers to drop their secrets to help you on a path to greatness. So stop drifting along, escape the drift, and it's time to start right now. Back again, back again for another episode of the show that like it says in the opening man, gets you from where you are to where you want to be and

Today in the studio. I got a good one guys. This is gonna be super industry interesting Not too often. Do you get to sit down and talk with somebody? That has had such a meteoric rise and such a massive flame out I mean we all talk about the ups and downs of life the ups and downs of business all of these things But this is a guy He did a little bit time went inside a little bit because he was convicted and accused of 180 million dollar Ponzi scheme and I kind of just want to hear the story of how all that stuff happens

Ladies and gentlemen, welcome to the program. This is James Gatlin James. How are you? Good. Thanks for having me glad to be here see full disclosure I screwed up the first opening that was but that was word-for-word almost exactly. Yeah Yeah, I'm a pro here James. I'm a pro. Yes, you are. That's how we do it. So let's back up man. Obviously You know, you've had quite the life. Yeah, I have you've had quite the life and and yes We're gonna get to talk about some of the negative things, But I always I was I want to try to find some positive here So obviously we talked about the show the idea is helping people get to that next level Yeah, and I believe now obviously you are a reformed gentleman You're not somebody that is still looking to do anything that could be perceived as a negative. No world, right?

And you've got you don't reach the heights you reached because you reached a lot of those heights. Yeah. Perfectly fine. Yeah. Great business doing wonderful things. Yeah. And there's a lot of good knowledge in there that you can use to help others.

And I love that that's what you're trying to do now. Yeah. I love that. So let's talk about, I always like to talk about nature versus nurture first, especially with high profile, very successful guests. So tell me about young James, how'd you grow up? What made you? It's a great question. I on my podcast, I interviewed my mother about a month ago and I learned some

things from her perspective that was quite interesting. And I asked this exact question, what was it like raising two boys by yourself? Mom was a single mom. And she gave me some insight that I guess you don't really remember who you are as a kid. You may have the memories, but who you were is not clear yet. And she said to me that as she went to go to work, I was assigned various chores and all sorts of duties around the house.

We were raised in Tennessee and my dad had left the house by age 8 for me. My brother was 5 so I'm kind of the man of the house at age 8. I'm in charge of you know protecting mom if you can imagine it and Still scared of the dark at 8 still scared of the dark very scared of the dark One of my jobs was to take the garbages out. And I remember having this psychological battle with myself, the street was probably 100 yards from the house and the garbages are out back.

Street lights don't light up the backyard. There is no lighting in the backyard and I've gotta get 100 yards at age eight with two garbage cans and I'm certain that the woods and the forest is filled with people trying to kill me. I'm sure of it. And so, I remember taking the garbages down one specific time thinking, you know what?

I don't like how this feels. I don't like the fear. The raw fear was overwhelming to me. When I got back in the house, I thought, you know what? No one else can take these garbages down. My mother won't do it. My five-year-old brother can't do it. He's physically not able to take them down This is on me to do and I remember having this thought. How do I personally? Not be so afraid physically

Trembling afraid like talking to myself loudly the whole way trying to make sure that there is anybody out here they don't think I'm afraid yeah because I'm having conversations out loud with myself but I remember actually grabbing two knives out of the knife drawer sharp steak knives and literally you know how the garbage cans are you got the handle there? I remember having a knife in each hand as I grabbed the handles of the garbages and took them down And I literally had the thoughts what I would do if someone came for me with those knives Literally had the the visceral Plan in action, and I don't think I was ever afraid again to take the garbage down and I took the knives a few more times.

Yeah. Just to make sure I was ready but as a boy I remember having to overcome personally solve that problem and it for me was a real problem. I was the type of kid that when we come home from being maybe at church or being out to eat with my mother, she would have me go in the house first. I'm eight. And identify if there's any intruders before she comes in or before my little brother. And no one's more scared than me at eight going in. Did you think mom liked her little brother more than you? Like hey, well he's five.

He's not really in a position to do it it he's thinking I don't have to run faster than the break in I just gotta run faster than my yes son so this is that there was none of us that were brave enough to do it without fear but I remember having these really visceral reactions to fear and I didn't like it I did not like how I felt I felt weak I felt consumed by it and and I didn not like how I felt. I felt weak, I felt consumed by it, and I didn't like myself for feeling that way. So I had to go through problem solving to not feel that way. And I think my life's been full of that problem solving,

presented with something that no one else can fix with me. Well, I think it's very interesting that even in a small age you realized that sometimes just changing your physiology, your physical world, just by the act of holding those knives, right, just changed the whole process. And I think if you're somebody out there that's struggling with fear of anything,

I think you just gotta find something. You gotta find that knife to put under the hand of the garbage can. That's right, that's right. You've gotta overcome it, you gotta solve it. I'll tell you one more on this same line of thinking. I was a Mormon missionary, which was a great privilege for me. At age 19, I was called to be a missionary in Santa Rosa,

California. And I remember feeling like such an imposter. This whole thing, you know, imposter syndrome, where people feel like they're not qualified for this. They certainly are not Don't know enough to do this job this task many entrepreneurs feel this way and certainly as a Mormon missionary I'm called I have the name tag. I've got the suits but inside me I am not up for this I really don't know what's gonna happen if someone opens the door. Okay So luckily for me when when I arrived, you get a trainer, okay?

He's another 19-year-old, but he's been there longer than you, so he supposedly knows what to do. Well, I had a pretty good trainer, and I like him. I look up to him. In a way, there was some admiration there from me to him. And when I got there, he had torn his ankle or had a sprained ankle or something, and we couldn't do our job for like three weeks.

We're in this apartment, and I'm basically spending three weeks telling him how good I am. If you can imagine I'm literally talking myself up talking my game up to him about how ready I am and this is 100% brainwashing myself as I'm doing this. Well the day comes we've got the ankle better and we're going to have to find out what I can do and what I can't do. And your job as a Mormon missionary is to, in many cases, knock on the doors and if a stranger, the homeowner lives there, they open it and then you begin this very quick,

weird exchange about religion and about Jesus Christ which is so personal for everybody including us the Mormon missionaries but but it's happening on their doorstep with strangers you're trying to get them to let you in that's success if they let you in we can have a there's a full-blown discussion path funnel if you will that we're to take them down well we get we lock our bikes to the stop sign we're walking the sidewalk and and he basically outlines we're gonna do this street this street and then the one behind him we're going home for lunch

and I've been talking myself up to this guy pretty much non-stop he actually believes what I've been saying about my capacity My capacity is not nothing. I am unproven, but I've talked it up So I make a decision after locking the bikes Then I'm gonna step into this it kind of own it and I tell his name is Meryl Taggart Okay, Meryl Taggart is from Coeur d'Alene, Idaho. Okay. And I love, I love,

I come to love Meryl Taggart from this experience, but I told Elder Taggart, that's what we call each other, let me take the first door. No, this is all I can do to even say this out loud to him. But I feel I need to trap myself into this experience. And so I do He says are you sure I don't mind showing you exactly, you know, which I said no, I'm ready I'm not ready. I'm filled with fear not the fear of the darkness and the forest and I don't need knives

But man, I need courage because I've now trapped myself which by the way is a technique I've come to use throughout my life trap myself Psychologically into victory and so he says this would be this would be interesting. Let's do it. We walk to the first door I'm praying to God on high nobody's home. Please don't answer whatever. I'm even knocking softly Please don't hear this in the back room. Don't answer. The curtains move. I know they're in there. He knocks louder. Like the cop knocking. He's knocking man. He wants them to open the door. He's prepared. Jesus is here. Yeah, right. The Jesus troops have arrived. So literally the lady opens with the lock, you know the chain on pulls it open and I said We are Mormon missionaries a long ways from home. This is literally

We're more this is not in the training We are Mormon missionaries a long ways from home and we'd love to tell you why we've come so far from home And I just kind of left it like that solid opening. It's literally what I said and she, I remember her slipping the chain up thinking don't do it, don't do it, don't open that door. She opens the door and she says why don't you guys come in, would you like a drink of water and I'm relaxing a little bit. I'm calming down and he kind of takes over and he kind of does the thing and he's so eloquent, he's so good.

You'd think he's 50 years old, he's so good at this. Well, that was day one, trap myself and do it. And then I felt comfortable doing the rest of the doors and I ended up having a fabulous mission, great experience in leadership, accountability, responsibility, and it changed my life. You know, I never put it together. Chris Leake is a friend of mine

and he had a massive home services business that got sold out to private equity. And he's a Mormon guy, he's from Utah. And I never put it together. He's like, oh yeah, dude, all I do is recruit former Mormon missionaries. Right when they come off the missionary. And I'm like, oh my gosh.

I'm like, they're banging on doors trying to sell Jesus. To strangers. To strangers. They got no problem asking about solar. No problem. No problem. No problem. No, you've got nothing to sell that we would have a problem

selling. Yeah, and he told me, he goes literally, he goes every home service is building a business across the country. They recruit from Utah. For sure. Right, from Utah. Absolutely.

I can't believe I never put that together. Now, one other thing you'll like about recruiting Mormon missionaries is we're trained at the age of 19 when folks are busy getting their first bar experience and getting their first tattoo perhaps and which piercing do I want next. We are trained in 9 o'clock accountability. At 9 p.m. we are to call our district leaders who are other 19 year olds like us but somehow they're in charge. We're to call in our numbers who are other 19 year olds like us, but somehow they're in charge.

We're to call in our numbers. How many doors we knocked, how many discussions we gave, how many books of Mormon were handed out. We're literally measuring quantitative activities. Your KPI is it? Yeah, it's KPI's. 100%. And by the way, we have in our pocket what they call the daily planner.

It's a physical calendar, not a digital calendar. It's a physical calendar where we've marked all these units of activity that matter, high leverage activities that lead us to what we're after, which is baptisms. People joining the church is what we're after. Yeah, that's a conversion. That's it. Literally a conversion. Literally.

Literally a conversion. That's literally what we call it. How many converts? So, we are calling in at night. We don't call in at nine o'clock what we call it. How many converts? So we are calling in at night. We don't call in at nine o'clock, they call us. If they can't reach us, they drive their bicycles or their car over to find us. This is an army of 19-year-olds who are accountable

to a structure that ultimately reports back to Salt Lake City the quantitative activities done that day around the world on behalf of the church. So this is what we're doing for two years. Yeah. Guess what they pay us? Nothing. Nothing. We actually pay for the experience. That's wild. Yeah. It was so good for me. No, so good. Anything that's, look, whatever it may be that teaches you that level of responsibility and dedication in a young age, be it the military, be it that, be it anything. Yeah.

I'm gonna get by and that, that's good stuff. As a kid, let's go backwards a little bit, as a kid, because you said you didn't get paid for that, what was the first hustle you remember you did for money? What was the first way you got money? Yeah, yeah, that's such a good question. First of all, you think of the allowance and everything and what I had to do to get the allowance.

That's easy money. I'm talking about outside money. I know. I would say fabricating my age to go work at a car wash where you literally drive, at the end of the car wash, you drive the vehicles out, then take care of the wheels in the interior to get the tip and take the ticket. I was 14 now

You're not supposed to be driving cars at 14. You told him you were 16. Yeah 16 and and I I just needed the money I needed to earn my own money mom didn't have enough money. Yeah for bills much less and I like nice clothes I wanted to wear nice button-down shirts. I saw it was a popular brand when I was a kid I wanted to wear the eyes on the and the Polo and I just, you know, my mom was Winnie the Pooh in tough skins. See, you know, that brings up an interesting point because they say that tough times breed strong men that build great times and then great times build weak kids that build tough times. Hey man, that's a fact.

So obviously you, because you grew up single mom, you know, brother Yeah, no more hustle the cart wash or 14 to buy what you want Yeah that instilled an internal sense of resilience with you So how so you had your kids pre fall, right? Your kids your kids were all six were on the deck all six were on deck like they were they were living the high life Airplanes pilots Beach houses the whole thing the whole thing. The whole thing. So how did you, how do you not raise worthless kids? It's hard. Yeah, it's hard and and I don't I don't I can't say as I sit here that we did as good as we could. You know I think looking back there's some things

we could have done even better But I will say and maybe it's through the tough Experience that we live through together. They are more resilient today Because they went through it. It's it's one thing to live in the eight million dollar house and And then move to the ten million dollar house and then move to the twelve million dollar house It's a whole nother thing to go from the $8 million house to the $500,000 house. To the apartment. Yeah, yeah.

That's a whole nother adjustment. And we did it slower than I just said it. We did it slower, but we end up there. Yeah. And my kids had to make that adjustment. I'll just tell you a quick anecdotal story to that point. Six kids, right? The youngest boy is Nathan, okay Nathan today is in college. He's in his sophomore year wrapping it up at Brigham Young University

Nathan Lived through the heart of the difficulty my litigation with the United States government lasted from 2008 to 2018 so a decade of the children's life, which is most of it. Yeah They they only know dad under pressure, right? Whatever pressure one processes when the United States of America is prosecuting you whatever that pressure looks like and however you handle it the kids are observing that and

My 18 so somehow this 18 year old boy in the middle of all this Becomes captain of his football team Homecoming king 4,000 students in the high school. Homecoming King, there's not 19 of these Homecoming Kings, okay, there's one Homecoming King. Yeah. He is the most kind, gentle, young man.

When I was inside, and maybe at some other time, we'll get into how I get inside, but I'm inside a federal prison. Oh, we're gonna get to it. Okay, we're gonna get to it. Okay, we're gonna get to it Well, while I'm inside, this is the boy who arranged the kids to come visit. This is the boy who made sure everybody was in the car This this is the kid who watched his dad not only go through it but maintain communication clarity love support and made sure

Everybody in the family knew how good dad was doing and how well dad was doing, how safe dad was, how everything was going well for dad. And I wrote a blog inside, Nathan's life got real, in a significant way, and I think it's blessed him. He is the most amazing, he'd been an amazing interview. He's an amazing young man because of what he witnessed dad going through and how he managed it. Obviously he had to make choices to manage the way he did, but those choices he made, I think changed his life forever.

Yeah, I think that, you know, obviously I didn't have the same situation you did, but my parents got divorced when I was very young. My father was an attorney in a very small southern town. Rule number one, if you're a woman in a small southern town and your husband is an attorney there, don't get divorced in that county. It's just a bad move. No kidding. Bad move.

My father was not very generous with my mother and the divorce. So we still lived in like the ritziest neighborhood of my small town in North Florida. But we didn't have any money. We're broke. And so going from that situation where, you know, you're constantly having to try to keep up

with everybody else and there's no way to do it because you're behind. I think that much the same way it did you're behind. I think that much the same way it did for your kids, I think that burned my resilience in. I think that's what made me. Yeah, I get it. That of my childhood and I look back at my childhood very fondly. I know, me too. Nobody is woven. Nobody, you know, you're like David Goggins and nobody is feeling bad for me. Yeah, exactly. But that, I think that, that less, that feeling of less than and that feeling of left wanting. Yeah, right, right.

Is what created that burning desire in me to get successful. So I think, I think that's good. And it's so tough when you are someone of success. I mean, it's the biggest fear we always have with our kids. And we're constantly trying to manufacture adversity for them. Yeah, and it is manufactured.

Yeah. Yeah. as much as we can manufacture. I mean, sports and all that stuff and everything we can manufacture, we're trying to desperately to do yeah, and do it. My kids are great. But at the same time, when they were eight years old, they had a, you know, they had an opinion on the airline we were taking. Yeah, right. Yeah. And then what seats were in? Yeah, right. Well, did Delta know why we're on Southwestern Delta? Yeah, yeah. And they Yeah. And then what seats were in? Yeah, right. Whoa. Did Delta know why we're on Southwestern Delta? Yeah. Yeah.

And they, and they had that, you know, we had a private jet for a while and they had all that stuff. And, and I, I think they're still very well grounded because I think we do, but do the best we can with them. So let's, let's somebody, cause you, you were very successful early before your trouble. Yeah. So what was the, so you went into exit into what field after, so you went into what field after, cause you went to BYU I'm assuming? Yeah, BYU.

Jocker, with a lot of jocker. Not a big surprise based on the story so far. What's interesting, and I'll get you to the first breakthrough for me. So I get home from my Mormon mission and all my buddies are headed to BYU. They're all missionaries. These are my best friends on the planet.

We've had this galvanizing experience together as missionaries. And my friends from St. Louis, he drives down in his RX-7 to Memphis to pick me up. We're loaded with clothes and footballs and shoes and we're headed out. He's been accepted to BYU. I have not been accepted. My grades in high school were too low to be accepted to BYU. I'm like a 2.8 grade point average.

But I know that's where I need to be. I need to be out there, you know, and hopefully while I'm out there, there's a way to get in BYU where you're not full-time day school, but literally you're adult night school. And you kind of start there, get your GPA up, and they'll accept you to day school. No differentiation in the quality of the credits. It just just you're going to school at night Yeah, and that worked well for me because I need to work so we get out there. I Sit with my mother It's time to leave Brian has picked me up in the RX-7

He's ready to leave and we I've not had a discussion about money, and I don't have any okay My money's been spent on my mission, and I and I haven't been home long enough to have a job yet I'm going to school and so I asked my mom I said look I'm going to school. I know you don't have much But you have anything that that I could get started with she says she says this I'll never forget it She says I have $78 in my checking account How much of it do you want? and So I know right then

There'll be nothing. Yeah, and so I tell Brian because we're planning on splitting gas money all the way out You know how it goes and then Brian's dad's a dentist So he's got the apartment rented. I'm literally sleeping in an apartment paid for by my friend. I'm not accepted into this university. I'm a total imposter. Yeah, I'm gonna figure it out.

Yeah, I gotta figure it out now. And I don't have a car, it's his car. And so I know I need to be out there though, man. I just knew I need to be there. I didn't need to be out there though, man I just knew I need to be that I need to be at home anymore. And so I literally the next day walk to the bus Get a bus route map It back then we had help hornet ads and the thrifty nickel of the newspaper

So I look for jobs that I think I can do and and I and for whatever reason I'm broke and penniless but I don't feel like I want to do a McDonald's or a Taco Bell. Just this is just me in my weird way of thinking. I want a professional job, right? And I'm broke. So I want to work at a radio station because for whatever reason I think it would be a good disc jockey.

And in my mind coming from Memphis, Tennessee, there was a disc jockey that was so famous Rick Dees yeah that I think in my mind I could be a Rick Dees and so I want to work at a radio station so I get the bus to Salt Lake City for an interview at the radio station and the guy says look you know you don't have any experience in broadcasting why don't we put you in sales? We have this long interview about sales. And I was a missionary, so this is kind of fitting my skillset.

Yeah, you're like, okay, no problem. Show me the doors. Right, this guy is hiring me basically, and I'm so excited because, first of all, there's no salary, okay? Salespeople aren't paid salaries, so this is not, you eat what you kill. Yeah, of course. This is a sales job. I nobody's telling you how much you can make either. No, no

There's no limit on what I can make I eat what I kill and and I frankly like that because there's no limit on it As you say, yeah Well, he says you've got a car, right? This is the wrap-up of the interview, man. Sure. I Said not yet And he says well, why don't you come back and see me when you get a car and so I left that interview get back on the bus and I'm thinking I got a job here I got a job here I have to get a car so on the way back I have the bus stop near Mountain Motors in Orham, Utah on State Street

Now I didn't know at the time I was headed to Mountain Motors, but when the bus stops, I see a used car dealership This is where they have cars. So I need a car I walk into Mountain Motors this place is run by Persian businessmen. Okay in Orham, Utah I Walk in and I said look guys I need a sales job to sell cars and and the guy says let me introduce you to the sales manager he introduced me he says what's your experience in car sales I said none but I'm sure I can sell them he says well okay we're hiring sales guys you know by the

way most people are hiring sales guys yeah word know, by the way, most people are hiring sales guys. Yeah. Word to the wise. Most people are hiring sales guys. And, and I said, here's, here's the little caveat. I need to buy a car. So I need my commissions dedicated to the purchase of a used car. And, uh, I don't know what that means other than I need a cart quick, like, cause I'm not going to sell cars in my mind. I was selling enough cars to get a car to go back and get the job that I think I've secured. Well, I'm there 30 days. I pick out a black Dodge GLH. I have $9,000 now in cash and a Dodge GLH that's paid for.

Now, I think the car was $1,200, okay? So we're talking about a nice car. And it's so loaded with dents down the side It looks like they had a door opening contest with this vehicle because the entire side all whip front and back panel in the same Location it's been jammed up a lot Or as the or as the used car manager at trunk calling Nissan Atlanta used to say James Myrick But this car has been hit more times than Joe Lewis. That's it That's that's literally the situation with this car And so I talked them into For For my without additional pay like they're gonna take care of this car I said I need a body shop to bang this thing out and paint it cuz I this is ridiculous

So they get all that done. So I've got nine thousand bucks in this 1200 car and it looks good Okay, I go back now now this takes a month. I go back to that guy, he goes, man I didn't think he would see you again. I'm glad you're back. I said, I've got an idea. I proposed this, now this is my first real hustle. I proposed to him that I'm gonna be going to school at BYU.

Now I'm not even accepted into BYU yet, but in my mind that's where I'm gonna be. I tell him, why don't you give me Utah County as my territory. Now Salt Lake City sits in one county, Salt Lake County, Utah County is on the other side of the mountain range. The radio station is in Salt Lake, but I want to drive up there every day. I want to handle accounts in Utah County where I'm gonna go to school where my apartment is. And he says, well we got a guy down there I said what what if I outsell him will you give me Utah County he goes well you can both be in Utah

County I said okay he says we also have some orphan accounts in Utah County that they no longer advertise with us I'll give you that binder full of orphan accounts and so what I did is I needed the history and how much they had spent and I built a chart who had spent the most Over the longest period of time those would be the ones I would start with and what I did we had cassette recorders back then I Wrote the commercial Before I do visit one. Mm-hmm, and I got the morning announcer who's famous on the radio Visit one and I got the morning announcer who's famous on the radio. Okay, Mark van Wagner was the guy's name I'll never forget this because no one knows I'm doing this and you're not really allowed to do this I get him to record the copy as though it's a sold commercial

I haven't even visited the place yet to try to pitch it But I want the commercial recorded by a good sounding disc jockey. I've written the copy. I like the copy He likes the copy, I like the copy, he likes the copy. Only people who ever approach the morning or afternoon drive-car, people who have sold ads, well he's assuming these ads are sold. I don't have the discussion about where they are or aren't. I go down and with my cassette recorder that I purchased, play these ads and I'm getting people to say, wow who produced that? I said well I had a morning guy do it. And he said, we don't even have a contract with you.

I said, not yet. I said, but I know if you see it the way I see it, you wouldn't wanna do business with anybody else. Who else is writing your ads ahead of a relationship? And so I ended up having this, Gene Harvey Chevrolet, he's my very first client down in the American Fork, Utah. And they're laying big bucks out for advertising and it's it's a it's an orphan Then I'm restoring all the orphans. So eventually I am that you visit took six months. I'm the number one guy in Utah County. I

Go back to my guy and I said my sales manager All these names are coming to me The memories of these fellas and I said look I need my clothes dry cleaned I don't have time to iron clothes he says he says here's what you do go down and get a 50% cash 50% trade account under dry cleaners I said okay so basically all his ad dollars are half in trade half in cash he goes exactly they'll do it for 50% to be on the station I said what if I do it at my favorite restaurant he says okay 50 50 I said what if I do it at the gas station so I am now he greenlit cuz isn't that kind of yeah but he greenlit you yes taking revenue from the station not only revenue from the

station but now the other guy in Utah County's got dry clean he's asking me I'm half his age he's asking where the dry cleaner is he's asking where the gas stations there's one gas station that we got to deal with yeah and the restaurants I ended up with two or three great restaurants so I am now living what seems like a six big multi six-figured income yeah cuz I read because everything's half price sure right yeah that's right and I'm earning commissions off the accounts that I'm selling full blow at. So I would say that's my first real hustle because I figured out how their business model

worked and I figured that there's an opportunity here within this. Now I'm going to give you one more and then we can shift back to you got great questions. I don't want to miss any of them. One more experience I had. So I'm selling these ads in Utah County. I go into Mako Auto Body. They fix, they do paint and they do body repairs. This is the place I have my Dodge GLH fix So I had a little time with the guys in there when they were fixing my Dodge my door problem

And so I go into the GM of the place and I said hey look you guys aren't on the radio You should be on the radio. He goes Radio he goes he goes what are the odds? We're gonna be on the radio and run into the guy who had an accident and that guy's going to happen to listen to the ad and bring it into Mako. That's that's that's not going to happen. And I said, okay, it dawned on me. When he said this, I said, what are you doing right now for a customer?

How do they find you now? How do they find you right now? You've got leases, you've got employees. You've got This big building. I said there's a lot of expense going on Are you just hoping to God they find you and drive in here with a busted-up car? He goes kind of I said what if I Could provide you a list weekly. No, I I don't really know where I'm gonna get this list yet What if I can provide you a list weekly of everybody's been a car accident in Utah County weekly

You said that be kind of right at the target of what we're looking for I Said well, I don't want to talk too much about where I would get a list because I don't know Talk too much about where I get a list like this. But what kind of value is it to you? He goes it'd be my whole ad budget. I said I need to know a number He said well, I'd be willing to spend five six thousand a month on something like that. I Said I wouldn't make this exclusive to you. There's other people who need a list like this He said eight thousand a month and you can't use it with other repair shops, but body people I said for eight thousand I'll do it

Now my little brother who's living with me figured out James is making money. He's got dry cleaning To live with me. I pay him $25 a week to go to every police substation in Utah County and just get the reports and print the reports And pay them if they need printed copies I now have a binder and my girlfriend is good with the Macintosh She builds me we make up the name and trust listing services. We literally build the list contact number It's all in the police record Yeah, the whole thing I delivered to him and I said look you do you can't have this without the eight grand

And I'm gonna bring it to you every month I'm gonna bring you four times a month the list, but every month you pay me eight grand And he says I'll take this every month of the year all year every year So I'm selling ads, but this little thing dawned to me by listening to this guy I'm hearing this guy explain That you're hoping to hell that somebody walks in here needs a thing. We know who gets in car accidents We know who needs their car repaired and so I built like an email for them that they could send out with a discount Letting them know that sorry to hear about the accident

out with a discount letting them know that sorry to hear about the accident we take all the insurances and we're happy to bring you over in our town car to and from if you've got a problem we'll tow the vehicle nope so basically I find out what he's willing to do I write it in kind of an email for him to use for that list and we're hitting that list and he's got more business than he knows what to do with I ended selling it to a personal injury guy and a chiropractor. See, I'm gonna take it one step further. Tell me.

My favorite technique in business anymore is I call it the Tony Soprano, which is this, which is if I wanna build an auxiliary business, I'll bolt onto something that we do here. Sure. I'm gonna say, okay, cool, you can do this, and then I'll go get the best person I can to plug in that already has this existing business.

Yeah. Yeah. We flood them with customers. And then at the end of six, seven months, I asked a very simple question. How much of your business is our business? Yeah. And when that number tips North of 50%, well, I'm going to be your partner now. Yeah.

Right. Now we're partners. And that's how it's gonna be. Because, you know, once you get somebody so dependent on that source of business. 100%. They don't have a lot of choice. It's like, listen, I'll bring you more

and we're gonna do this, but we're partners now. Absolutely. That's how it works. It's just Carnegie Rockefeller moving the fuel around the train car. Yeah, exactly. Exactly, it's the exact same deal. Oh my gosh, the men that built America might literally

should be required, required education. If you're reading a history book, you should watch those videos. Watch those videos. The men that built America for every kid in South America. 100%. Absolutely. I can see them having that discussion right now in Carnegie's office.

Yeah, should be absolutely well. That's great. How do you go from that? Right, cause you made a million bucks at 27. I did. Million a year. Million a year. Not a millionaire bucks at 27. I did, million a year. Not a millionaire, multi-millionaire, but million a year in cash flow.

Yeah. How'd you get there? We wanted to take you from the radio station? Okay, so I end up staying in Provo, working my whole way through college, and I'm making, I'm driving a random Infinity G20, I'm making good money in college. I'm a six-figured guy in college, okay?

And college is boring beyond belief. I'm out earning the professors, and for whatever reason, as a kid, that mattered to me. Like, I've taken lessons from guys I'm out earning economically, and they had such a jumpstart on me. I just, for whatever reason, in my little arrogant mind, that mattered to me.

And so I end up getting offered a job by one of my advertising clients, Miracle Ear Hearing Aids. OK. So Miracle Ear is a franchise system. And the guy's name is Barry. He's spending lots of ads on our radio station. He says, I own five locations in Las Vegas.

He says, I would like you. Now, I'm 24, 23, 24, wrapping up my college. He says, I want you, if you'll do it, to manage all five locations. I said, I don't know anything about audiology or hearing or I don't have any credentials in this. He said, this ain't about credentials.

This is about selling hearing aids. I said, well, I'm not, I'm not interested in selling them. Which have a massive markup. Yeah, they're huge, huge markup. I think our parts were two or 300 and we're selling about 18, 1900 per year. Yeah. Cause to hear again is pretty powerful.

Of course. To hear again. So I said, just tell me where the licensing is on this stuff. And do I need some type of medical credential? I mean, what are you talking about? Nope. So basically he explains all this to me, drives me down and everybody he's employed is like triple my age. Like these people are all like dad, could be my dad or granddad. And I'm thinking you want me to manage these people? I'm literally right out of college. He goes no, you know more than they know about sales he goes absolutely you need to be energy these people I said and you're going back to Salt Lake to run your franchises I'm just loose down here with

your people he goes exactly so this guy put huge trust in me I was already making I think 130 was my last year in college I made 130 plus ago it's free trade so it's it's almost like 200 grand in lifestyle. And so I need to make that. And what year is this? This is... Yeah, by the way, it's a while ago. 1991 I left BYU. Okay, so 1991. So I moved down here to Las Vegas where we are and I take this job. I signed a one-year agreement with him. He's giving me a bonus on every hearing aid, a six-figured flat salary, 100 grand flat, 83.33 a month. I remember the checks, 83.33 a month.

And then I want to say it's like 65 bucks on every hearing aid, every year. So there's a huge incentive for me to go store to store, making sure hearing aids are getting sold. And how are you testing? How long is your testing taking? What are you saying? So I'm literally having these older fellows explain to me their process, which they didn't like. It just seems too young to come at them like that. So I'm literally having these older fellows explain to me their process which they didn't like, you know

It just seems too young to come at them like that But I did understand the business dynamics of it and the business model. The other thing that helped me a lot is Working in radio sales. I had to understand all these businesses and how they made their money and how they got their customers I did intuitively understand to write their ads like what is their customer? How do they get there? What are the dynamics? What are the profit margins on their products? I had to understand all that about all those businesses. And so in a really weird way without planning it, I end up becoming pretty knowledgeable about how businesses work. Well, you became probably an expert through the copywriting process of finding pain points. Yeah, right. And being able to really provide quickly solutions to those pain points that were very appealing to the masses.

They responded to it. Yeah. Yeah. And by the way, when you're spending money... That's what a great copywriter does. Yeah, that's exactly. And that's what I was. I was writing copy. And what ended up happening was the people who make the decision to spend money off the balance sheet is the owner of the business, okay? There's rarely a staff member making a decision about how much we will spend of our balance sheet money in this discretionary way. I usually end up meeting with the person who it matters most to. This is not like delegating to someone else to spend someone else's money. So I end up in these conversations and they really in a weird way mentors

All these business owners in a really shadow way Mentoring my young mind about how the world looks how businesses should look how they could look good businessman bad businessman I'm able to observe that quickly Transactionally, so when I moved down here, I understood the hearing a business intuitively I've been writing this guy's ads forever and and he is a mentor to me a friend and a mentor. I do it for one year I'm really bored. I'm bored. I'm in Montgomery Ward's. I'm in Sears. I'm in wherever our locations were we had a freestanding location over here in Tropicana and Pecos and That's where my office was. It's dude

I could tell you because I don, because I had an insurance agency that specialized in Medicare supplements. And when you're a young guy, when all you're doing every day is sitting with people that are 40 to 50 years older than you. Yeah, man. It was tough. It was tough. And they can't hear you.

Yeah. And they can't hear you. And they can't hear you. Right, exactly. So you're yelling all day. And the wives always can hear, and the men usually cannot hear that That was the other dynamic. That's my choice that may be something they worked out. It's my choice, right? What was it? There was an old couple on like sort of the late night cup

It's one of late night shows and they said what's the secret to a long marriage and he's like what he goes. I'm sorry He goes I can't hear very well and she doesn't see very well and And he goes, I know, what's the secret to a long marriage? And he goes, I just told you, I don't see very well and she can't, or I can't hear very well and she can't see very well. It's the perfect combination. It's called chemistry. Yeah, she can't see me anymore and I can't hear her anymore.

That's great. That's it. So I do that for a year. I'm attending church, still in the Mormon faith, and my bishop is an insurance agent general manager He's like a GA general agent for an insurance agency I don't know anything about insurance. It sounds like a scam. We didn't have any as a kid my family didn't own any insurance I don't quite understand the dynamics of paying premiums for

75 years and hoping that when you're gone, some stranger's going to deliver a check to your family for half a million dollars. The whole thing sounded scammy to me, but I like this guy. This guy's a mentor really. This Mormon bishop, his name is Chris Zockel. And I say that because a lot of people in this town know Chris. So he, as a bishop, says to me, James, you'd be very good at this. And I thought, man, I don't know. I may have to hold my nose and jump in on this. And I

don't know. I got a good gig where I'm at. He says, listen, we've got a proficiency test that the CEO of Beneficial Life has designed. Every agent has to take it. Just let me give you you the proficiency test and it will tell us both whether you would be proficient at this. Mm-hmm Strangest questions I've ever been asked. I mean strange questions. So I go through this whole thing. He calls me He submitted this thing. It takes a couple weeks to evaluate in Salt Lake City. They send it back He says let's get together. I want to go through your proficiency test. He says listen I've scored 60 70 guys that have worked through the agency over the years, never seen anything like it. I've never seen anything like it.

Your score's off the charts. It's higher than mine by like 10 points. And he's the boss of the agency. I said, well, what does that mean? Because I do not, at this point, the way you've explained insurance, I don't like it. So what does that mean to have a high proficiency? It means you would make a fortune You you yeah, you're whatever's going on in you is dynamically designed for this

sure, and I just believed him and I was flattered by the comments and He took me under his wing taught me a state planning seminars Where he runs a an ad in the local newspaper back in the day. If you were over 65, you read the newspaper and these flyers were for living trust seminars. Come for a free lunch. Yeah, come for a free lunch. And so I was pretty good public speaker

and he was very good because he's a bishop. He's very eloquent. And so I would sit there and take notes on how he did his one-hour seminar. And then they would fill out a little lead card at the end. What was interesting to them, what they thought was they should do differently, and could he contact them? It was a little lead card.

I would gather the lead cards, make them feel welcome, thank them for coming, and let them know I would be the one back in touch with them. That was my job in the relationship. I'm the one that runs all these people down, sets up appointments for the boss. So we knew this for a year. And I think just on my split with him,

I probably made 100 and a half, just on the splits. And I couldn't believe the money involved in financial services. I was shocked because we've got a lawyer doing the living trust work. We're doing the estate planning work, which is basically life insurance planning and massive front end first nine months, a lot of money. Yeah. Massive front end commission. Yeah. They, they small residual, but massive.

Yeah. They pay almost the whole first year premium out and commission 20% in some cases. Yes. Yes. And so I'm not into that juice because he's the boss. I I'm just an agent, right? You're on the, you're on the, into that juice because he's the boss. I'm just an agent right you're on that You're on the you're on the producers. God. Yeah, exactly So I say to him hey look I got a lot of guys from my mission that want to work with me I I said is it possible for me to bring them to the agency and I just need you to tell me what you make On me as a percentage and then if you'll percentage. And then if you'll disclose that to me,

I'll split it with you. It's your agency, it's not my agency. So I will train them. I will take full responsibility for training them. And I was a great trainer as a missionary, so I knew how to train people. And I've been doing this a year. So I've made enough money that I know how to teach this.

I said, just give me half your split and I'll take care of the guys. So we do that. I hire five or six guys. They get a lot of money now. I'm making about 300 grand. Uh, we're, we're now three years into this and I think I made 388 my last year with him. How many agents under you? Six. Just six? Yeah, six. Dude, my guy Sean Mikey came here a couple weeks ago. Yeah. He's in Miami. He's got life insurance.

Yeah, yeah, yeah. He's got a thousand. That's FFL. He's got a thousand agents. Yeah, yeah, yeah. A thousand. Well, we're going to get there. We're going to have more than a thousand.

We're going to have more than a thousand in a second. Okay, all right. All right. So just to give you an idea with one company one company I made 59 million commissions. Okay, that's that that's one company gross commissions over 120 million paid to me personally Yeah, okay When we look at the other now this that those are commissions paid to me not not some gross number We now cut into that. That's that's the number that's on the records with me

So I figure out with Chris splitting his number that I'm good at this. I'm good at leading people I'm good at teaching people I can make complicated things simple to understand intelligible and so I Tell Chris I want my own agency Could you help set that up? I figure he's going to get some juice on that. No. No is the answer.

And so I don't know. That takes me months to figure out that he's not helping me. That he's working the back channel against me. So I call Beneficial Life the headquarter. I'm the number one guy in Beneficial Life. You say I'm going to bounce. And I didn't even know to do that. I didn't even know to do that. I didn't even know to do that

I'm still Tennessee Mormon missionary loyal. I don't know this. Yeah, I'm an Eagle Scout Yeah, I don't really know how to do that kind of stuff. Yeah. Yeah, so I yet I Called them and I said look I Would like to have my own agency and I'll move wherever I'll move to the Midwest. I'll move Northeast wherever you need me I'll do it and they said well Chris has to sign off on it And we've been asking him for about nine months to sign off on you because you'd be an incredible General agent we know you would be James. I Said we mean he's got a sign off on it. You guys don't make that decision as a company

He said we don't because he hired you brought you in he gave you the proficiency test He in a weird weird way owned you. Yeah, he brought you in. He gave you the proficiency test. He in a weird way owned you. I said, well, I said, here's the deal. I said, if that's the case, I can just tell you now my days are limited here, I'll find another way. And they said, we don't wanna lose you. I said, well, then figure it out. Get Chris to do what he needs to do.

So I go to Chris, now by the way, Chris and I are still friends. We had breakfast the other day. Chris and I are he needs to do So I go to Chris now by the way Chris and our store friends we had breakfast the other Chris and I still very very close Yeah, I love Chris But this is a this is well. He's looking at it like it's business it is and it is it is I totally respect his position here Yeah, but but this is a young ambitious entrepreneur and and I promise you if that's who you are You can't let stuff like this stop you you can't let this stuff get in the way yeah but let me ask you a question yeah that situation please this is where Chris screwed up right would you have done a deal with Chris where you got to be a GA and paid him a 25% kick not 25

but I'd have worked out a deal with him yeah and you've been happy to do it been easier you'd have been happy to do it happy been easier for me to do that I You'd have been happy to do it. Happy. Been easier for me to do that. I'm married now, I just got married at this time, at this age, and she didn't want me to leave. I just stayed. Yeah, but my point is, like, dude. You can't cut the deal. You can't be greedy.

Like, you don't get to keep it, like, here, over the years. We have amazing people that work at our company, right? And we've had over the years some people that split off and want to go do their own thing Yeah, I want to go up in their own company. Yeah, like man. I wish you well, it's hard. Yes It's really hard, but I wish you well because that's the nature of the BS. And I think if you start trying to you know You know, I always ask people I want to leave here I go I go is it about money or is it about a dream? Yeah, and if they say it's about money, I go then don't do it. You're stupid. It's like it's gonna be really hard Yeah to make money doing this in this economy if it's about a dream if you've always had a dream down your own shop

Yeah, go do it. Yeah, and you're relentless. Go do it. Yeah, good. Sorry, but just no no no that that's that's right Oh, but you're crying you get your own agency of it eventually Well, here's what I do. I I let Chris know we we you either cut me loose or I leave one way the you know, I'm leaving it anyway, and he says I Just can't do it. Hmm. So I Did the hard thing I went and found a office to lease I? Take the receptionist who's at Chris's office with me Elizabeth. She's my receptionist She's been processing my apps doing my paperwork So if I leave she leaves my six guys leave I tell my wife we need desks in this empty

Cavernous space that I've rented Need one for Elizabeth. I need one for me and in the six guys So we buy office Depot desks that you have to assemble my wife spends a weekend assembling desk with an Allen wrench Those desks get all set up. We're now running an agency. I don't have a contract yet. I Have a logo. I have a brand. I do not have a contract yet So a guy that I really admired who worked for Chris and had left maybe a year prior, went out on his own.

I go have lunch with him. His name's Scott. You may know this guy. Scott Childress is his last name. They're familiar. Scott Childress was a baseball player for the California Angels. Rebels, California Angels,

and then he's at Zockels Agency, and he's very good. Okay, very good So I said to Chris I need a contract. Who are you using? He says oh, I've got your contract. I know what you need to do. I Said tell me what would tell me what you're doing and and I'm at this point I don't just follow people around. Yeah, it did at this point at my life, I've seen enough, been without enough, I keep my own company. That makes sense.

I take data very rarely and moved, if I'm headed in a direction, it's hard to move me. So I'm basically investigating Scott's idea, but I do need a contract. And so he says, listen, I'm basically investigating Scott's idea, but I do need a contract and So he says listen. I'm with a company out of Atlanta, Georgia called the world marketing alliance Said never heard of him, but it sounds real cheesy. That's why I said world Marketing alliance I said it sounds like Amway What what are you talking about and that nothing's more disgusting to me in my mind at this age

than some type of MLM stuff, okay? I'm a licensed guy, I'm professional in my head, dry cleaning, okay, so in my- It's mid-90s, that was the way of the business, Primarica, that was the way of the business. It's all over the place, and I'm disgusted by the idea of it, and this is just my little arrogant way of thinking Okay, it's not right. It's just the way I'm thinking. Okay, so he says world market alliance

You'll have your own contract with all the carriers We've got lots of technology lots of tools lots of software and I'm thinking okay that sounds great split Yeah, yeah, and and I said I did ask him I said how much do you make on my efforts? He goes well if you do nothing, I did ask him, I said, how much do you make on my efforts? He goes, well, if you do nothing, I make nothing. But if you succeed, you'd be a first generation manager to me. And he says, the great thing, James is you can build your own general agents. And I thought, okay, that means I'd never lose a James cat. If I find one, I don't have to lose him for his ambition.

He can stay. It's so that was very appealing to me. The idea that I could hire someone with my mindset, my skill set, and then never leave. And so I go on. It takes me about eight years, but inside that culture, that's where I made $59

million with that one company. Okay, now if you want to know how it ramps up, now I... Why, we can't, we're gonna run out of time. We gotta skip ahead here. So you're making a truckload of money with insurance. Truckload of money. Truckload of money, everything's fine. I'm gonna make it a truckload of money.

We gotta get to it, we gotta get to it. How do you go from your, you're so incredibly, you're killing it in insurance. You're crushing it in insurance. You're crushing it in insurance. Yep. How do we wake up in a Ponzi scheme? We didn't just wake up in a Ponzi scheme, and it was not a Ponzi scheme,

although that is the journalist view of this. Here's what happened. World Market Alliance is sold. My mentor, Hubert Humphrey, sells it to AGON, a publicly traded company. I stay around one more year, we rename the company World Financial Group. I leave... Better name. I leave, yeah definitely. We leave, I leave World Financial Group, take about

300 guys with me. They write me a check for several million dollars because they're gonna keep the rest of my guys and now I sign a non-circumvention on the rest of my guys. I'm not gonna take them. But I do have 325 that left with me. I start my own company. I now go get my own contracts. Agon provides me with one of my contracts, by the way. And I end up recruiting 8,000 agents. Not direct, but through my organization,

I have 8,000 licensed guys. We are selling, you just cannot imagine the volume of transactions that are happening. But how do you go from there? I'm getting there, I'm getting there. I have a real estate, everybody, this is back when your housekeeper owned three rental properties.

Okay? Sure. Okay, we all remember this, right? Everybody owned rental properties. We have no real estate to offer inside our portfolio none We're insurance. We're annuities mutual funds. There's no real estate. It seemed like an omission So I tasked my CFO to go find us real estate. I don't want everybody to be with century 21 It's a conflict. It doesn't make sense to get them all real estate license. We could lose half our guys I said find us an opportunity to offer real estate to our clients so that we have that in the quiver he

brings me a father-son developer team out of the Dominican Republic they pitch us on their existing hotel operation they want to turn into a timeshare operation now they're gonna leverage their existing paid for hotel they're going to leverage their existing paid for hotel. They're going to create timeshare fractional interest in it while they build out a new property and then we're going to leverage fraction that one and build out a new property. So we're going to build three properties. The brand we're operating under is Maxim. You know the men's magazine Maxim.

This is our partner in branding. This is just the real estate side of my business. Okay, my guys are offering a anywhere from fifteen thousand three hundred thousand dollar Condominium fractional interest in the Dominican Republic on the ocean called the Maxim bungalows So if you're googling this Google Maxim bungalows Dominican Republic. That's our property. For five years we sell 180 million dollars worth of condominiums on the ocean in the Dominican Republic. In the sixth year, my partner and we all money's flowing beautifully. I'm paid, company's paid, my clients are being paid Every everybody's winning in the sixth year is 2006-7 the world's turning upside down economically yeah, okay Vegas specifically

Money is less available people don't have 401ks IRAs. They're there to be in depleted There's less money to borrow less liquidity in the market My partner says you've got an increased cash flow here so we can finish this third property I said, what do you mean? We're selling these units in your you're basically taking the money Assigned to room 101 and building it that what do you mean? We need to increase the capital He says I'm telling you, Catledge, that's the way he spoke to me. I'm telling you, Catledge, father, son,

you've got to increase cash flow or we have a problem. I said, well, what could be the problem? We've got two finished hotels that are paid for. We're in the middle of the third. Cash flow is tight, but we're selling the units as we go. The clients have contracts. And by the way, the largest law firm in the world, Greenberg Taurig, is paper and all this stuff. So this is all vetted. Everything's legit. There's no schemes that I'm aware of. He says, we're going to run out of cash flow, and I'm not worried about you, and I'm not worried about your people I'm not worried about your people I'm worried about the clients I said well you have to pay the clients they bought

the units so it's not constructed yet you have to pay them their dividend that they're due until the things constructed he says we're not gonna be able to do that so my clients don't know anything about the Dominican Republic except for me leading them there sure they couldn't find it on a map, except we took them there. And we did take them all there. And they're all going there to do the transaction. I meet with the largest law firm in Nevada here who is my lawyer for my company and my business dealings.

Lionel Sawyer Collins is my firm, right downtown Vegas here. My attorney says to me, I'm concerned your partners are not using the money the way you think they are. Yeah. I said, well, what's what's your legal advice? He said, I want to meet with their attorney here in my office. We bring him up from Santa Monica. They meet together at the end of that meeting. My guy comes to me says, I'm so glad we got that on the record. I made lots of notes. You're involved in a crime, an ongoing crime. He says, I've got all the notes on it.

The guy basically explained that they're taking new money and using it to pay old obligations. That is the definition of a policy scheme. I said, okay, so what do we do? He says you need to sue them and get a receiver appointed to the property so they don't further diminution the damage to your clients. So I do. I pay $1.3 million to a law firm in Miami, Florida

that my attorney helped me select to sue in the Turks, the Dominican Republic, and Canada, where these guys are from, in Federal Court Miami. I spent 1.3 million, 644 clients are in this lawsuit. We're all plaintiffs. My salespeople are in this thing because we all own these units too. My wife and I, my mother, all of our friends, we're all in this stuff. We own these condos. The judge says after nine months of pre-litigation in the court, pre-trial stuff, he says, I'm closing the resorts, we're turning them back to the bank, and you guys need to sue separately

the salespeople and the developer. Don't just sue the developer. Judge instructs my 644 plaintiffs to put the target on their salesperson, which is not me necessarily, but I'm running the company, and then name the company. So I now have 644 potential lawsuits, individual plaintiffs who have a claim that a judge has suggested they have. So this turns into a nightmare. SEC, IRS, Department of Justice, all the windbreakers decide they need to take a look because the judge has suggested this.

They take a look, I tell the FBI, I meet with the FBI, and I let the FBI know, hey listen, I'm available for as long as you need to meet so you understand everything that's going here on here the moves I've made the moves my people have made so you understand the products we sell you I'm available for whatever you need we meet for 14 hours against the counsel of my lawyer he said he says don't don't ever meet with him don't ever meet with him because they they will figure out how to create a case if they don't have one yet. But I just felt like they needed to know how it was all working. I just felt like aiming the missiles at me would be inappropriate and certainly disproportionate to what really happened. And so I wanted to be helpful. Well, I didn't understand that cooperation means

you've gotta say you did something wrong. Confession. It means you, yeah, you have to say you did something wrong and then we charge you and then we go lenient on you while you help us get the other guy. I said, I will never do that. You're talking to the wrong guy. I have nothing to confess. I have nothing to confess.

I have nothing to admit to. There is not an email. There is not a BlackBerry. There's not a text message. There's never been a smoke-filled room. And oh, by the way, if you think I'm the dummy, you think we got in a room and decided to split the dough and I would take 20% and he would get 80?

You met the other guy. You think I'm the 20 guy? he would get 80? You met the other guy. You think I'm the 20 guy? Yeah. Okay, so this is the discussion I'm having with the authorities. And I said, Look, I was paid pure commissions. That's what I've always been paid. My guys were paid pure commissions. My clients were paid the returns they were promised all by paperwork by lawyers. I will never admit to something I did not do under any circumstance. Well, seven years into the tenderization of the United States government, the process,

my attorney convinces me that the crime that they will likely convict me of is worth 28 years at a federal prison Thanks, so you can either find a way to find something you did wrong That is a crime so that we can plead guilty to it or we Go in and hope we don't gamble on 28 years. And I said, I did nothing wrong. There's no evidence. I know what went down.

There's plenty of, I own this stuff. I own this, I have contracts where I put my money in this stuff. My mother's in this stuff. If this is about facts, if this is about truth, there's no case. If it's about anything else, they could probably win. If it is about truth, there's no case. If it's about anything else, they could probably win. If it's about a narrative, if it's about rich guy versus poor guy, I'm going

to lose on the rich guy gamble. He says, well, let's face it, James, you got all your money. You're paid 36 million directly. 36. These folks may live in a cardboard box now. You're going to put 13 of them up on the stand with Kleenexes. You got an airplane with pilots. Your handicaps five. You've played Augusta National. You've been all over the world. So it's going to be hard for a jury to believe you didn't know something that you didn't know. Even if you were willfully blind, that's a crime. So we get into all that and, and in the end, two weeks before trauma attorney says, let me go negotiate a deal for you. You must let, don't be delusional here. Don't be arrogant.

Don't be delusional. And I'm telling your audience, I'm telling you right now, I don't care how smart you are, how sharp you are, how clear you are. I want you to understand you can be convicted of a crime tomorrow afternoon if it's the government's wish to do so. So don't be arrogant, don't be thinking you shouldn't have gotten in, shouldn't have got yourself into something. There's nothing to get into here except real business, okay? And everybody that's in real business could

be taken down tomorrow afternoon if they're arrogant enough to be someone to do it Yeah, it's all about what they would like to do in the narrative They can create with a jury and in my attorney so what did the jury end up giving you? Or what I didn't I didn't end up going out this convinced by my lawyer to plead guilty to one count of mail fraud Which was how long? I of mail fraud. Which was how long? I pled guilty to a five-year cap, meaning no matter what the judge says, I cannot be sentenced to more than five years. So that's what I agreed to. And mail fraud has up to 20 years in the statute, but I wasn't going to be open-ended in my plea. No. I pled to a cap of 60 months and I went

in and told the judge that I felt horrible about what had happened. This is called your elocution. Horrible about what happened. I had no intention whatsoever to harm anybody. I didn't need to harm anybody. There's no motivation for me to harm anybody. I would have made more money had the project continued forward with no harm. But we find ourselves in a situation where responsibility has to be taken. I'm willing to take it. I'm willing to do time on it. And so I I pled guilty to one countermail fraud and allowed allowed myself to be sentenced to 60 months in a federal prison, and I was very blessed. What happened to your personal finances?

Did they come get, did they attack your personal finances? They don't come get them. You use them to defend yourself. You end up in eight years with no cash flow, living. Did they hit you for restitution on all this? Sure, sure. Yeah, I have a restitution agreement which I honor with the US government

which is a manageable situation which anybody that's got restitution, it can be structured where it's manageable. And I have one and I honor it. But I did 14 months is the bottom line. That's what I want to get to. I did 14 months inside and and I will be honest If I compare my mission to those 14 months those 14 months changed my life forever the guy I am right here today

could not I Like me today. Yeah, okay now like me then too. I was happy guy you made me then you you'd like me then too. I was happy guy. You made me then you'd like me then but I have a depth of compassion and sensitivity that simply was turned off Prior to going inside. I don't know when it got turned off. Maybe got turned off as a kid yeah, when dad pulled out, but it got turned back on inside and And I was able to help a lot of guys. They changed my life I made a difference. I had influence on the yard and

You lead wherever you go, by the way, I don't care if you're inside outside you leaders lead And uh my life is for I am friends today with a fraternity of brothers Some guilty some not most are and it doesn't matter inside. It doesn't matter. And that fraternity to this day is important to me. They'll call out of nowhere and I'm there for them. And I would never met these men. I've never been in their neighborhoods. I'd never known them. And many, many very high net worth, very successful entrepreneurs also inside that there's a lot to learn. So what's the focus now? Well I'm a consultant today in the very

space that I had all my success in. I helped several local financial services firms and in some that are national. I've developed a piece of technology that's quite profitable, subscription-based model that scores clients on their retirement readiness and tax efficiency, AI-based subscription model for financial planners so that they've got my brain in every appointment. So if they're sitting with someone and they're maybe new

or maybe have a lot of experience, literally the AI was inferenced on me. It was trained on me and how I would handle an appointment, what I would do, what I'm looking at, the questions I would ask. So that's what I'm doing today. That's what you're doing today. When you, when all of this kind of came down, right,

and obviously your whole life changes in an instant and goes the other way, a lot of the people that you, you know, thought you were doing right by me, and dude, I have a similar, look, I don't have a hundred and eight million dollar problem, but I had a million dollar problem where I had taken money from my friends and family

and people that I knew. The investment. The investment in something that wound up not being what it was, and I ended up having to pay it, I paid it all back, because I didn't want to have that. Luckily, I mean, look, a million dollar hill is, 180 million dollars is a lot different than a million.

And since then, you know, like, I have a friend of mine that's doing a very good business right now. He's got a very good business model, it's very smart, it's very sharp, and I was supposed to get in as an investor to it prior to them doing a Series B fundraise. The problem was the valuation that I was granted would have not been the valuation Series B was being offered at, and it screwed the deal

up a little bit. And that's fine, I get attorneys getting away with things all the time. But he hit me up now, came back and was like, hey, and this is a good friend of mine, I believe in this business, it's a good business. But he said, hey, could you put it out to your people and see if they want part of the Series B? And my response was, bro, I can't do that because I will never again raise money for anything that I don't have total control.

I totally agree. I just won't do it. A wise position to take. Yeah, and I love him and I love the business I was gonna invest in this phone, but yeah, I just won't do it totally I was nice because of this I was naive to many things there and I'm not blaming Anything that went on to naivete, but I did not know enough about cash controls on a real estate venture To be that deeply involved

I was the I was this basically their sole source of capital and we were very proficient at our part of it. But I too proficient to not know enough about the other side. Yeah. I just didn't know enough about the other side. I think too, if you look at that time, if you look at that time, cause I was in real estate at that time and you look at how fast everything turned upside down, everything was going so fast. Yes. Yes, you know I mean no income loans and nothing was getting vetted. I just in a deal and just I yes Hey, I just made 50 grand in this house. So let's just buy that one

It's just everything was going so fast correct on every that's the error every scale you look at Yes, you look at you know, I at the time during that boom time right when I first got in real estate I was selling there was a company here in town called Sunvest that was doing one of some condo conversions all across the country Yeah Yeah and we would just go to these real estate shows and like San Francisco and just stand in front of the room and then just Literally present five projects. Yeah, and then sell 200 condos. Absolutely like 300 grand on needs everywhere and then two years later Yeah, I'm sitting in Vegas selling those units that I was selling for

$350,000. I'm selling them as foreclosures for 40 grand, 30 grand. It was crazy. And it just, you know, so look, I'm not going to fault you for going as fast as all of us did at just a much bigger scale. Yeah. I just, because I was, anybody that wants to throw stones at you at that time,

I was in the, I was living it then. Yeah. We were all, we were all running fast. And that was one of many things we were doing. We were still running the big financial services firm. This was a division of that company. This was extra money for you. This was extra.

It was an exhilarator. It was extra. Good Lord. And we were good at it. They loved us. They, and you know what? I don't know know how much it made me think this goes on a lot And we just don't know it as long as the project finishes nobody asked the questions see I think skimming goes on a lot I think of all these big buildings that get built in my mind

I'm thinking there's probably guys like me that raise the funds to build these big structures And the guys building and have everything padded and invoiced way beyond reality And this thing's getting skimmed on the whole time as long as it gets finished Nobody's got the questions rule rule number one of any construction project is never let your contractor get ahead of you Actually ever that's it ever let him get ahead of you Yeah, I don't care if you're not your bathroom or you're building a high-rise. You never let your contractors get ahead That's exactly right. Ever, you're always building incrementally

in arrears to the work that's getting done. Correct. The only thing you're ever fronting is material. Exactly. That's it. So let me ask you one more question before we go, just because I think this is something that a lot of people, like this whole story, right,

the thing that I think probably we didn't talk about that I find that I want to understand is the reputational collateral damage that was taken great question right like how did how do you deal yeah with somebody at your heart that you feel like you're doing the right thing you're just trying to do yes yes you're crushing yes you're doing this but everybody around you is making money yeah you feel like you're doing the right thing and then all of a sudden I gotta believe especially in the circles that you're doing this, but everybody around you is making money. Yeah, you feel like you're doing the right thing and then all of a sudden I gotta believe especially in the circles that you're in with that tight-knit church community. Yeah, right. You are a pariah. Yeah. Yeah, let me let me deal with this because this was hard

It's such a great question. This is a great question. Let me once it's destroyed and it doesn't take long to destroy it you have to come to the this is really to get, you have to come to the reality that you didn't build your reputation. What you actually built was your character. And that's all you ever had control of ever anyway. And so I believe a lot of my rise again, my second rise, if you will my return my restoration is tidy character Because the people who knew me before still with me today when I was released I had Hundreds of people that I know contact even victims people lost money that know I had nothing to do with it Come to me and say you're starting over do it with me. You're starting over. Let's do it together

I know you need a break, consider what I'm doing. All of these moments happened and I attribute it, and I wouldn't have known it ahead of time, but I certainly wouldn't have planned for this to occur. But you realize that how you manage the difficult times will determine where you land when the storm clouds pass. Like, make either you grovel and become a sour puss and become a victim and become this is terrible,

you should never have done this to me, the government has taken me down a road I should never have been on, or you say, you know, I can't do anything about this. I've gotta focus on the controllables, control the controllables. What I can't control is how I treat people. What I can't control is how I treat people what I can't control is how I manage this situation

what I can control is is my spirit my my My spirit cannot be taken you can take everything from me, but you can't take my soul I have to give that to you And so you you make some decisions in the difficulty that frankly are part of the chemistry that's already you It just doesn't get tested until this moment and it's in that testing you realize you know what you can have the reputation I'll take the character because with with character you got it all you got it all and you're totally at peace with who you are Day and night and your friends who who're friendly with, they're the friends

who know you. It's not the guys who want to get in the plane. It's not the guys who want to get to Augusta, go to the Super Bowl with you because you're rich. It's the guys who love you, who know you, who can look you in the eye. You're their trustee on their family estate because they know who you are. So I think the lesson for me that I couldn't have learned unless I got to the backside of it is,

character is all that mattered anyway. I think we'll leave it at that. Man, if they want to find you, James, where do they find you? You know, I have a podcast, Inside Out, with James Catledge. It's on YouTube, Apple, Spotify. The whole story is told there in small, bite-size increments.

It's an honor to be with you today, and I appreciate being a guest here. No, thanks for coming in James Well, listen man. If you listen to that, I think there is a there's definitely I Think that last question is the takeaway man. We talked about so much stuff today. Yeah, but listen Life is gonna give you ups and downs and sometimes those are self-created Sometimes they're not But at the end of the day, you need to focus more

on who you believe you are than who other people think you are. We'll see you next week. What's up everybody? Thanks for joining us for another episode of Escaping the Drift. Hope you got a bunch out of it, or at least as much as I did out of it. Anyway, if you want to learn more about the show, you can always go over to escapingthedrift.com, you can join our mailing list, but do me a favor, if you wouldn't mind, throw up that five star review, give us a share, do something, man. We're here for you, hopefully you'll be here for us.

But anyway, in the meantime, we will see you at the next episode.