Matthew Cox | Inside True Crime Podcast - Con Man Exposes 'Boiler Room'

Episode Date: January 9, 2024

Con Man Exposes 'Boiler Room'

For a limited time at McDonald's, enjoy the tasty breakfast trio. Your choice of chicken or sausage McMuffin or McGrittles with a hash brown and a small iced coffee for $5.00 plus tax. Available until 11 a.m. at participating McDonald's restaurants. Price excludes flavored iced coffee and delivery. Hi, my name is Matt Cox and I'm a con man. I was recently released from federal prison after doing 12 and a half years. I was locked up for a variety of bank fraud related charges and I'm 100% guilty of them all. Depending on which government agency you believe, the FBI, Secret Service, I'm responsible for

building financial institutions out of between $15 million to $55 million, although I personally feel like $55 million is a stretch, and I've never seen $55 million. Anyway, I've had it's something like, I think the Secret Service that I've had 27 IDs in six different states or 26 IDs in seven. different states. I know I've had over two dozen passports. I was on the run for three years while the FBI Secret Service in the U.S. Marshals looked for me. I was number one on the Secret Service's most wanted list. And I went to prison. I've recently been released. And I'm currently work as a true crime writer. Today I am reviewing The Boiler Room.

So the protagonist of the film is played by Giovanni Rabisi. And he plays Seth Davis. Seth Davis actually stumbles. This is the first scene where he stumbles into the, boiler room and you see the boiler room for the first time. need to chase your business. A kid, get the fuck out of here. What's great about that, that scene to me is that it shows the chaos of it.

And that's what these rooms are like. They're just completely chaotic. They're screaming, hollering. And these guys are just blatantly saying anything they have to say on the phone to get you to buy the stock. What's great about it is that he stumbles into it. He sees it. He gets chased out.

It's no big deal. But what's interesting to me is that I actually. wrote a story about a guy when I was in prison named Joseph Vitaly. The name of the story is Atonement. Anyway, so, listen, he basically has this particular storyline where he meets a guy that's making a ton of money. The guy's driving a Lamborghini. The guy kind of takes him under his wing. Vitaly told me when the first time he saw the boiler room, he said, man, it was exactly, has you ever seen the movie Boilerm? I said, yeah, he goes exactly the same thing. bunch of young good-looking guys

tons of money don't know what they're doing on the phone non-stop drugs rock and roll he's that hot women amazing vehicles living in fucking huge huge houses Vitale ends up with like a three or four million dollar house he's had

he's had like two or three Lamborghinis he's had a couple Ferraris the guys date women that are just it's impossible to date women that look like this the guy's he's phenomenal and the thing is Vitaly's the only guy I've ever met that was actually charged with running a boiler room. He actually, there's actually a charge called running a conspiracy to run a boiler room

was what he was charged with. So he ends up, it's basically the same thing. He's just broke, desperate, and ends up getting his, getting his series seven and series, there's several different series that, uh, and it licenses that he gets. And he starts working at a boiler room. And he used to say, he said, listen, he said, bro, you'll say anything on that phone. And the guys running the boiler rooms are telling them, you say whatever you have to say. So that's what I like about the next scene, is that it shows these guys who were like 22 years old,

who are telling people that they're 50-year-old men. And they're saying anything to get these people convinced, giving them what's called the convincer to buy the stock. And so this is clip two. and it's a great example of how boiler rooms run. I know you're not sitting at home with a bag of cash waiting for me to call you, okay? But I'm not some 18-year-old selling the cure for rates. I'm 46 years old.

I have 22 years of market experience. I know this business. You'll pick up your skirt, grab your balls, and let's make some money. Vitaly told me he used to call guys up. He said, there's two ways to do it. There's multiple ways to do it, but, and I have one of his pitches. It's phenomenal. I mean, he's telling these guys on the phone that, listen, I, you know, I've got, you know, some of my clients are Joe so-and-so from IBM, you know, Paul Branson that, you know, and he's just naming off names of CEOs, people he's never talked to. He's like a 19-year-old kid or 22-year-old kid. He's a joke. So, but he goes on and on. He said, one of the things they used to do was he goes, you call up, you're calling 500 people a day. So if you call up 250 of them, if you said no,

He said, look, I'm not interested. Well, of course, you're not interested. So here's what he said, they do. They take half the guys that you call in a day, and he would say, look, okay, you're not interested, fine, I understand. Here's what I'm going to do. I'm going to give you this one stock. And it's whatever.

It could be IBM, whatever it is, something that he said was either going up or down, back and forth, something that was volatile. So he gives you that stock and says, okay, I'm going to give you this stock. It's blue elephant stock. and if that stock goes up in the next 30 days when I call you back you'll give me a chance

and invest with me the guy's like all right if it goes up you call me back and if it goes up fine I'll give you a chance okay that's all I'm asking is for a chance

okay so he calls up 250 guys and tells them if it goes up the next 250 he says if it goes down you'll give me a chance because we could a short sell it we could this we get that

so they say all right if it goes down in the next 30 days he says then you just call him back in 30 days. He said, look, I'd take it a step further. He is, if the stock went up, I'd call back the guys, because I'd call back the guys that I told the stock was going to go down. He was, and I'd say, hey, remember that stock that I told you? Yeah, it was, you know, Paramar stock. Right. Well, guess what? It went down. He was, what the chances these fucking guys are going to remember what I said 30 days ago? Because they don't remember. They're getting called

by brokers all the time. So I said, it went down. You would have made, you know, if you'd invested $20,000, you would have made, you know, $7,000 if you listen to me. He goes, half those guys are ready to invest. So, I mean, they have all these little tiny tricks that they do to convince you to invest with them. And anyway, what I like is this is a great example. This is the example where Seth starts getting into it. And he starts figuring out how to convince people and what to say. and he gets pumped up

and he's hyped about it and he's into it and he starts coming up with his own scripts. Look, if you couldn't pull $3,000 together, your name wouldn't be on my desk during business hours.

John, you're embarrassing me. I'm picture you from under my desk. I'm actually embarrassed right now. Bob, Bob, be rude. Be rude. Hang up the phone. You won't. You all don't know why?

Because you see value. I am your kid's college fund for Christ saying. You're going to pass. Alan, the only people making money passing are NFL quarterbacks and I don't see a number on your back, take me off your list. Fine, fine. I'm going to take you off my list of successful people today. So what ends up happening with, just like this with Seth, I mean, Vitality's story,

really, the parallels are amazing. So you do, all the broker's businesses, they bring you in, they give you a couple hundred bucks a week. They have you come in and you have to call all the, you have to call the numbers, you have to, you have to pitch the client, you have to try and build up a portfolio. And you're building up a portfolio for the business. because they have such a huge burnout rate. So they want to get the most they can out of you. So you'll make these calls. You'll get good.

Maybe you get good and you move up. Maybe you're okay and you burn out, but at least you brought in 30 new clients. So it's worth giving you a couple hundred bucks a week. So what ends up happening in Vitaly's case, just like this one, the guy, they make the phone calls. Well, once they get somebody on the line that sounds interested,

they hand them off to a senior broker. They hand him off to somebody who knows what he's doing. This is where he actually gets somebody on the phone. He's actually got someone on the phone. And it's the first time he's actually convincing someone to buy the stock. And he walks the guy through the senior broker played by Ben Diesel walks him through the whole process on what to say, how to, the whole thing. It's great.

By delaying, you simply restrict my ability to do my job. Look, you know, I didn't get to where I am today by losing my client's money. Put your confidence in myself and J.T. Marlin, and I'm telling you we'll never have to ask for it again. Put your confidence in myself and J.T. Marlin, and I'm telling you, you will never have to ask for it again. I love that because, listen, you know why I love this? Is that my dad used to say something. He said, once you make your pitch, he's like, look, because my dad was a, My father was a manager for state farm for like 40 years. So, God, he retired when he was like 70.

He was starting in his late 20s. So for over 40 years. Anyway, he used to say, look, once you make your pitch, stop talking. You just wait. You make your pitch, you stop talking, you wait. Whoever speaks first loses. And then the big thing, the other thing is, you know, once they've said yes, now it's just signed the paperwork

don't talk anymore man I can't tell you how many times I've been I had one of my brokers would pitch somebody the guy said yes we're putting the paperwork in front of them they're signing they're initially and then the broker ends up saying yeah

and you know and don't even worry about the prepayment penalty the guy suddenly is like prepayment penalty and I'm looking at the guy like did you just fucking say prepayment penalty he's signed What are you doing?

The guy's like, well, yeah, how much is that prepayment penalty? What the fuck did you just do? You just blew yourself. Anyway, the point is, same thing. Same thing. I love this, that Diesel's like, stop talking. Let me close the door to my office. One second, all right?

I also have a bullet on. A couple days ago, Dan Dorfman on CNBC, put a heavy buy recommendation on Farrow Tech. This is going to be off the record. I just called a broker friend of mine who works at another firm and had him pick me up 50,000 shares under my sister-in-law's name. Harry, I'm going to put all my kids through college with this stock. Look, I have a thousand more phone calls that I have to make.

I have to call every one of my clients and give them the same opportunity. You remember when we first spoke? I told you that this firm only has six or seven great ideas a year. Well, Harry, this is one of those ideas. I remember you saying something about wanting to buy a house, right? Yeah. Well, how'd you like to pay for it tomorrow in cash? You serious?

Serious is cancer. All I have is the $50,000 from our savings account. Bro, it's a fucking, I mean, you know, what's funny is it's, it's brutal. That's a brutal scene. It's brutal because, well, first of all, you know, I mean, depending on, listen, I've read a bunch of books on con men. There's really not that many, but I've read it several. And one of the things is, there's one called the American Confidence Man. in the American Confidence Man, this guy interviews a ton of con men.

Really, a lot of the guys that did like the rag. So these are guys that are in their 70s, and the book was written back in the 80s. So all these guys say the same thing. It's just total justification on what they're doing. And they're basically all say the same thing, which is you cannot con an honest person. And the thing is, and the reason they say that is because Because particularly in the rag, they would let these guys know that, hey, I have the inside track. I have a lock on the stock.

I know something nobody else knows. I have insider information. So you're letting them in on a scam. And then when they lose their money, they're less likely to go to the police. And they had a whole thing. They had a blow off. They had all these different stages. And it worked like a charm.

Well, the thing about this, and you don't typically realize that. when you watch this, is that he's telling him, I've got a lock. I got a bullet on this, I think he says. He's basically telling him, I have insider information. So I, matter of fact, the information is so good, I had another broker at another firm buy stock in someone else's name for me because it's, it's obviously illegal. Why wouldn't you buy your own stock? Why would you buy the stock? You're a lot of because it's illegal. So he's telling the mark I have illegal insider information and I'm letting you in on it. And so what happens? He fleeces them of $50,000 that the guy is saved. It's horrible that the guys just dump all the money into it.

And you see later, I mean, obviously he loses the money. They try and do something at the end where it makes it look like he's really a good guy. He goes out of his way and he's going to get the money back for him. And it's bullshit. The guy's money's gone. It's over. They're trying to make the protagonist look like a good guy. It's really a good guy. Bullshit. The guy just lost $50,000. It's fucking gone. It's over. But what's interesting about that is he gave him the money because he thought he was being let in on a fraud. And that's what I always find interesting about this whole thing. Now, the truth is, honestly, most of the time in this scam, you just think you're going to make a bunch of money and you're not doing anything illegal. average person out there that gets these phone calls. They just don't have the capability of understanding the depth of deception that these guys are trained to do. They just don't have a fucking prayer. They're like shooting fish in a barrel. They need to just hang up the phone. Somebody calls and tries to get me to invest. I don't fucking know you. And just hang up the phone,

but not this guy. These guys are. And I'm pretty sure it's the next scene here that just fucking phenomenal, bro. This shows it's so good. The guy's so fucking smooth played by, I think it's Ben Diesel. No, look, I understand, doctor. I'm, you know, I'm really busy here myself. Look, we're going to come back to you in one month with one idea and one idea only. You know, if you're like what we had to say? Great. You know, we'll do business. If not, I mean, worst-case scenario, you're going to hear yourself a new business idea. Whoever took that X-ray, it is useless. We're going to part his friends. That's fair, right?

What? Doc, are you working with a million dollars in the market right now? Who is this again? Hey, you know, tell me something. You're a doctor. Have you ever heard of a drug called Benadryl? It's being manufactured by MSC pharmaceuticals. No?

Well, listen, listen, okay? Listen, it's in the third stage of FDA approval, all right? Where it is, it's going to be approved within the next three months. And it could be tomorrow for all I know. But, you know, I'm getting ahead of myself and you're real busy over there. So why don't I just send you out the information you requested about the firm. No, wait, wait, wait, wait, wait, wait, wait, wait, forget the info. Let's talk about this now.

What was the name of that drug again? This is over. It's over. If you hold on for one second, I'm going to get a senior broker who's a little more familiar with that particular stock, all right? Hold on a second, okay? One second. You know, because he almost starts to laugh. Rock! All right.

Okay, so his name is Dr. Jacobs, and I'd say from the sound of it, he's definitely... Well, I don't want to hear it, kid. Okay. Hi, Dr. Jacobs. This is Chris Marlin over at J.T. Marlin. Marlin? Right. He's my father. He's my mother.

So, my associate tells me you're interested in one of our stocks. Your wife's not great. I will call her back. Uh, yes, MSC sounds like it might be interesting. Might be. Might be doesn't sell stock at the rate MSC is going for it, Dr. We're talking very high volume here. Well, I still have to run it by my people.

That's great, Doc, if you want to miss yet another opportunity here and watch your colleagues get rich doing clinical trials and don't buy a share and hang up the phone. Well, hold on a second now. I didn't say that. I just want to talk about it. Honestly, Doc, I don't have a time. This stock is blowing up right now.

The whole firm's going nuts. Hold on. Let me open up the door to my office. Oh, my God, I want to go! Go, go! See that, Doc? That's my trading floor. Now I have a million calls to make to a million other doctors who are already in the know. I can't walk you through this right now. I'm sorry. Okay, okay. Let's do this. Now, since you're a new account, I cannot go any higher than 2,000 shares. I'm sorry.

2,000? Are you nuts? That is way beyond what I was thinking. 2000. Jesus. Listen, I'm curious. Why can't you tell me any more than that? Well, we like to establish a relationship with our clients on something small. Before we get to the more serious trade, let me show you several percentage points on this small trade. And then we'll talk about doing future business. That sounds good. Give me the 2,000 shares. Done.

You sure you can't do any better on this one? I'm sorry, Dr. Jake. I can, I'm sorry. All right, we'll start with his trade then. Great. I promise we'll swing for the fences on the next one. All right. Do you want that confirmation sent to your office or your mansion?

Uh-huh, very funny, Mr. Marlin. Let me put my secretary on, and she'll take down your info. There's a pleasure doing business with you. Done and done. All right. So, all right, there was a guy I knew in prison, and his name was Andrew Levinson. He ran a scam. It's called a bizop scam. Listen, this guy was, you know, for lack of a better word, you know, he was just, he was so just smooth, brilliant, an amazing, amazing guy. Just straight con man. I mean, he had, um, he had, um, he was just smooth. Um, he was just smooth, brilliant, an amazing, amazing guy. I mean, he had, um, he had, um, um, um, he had, um, um, um, um, um, He continually set up these biz ops, ran them for a year or two, till he just drained the market. Mute came up with another product and went on and on.

We actually called him Red Bull. I think, was it $40, $40 million, I think he ended up getting hit for? Basically, he ran business opportunities where he's selling you an opportunity to run a business. And one of the things he would do, which was amazing to me, was he would use the rules and the laws against people. So the laws that are set up to protect you as a consumer, he would use them in his favor. People would call up and say, look, I want to buy this.

And he'd say, well, how much money can I make? He'd say, I'm sorry. Legally, I'm not allowed to actually tell you or give you any type of example or anything of how, you know, any type of numbers. I'm not allowed to give you any numbers or anything, you know. But the truth is, I mean, let's face it, at this point, he was actually selling a business opportunity for Red Bull vending machines.

And so he would take a city and he'd section it off and he'd sell off different areas. So you call me up and you want to say, hey, I want to buy North Tampa. And I want to get 10 Red Bull machines. Okay, well, each machine's $5,000. It's $50,000 investment. But I can't sell you North Tampa. And he'd tell them, he would say, you know, they'd say, okay, I want North Tampa. Okay, great.

And then they'd say, well, how much can I make doing that? I can't tell you how much you can make. But let's face it, you know, legally I'm not allowed to show you, tell you what the numbers are. But you know what Red Bull. You know, Red Bull is pretty popular, right? Oh, yes. Red Bull's huge. Okay, well, you're a pretty smart guy.

I mean, you could do the numbers. So, I mean, I can't tell you the numbers. But, I mean, let's face it, if you get a machine and you put in a decent area, How many cans an hour do you think that machine's going to sell? Well, the guy immediately says, you know, oh, it's going to sell 10, at least 10, 20 cans. Well, you're saying 20. Let's say 10 cans. We're going to cut your number and a half.

Okay. Okay. And you make this much money per can. Okay. Well, yeah, yeah, yeah, that's good. That's good. Okay, so then what we're going to do is how many hours a day is that machine going to be there selling cans? Oh, at least 20 hours.

Now, well, let's let's say 10 hours. oh okay how many how many days a week oh 30 days okay well let's say 15 days he starts just chopping your numbers down so how much money would you make well the guys immediately sit there and go oh my gosh i'm gonna make i'm gonna make you know $500 per machine on those very conservative numbers times five i'm make $2,500 on a $50,000 investment in 10 months i'm gonna have all in whatever in 10 months i'm gonna have all my money back so that's an amazing investment but the truth is, you just scammed yourself because the average vending machine sells one can every three hours. But that was never even an option. He said how many per hour? You're at least going to say

one. Stop. Do you know how fast you were going? I'm going to have to write you a ticket to my new movie, The Naked Gun. Liam Nissan. Buy your tickets now. And get a free Tilly Dog. Tilly Dog, not included. The Naked God. Tickets on sale now. August 1st. He's already done. the same, it's the same type of thing right here where they're using, they're using your own greed against you. And one of the things he would also do when he says, no, I cannot do that for you. Red Bull used to say, okay, but I can't sell you North Tampa. Well, that's a desired relocation and we've already sold that. We already have a contract on that. I can sell you this one or this one. Well, no, I want North Tampa. I'm sorry. I can't do that. I've already

sold that location. I would love to. I just can't. Same thing. I can't sell you more than these shares. Truth is, he can't sell them, period. He can only sell 2,000 shares because there's a whole thing. They don't want to get stuck for the money. The point is, is that Red Bull, people, what he told me one time, and this is so true, people are more concerned about losing out on an opportunity than they are about protecting their investment or their money. you know and it's just it's just psychology this guy was brilliant at it brilliant brilliant anyway the point is I had to adapt to this new world I didn't really know any of these guys

what I did know is that they had all the money in the world can I stop the clip real quick okay the only reason I want to stop the clip is that do you notice that there's a Lamborghini so I know like five guys with Lamborghinis by the way every one of them is an asshole never have I met a guy that has a Lamborghini that isn't a complete fucking asshole. I shit you not every single guy. I met two lawyers the other day that had matching Ferraris

assholes. Both of them. Go ahead. Sorry. And not a clue what to do with it. This is the same thing. Disguise. So same thing. It's the vitality thing. The guy's got, look, with Vitaly, I told you, the whole reason he even became a stockbroker was specifically because he met a guy driving a Lamborghini, guys young, has a ton of money. He actually met the guy. He and his girlfriend

go to lunch with this guy and his mistress, which is also like a 22-year-old girl. And he's got a wife and he got a couple of kids and he's driving a Lamborghini. And so he was just like, this is phenomenal. He's like, this guy's living my life. I remember he told me that. He goes, I remember thinking,

he's living my life. This is my best. So Vitality ended up living in his car for like two, three weeks. I mean, he got evicted the whole thing just to try and become a broker. Parents practically disowned him. Anyway, so what I like about that scene is that it shows the Lamborghinis,

it shows the Ferraris out front, the guy walks into a $3.5 million dollar house, it's got no furniture. These guys just have a ton of, they have a ton of money and they don't know what to do with it. This is the same, look, you know, I've got a, I've got a,

the story I wrote about the credit card kid, same thing. He had a ton of money, had no clue what to do with it. He's blowing, throwing money, and he's making it rain in strip clubs and stuff. But he said, I just didn't know what to do with the money. He'd never had money. He'd never known anybody with money. He's like, I didn't even know how to spend the money. He's buying, he's got like five cat, five Cadillacs. And he's dating a bunch of strippers. You just didn't have any clue. So, anyway, I like that clip because it just lets you know that the, the allure of all that money, and they're so young. So, all right, next clip.

This is where the movie gets, it's pretty good because what happens is at this point, it's the first time that Seth starts to realize something's not right. He actually wanders back into the office. late at night, but just by accident to, like, get his jacket or something, and sees the SEC compliance officer shredding documents, which is odd. So he starts to realize something's not quite right. He starts to realize also that, like, a lot of the things that they're doing aren't above board, but, you know, but he's probably thinking it's a gray area and they're young guys and they're just, you know, skirting the law. But when he sees the compliance officer,

he really starts to put things together. So here's the next clip. You know, I was wondering, do you ever wonder how we make the rips that we do? I mean, how is it that we make rips that pay out more than any of a major firm? Be kidding, really? That's a wrong question to be asking. Why? The only thing you should be worried about is how you're getting it late, didn't I? Oh, no, I'm serious. I mean, you know that SEC regulations state that the maximum rip allowed is like 5% of the sale, and we're making, like, four times that.

Wait, you just passed your Series 7, now you're an inspector or something? Come on. Aren't you happy with the way things are going? Yeah, yeah, of course. No, I'm just curious. I mean, you're not curious? I don't know. I like being a millionaire.

I like being a millionaire. Nice. So what happens is he starts to ask questions. He starts to put some things together. They're paying these guys huge commissions. You know, they call them rips. So, what, four times the amount of a typical commission on a stock trade. And it's against the law.

And he knows that. He just took a series seven. So he understands something's not right. He's asked. He's starting to look into it, starting to figure it out. Something's not right. And that's the scene where he asked Vin Diesel. And Vin Diesel's like, look, don't, you know, you're asking the wrong questions. So they're shutting him, you know, they're trying to shut him down because these guys clearly know something's wrong. So here's the next clip. I don't know why the hell I walked in there. Things were going well for me. I had passed a series seven and was closing my 40 accounts for Greg. I didn't want to go in. I really didn't. But part of me had. I had to know what Michael was doing in there the week before. And why would they be walking into the building next door? The place was empty.

I should have just let it go. We have plugged in there. Okay. Are you so far? Yeah. Now, if the heat comes and we have to jump, how one's going to take the whole firm? I mean, under two hours. Under two hours, literally.

They'll be making calls that afternoon. All right, I'm going to get back to that phone call. I don't know if that's. My first thought was that we were moving to nicer offices. Nice thought. I came to realize it was a quick out for Michael if things got out of hand. I love that. See, I love that they have the SEC compliance officer in on the whole thing.

because to me it reminds me that look look the guys that actually on let's say a loan application is the underwriters and they're the guys you have to you have to get them to review your documents and say okay you meet the underwriting guidelines and then basically you've got your loan and I remember one time we actually actually bought this guy this underwriter first we were paying him a couple hundred bucks and then we ended up I ended up leasing him a he wanted to he wanted a he wanted a Mercedes compressor it had red interior it was it was horrible anyway uh but yeah i leased him this this uh i least him a mercedes i mean listen we're paying what i can't even tell you listen the point is i could see getting the SEC compliance officer in on the whole thing

because he's they're thinking they can pull it off what ends up happening what what this is what's happening is that they slowly starts to put it together that michael belford uh the character which is based on Jordan Belford, is that basically what ends up happening is Belford is setting up these companies in his friend's names. He's getting them, he's getting the financials audited, he's going through the steps that you have to get to get them placed on the stock exchange so that you can sell stocks through the stock market. Then the boys in the boiler room are selling the stock,

They're drumming up the price of the stock. It's a pump and dump scheme. They keep selling it and selling it and selling it and selling it until eventually it's all sold. It can't go any higher. And then he just dumps the stock. And I mean, it's really honestly, it's a lot of kind of the same thing I did in Tampa in Ybor City where you're basically, I was buying houses and I'm making it look like the houses are selling. I'm buying houses for $40,000. and I'm recording the value of the houses at 160, 180, 190, $200, $250, $300,000.

Listen, it got so bad that when I was going out to buy more houses that were only really worth $40,000, I couldn't buy the houses. I actually had it to where I went out and I went to a guy one time, a guy trying to sell his house. I went to him, I said, look, I'll give you $40 grand for your house. And he goes, oh, I want $50,000. I went $50. I'm going to give you $50 grand. No, no. And I leave. I buy some more houses. The market's going up. People are asking more. So I go back and I say, look, all right, I'll give you $50,000 for the house. And he goes,

I want $70,000. $70,000. $7,000. Six months ago, you wanted $50. No, no. He's like, I want $70. I think I can get $70. You're crazy. I leave. A couple months later, I go back and I go, because it's drying up. I bought so many fucking houses that there's just nothing. People aren't even selling the houses anymore. So I finally go back. I go, okay, I'll give you $70,000. And the guy goes, no, I want $90. Where are you getting these prices? And he goes, have you seen what these houses are selling for $1.90? That one sold for $1.70. That one sold for $1.70. It's all fictitious. He's believing the hype that I'm creating. I was working against myself. Anyway, the point is, this is the kind of thing that ends up happening is that these guys, they start to see people paying

for the stock. And so they keep buying it for more and more. But the truth. is it's all bullshit. Eventually, the stock falls. Everybody loses their money, and it appears so legitimate that nobody even looks into it. I had houses going into foreclosure, and when the lenders came and looked for them, they would, or looked into it, they would then do another appraisal, and they would see all the other houses around it selling for 160, 180, and they just assumed it really was worth 180. We just, the guy stopped paying and, we're going to put it on the market and try and sell it and get our money back, which, of course, they never did.

Anyway, so let's go ahead and next clip. How are you fucking it up? I went to the office, the MedPatant office this morning, and there isn't one. It's cardboard. There's nothing. There's no employees. There's no research and development. There's nothing.

I found out how Michael's making his money. We're selling stock for companies that don't exist. Do you know what bridge financing is? No. Well, basically, it's a way to raise capital for a company that's trying to go public. They get money from outside investors. They're the bridge. And it's perfectly legal as long as there's no connection between the investors and the firm.

But Michael's fronting his friends as the investors. On every IPO, we do. So that's why all the names on the contracts are the same. Right. And then he has us push it all in the open market. We're basically selling Michael's shares. And that's where the $2 rips come in. He can afford to pay us that much, and it's worth it for him

because he depends on us to literally create the market for him. There's no other firm selling this shit. It's all artificial demand. And then as soon as we sell off his position, there's no need to maintain the inflated price anymore. We stop pushing it, and then... And then it crashes. Right.

So that's when he actually discloses to his girlfriend that he's figured it out. Seth has figured out the scam. He knows it's all bullshit. He knows these companies don't exist. He knows the whole thing. It is complete fraud. I'm pretty sure this is when the FBI comes in. You all know, there's going to be a lot of fucking heat coming down because of what Farrow Tech did yesterday.

All right? So be smart on the phone. Calm people down. The stock's dropped 86% in yesterday's close. I don't want to. Don't sell the stock. You want to transfer your account out? Go right ahead.

You're going to transit some broker who doesn't know you shit. Look, I'm sorry we couldn't foresee this when we first came to you with the stock. I mean, I lost you $60,000. There is no one who wants to make that money back to you more than I do. It's just, what kills me about that scene is that he's offended that the guy wants to sell the stock and get his money and try and get, he wants to try and salvage his investment. It's lost 80% of its value. If you put $100,000, let's sell it and just get me my $20,000.

This guy, the broker's acting offended that you're trying to sell the stock. He's still selling. He's still conning him to get that last little bit of money. I can't even let you get your 20 grand back. I'm going to keep pushing to get all the money until it goes to zero and you've lost everything. So as soon as that stock hits bottom, he's already set up the next company and he's pitching the next stock, which is completely fabricated. And this is the next stock.

I've got a new issue I want to talk to you about. It's called MedPatant. They just designed the world's first retractable syringe. That means that nurses and doctors will never again have to worry about infection from dirty natals. This is not going to be an alternative in the medical world. This is going to be the standard. We all know that we're here to make money.

But if we can do something good like this, well, it's all the better. So I want you to go out, buy yourselves a new car. Go buy yourself a house. Going to debt. You were going to make a million dollars inside a six months. You know, what bothers me about that scene is the, he actually said, go out and get debt.

When I would have brokers come and come and work for me. You know, and they come in, they kind of like, if they weren't coming for another brokerage business, they didn't quite know what was going on. So a lot of guys making a lot of money,

a lot of people are driving nice cars, they're all young, something's up. These aren't, these guys don't have MBAs. These are guys that are basically car salesmen. So did you ever see the movie, The Big Short, where the guys are basically, they're all focusing on trying to get strippers' mortgages and stuff, that's my guys. A bunch of meatheads. Oh, dude, bro, I basically focus on strippers.

You know, I mean, just complete fucking jackasses. But that's my guys. And I remember one of the first things I did because you want to lock them in, make sure they make a little bit of money right away, and then immediately tell them to go out and get a new car. Let's get you in a new house. Let's get you this. Now, you're going to be able to afford it. You're going to be able to afford it. Because what happens is if you get them into debt, they can't walk away. Now you're in debt. Now you've got a $700 a month car payment. You've got a $1,600 a month house payment.

Your credit cards are racked up. So when it comes time to actually commit some fraud and really step over the line, you can always go back and sell cars. Of course, you're going under. You're also going to go claim bankruptcy. You might as well fill out the bankruptcy paperwork right now. So you're basically backing them into a corner. And that's what he's doing, is backing these guys into a corner.

And then the FBI shows up. Get out of the car, please. Seth Davis, you're under arrest for the violation of 26 SEC and NASD regulation. Listen, the FBI is for the Secret Service. They're always going to show up. I mean, Belford 100%. These guys think they've got it down. They're always going to catch on eventually.

A whole bunch of, even if it's perfectly legal and enough people lose money, they're going to come in and investigate. They're going to figure out it's a scam. They're going to shut you down. They're going to grab you. And they grab you when it's the worst possible time. And you never see it coming. Never.

Even when I knew they're looking into me, Even when Belford knew they were looking, he kept going. He knows it's coming down. He's still going forward. Still thinks he can beat him. I mean, it's just the arrogance and it's the narcissism. This is fucking horrible. So they grab, anyway, they grabbed Seth.

And this is about how it plays out. I believe the sentencing, I want to say it's like 2016 sentencing commission did a survey, and I think it's pretty much, I think it's about 87, 89%, and it goes just like this. All right, all right, before we get ahead of ourselves, what are you offering? I'm going to hand you this case on a silver fucking platter. I know everything you don't. I know how it all works. I know how Michael makes his money. I know how he hides it. I know who he goes in with. I even know where he moves. You guys get too close.

I know everything. So tell me what happens now. You go back to work tomorrow like nothing happened. Nearly 90% of all defendants cooperate. And it's got to be, it's probably through the roof on white collar crimes. So they immediately tell him, look, you're going to, you know, I think they give him some kind of a deal. They offer him a complete immunity or something. which is just not going to happen.

You're not getting complete immunity. You're getting indicted and you're going to get a sentence reduction. You'll probably end up on probation. But you're going to cut everybody's throat. And he tells them, I'll put, I'll give you this. I'm going to serve these guys up on a silver platter. He's going to cut all their throats to save himself. And they'll all roll over just like on Belford's thing.

Everybody rolls over on everybody. They threaten his father. They threaten who? Oh, yeah. On this? Oh, listen. He was giving up everybody anyway. You don't want to go to prison.

You know, it's always, they threaten my wife. They threaten. Stop it. Stop it. That's what you tell the guy is in prison when they find out you cooperated. Seth, mine too. You have got a call about me. Hello?

It's time, set. Get on. Thank you. I mean, you know, I'm going to make a good and I'm going to

have a lot of a valid for me and my friend and I'm going to like a lot of and I'm not considered a little bit more. And all I'm going to

have a valid for a valid for on your lunch, boys. Yeah, that whole clip is just, I love that he has to go in and steal the evidence or get, well, first of all, they have search warrants. They're going to get the evidence. It's all on computer. It's just complete, you know, for dramatic purposes,

because there's, you know, they're concerned about them doing one. What are they going to do? What are they going to, they're going to raid the office? They're not going to be able to destroy anything. Even if they destroyed everything and burnt it down, it's all computer. All the trades are already recorded on other systems. So there's nothing there for him to have stolen or have taken.

But whatever. Anyway, it's nice for drama. This is the last clip. This is when they come in hard. This is the FBI. That's it. They come in, they grab them. I love that they pull that bus up.

There's that many guys that are going. I remember there was a case where they had something like 150 guys. They actually went to like a middle school and they got the auditorium or something. There were so many guys. that they brought them in for hours and just stacked them because they couldn't handle it at the Sheriff's Department. Yeah, basically, that's the end of the clip. I mean, that seems realistic.

The raid at the very end, I mean, that's what happens. They raid you. Maybe you see it coming, you know, eventually. Maybe you don't. They show up. They grab everybody. Everybody grabs, they either get lawyers or they start rolling over on each other, and you're all doomed.

And it's over. I think it's a great, it's a great fucking movie. So if you like the video, hit the like button, subscribe, share the link, and I'll be back next week.