Matthew Cox | Inside True Crime Podcast - Walt Pavlo: EXPOSING The Largest Accounting Fraud in AMERICAN HISTORY ($11 BILLION)

Episode Date: February 3, 2022

Walt Pavlo was apart of one of the largest accounting fraud cases in American history! Matt and Walt Talk about the downfall of MCI and World.com

We're going to be doing an interview with Walt Pavlo. He was involved in the MCI WorldCom. It was it one of the... This is the largest accounting fraud in U.S. history. U.S. history. Okay. Yeah. Still going.

Still got the record going. So if you watch like documentaries, there's documentaries out there about MCI and WorldCom. they all it's always kind of cursory like it's always kind of a brief overview and there's this where they they kind of started cooking the books where they were the the the i guess the um the CPAs or the uh the financial officers were asked to start putting money showing that there was there weren't losses that there were actually gains and they were they were they were saying that these are you know this is capital you know there's this capital and these aren't actual expenses

and they were doing little things they never really explain the only person i've ever heard explain, okay, like, how did it get to that point? The only person that ever explains how suddenly this massive losses started showing up, they never say, they say, oh, they say, well, these losses show up, and then they decide to start cooking the books. But the only person I've ever seen explain what those losses were is you during your interviews. Because to the average person, you're like, oh, they just took losses. Yeah, but there's a reason they took losses. And those losses are also fraud. They make it seem like people just weren't using the service, but that's really not the case.

Business was booming. I mean, I think the big thing about telecom that made it very unique is that the consumer is winning in telecommunications. And just like in housing, when the consumer is doing well, nobody asked a lot of questions. And in telecom, it was the same thing. As services improved, prices went down, you know, there were different sort of applications that were going. going on. They were making a ton of money. So there was no regulation. There was very little oversight. Right. And there was just a ton of money. And then what happens, though, when people stop paying? And that's what happened with all the telecom. Okay. Well, so that's what

kind of what I wanted to go over. Sure. I mean, obviously I want to start kind of at the beginning. Sure. And which is basically like where, I don't know if you've watched any of interviews, but basically like, you know, like where were you raised? Oh, yeah. Sure. I was, I was raised in Savannah, Georgia and Atlanta, Georgia, and then my dad got transferred quite a bit. I ended up in West Virginia, went to West Virginia University. I got an undergraduate degree in industrial engineering. Went to work for a Goodyear Tire for a few years in their aerospace division and then went to General Electric Limited of England in their aerospace division. So I go from like these heavily regulated, heavily audited industries, you know, where there's

auditors everywhere. You're filling all these damn forms. and I get a job offer at MCI telecommunications. And it's like, you know, what do you guys do here? It's like, whatever the hell we want. It was a Wild West. You know, what experience are you bringing from your organization because we need it in ours? And that's basically how I got into MCI. But you, but you, I mean, obviously you were qualified.

You had what, a master's degree? Have an MBA in finance. Yeah. Right. And you were already working with these other, big companies. All of these are big companies. Big. So a headhunter came to you and said.

It was through a, look, there were job, you know, fairs everywhere. But I had somebody who was the human resources at MCI. And they asked if, you know, hey, if you're looking for a job, this is a great place to work. Okay. So I, you know, I took the opportunity. So what was the, what ended up being the position? The job was, it was interesting because I, you know, I'm more of an engineer at heart. And as I went to MCI, they said, well, you know,

there's all kinds of jobs open here. How about if you take this one? And I was like, well, what's that one? And it was, you know, accounts receivable management, which, you know, if you look that up in a textbook as the last job that you'd want to be involved in, you're just collecting money. Collections, right? Collections.

So I'm not a big guy. I'm not going to be, you know, what am I going to do? Like, hey, you better pay your bill. But it was in the resale division, which made it really interesting to me. I was actually going to be working with every telecom company that was out there. WorldCom is our biggest customer. So AT&T, Sprint, these are customers who bought excess telecommunication services from MCI and resold it under their own, their own brand name.

It happens today, too, Matt. I mean, like, if you pick up your cell phone and you call, it doesn't always go over Verizon or Sprint, whatever it is, you know, in the background, it travels over different networks and then those companies, you know. So you want to explain that, I mean, I'll say what I think is. Sure. It's basically there's a lot of infrastructure where there's, you know, what? of over the phone wires and you know satellites or whatever yeah but let's face it like AT&T doesn't

own all the satellites in their network so if I call from Florida to California it has to go through multiple satellites or multiple different phone systems and those phone systems are rented from or leased correct or they have an agreement to pass your phone call through you know I call through AT&T well it goes through Verizon and then it goes through somebody else and then the call ends up being taken by some guy who's with Boost Mobile or whatever. And they all get billed a fraction and they pay. So what they were doing at MCI is there were, what, phone rooms and stuff? Or no, I'm sorry, smaller carriers that were then leasing those same phone lines through MCI

and selling what? They were selling like the prepaid cards, right? They could sell about anything. I mean, you're right on target on how exactly it works and breaking it down. but there's other people like, you know, Matthew Cox wants to be in the telecom business. And basically all you would do is buy 100% of your, you know, your backbone from MCI and market it. Matthew Cox is a long distance. Right.

So it's like a white label. Yeah, exactly. And we encourage that because that group, you know, the smaller carriers are the ones where you really made the money. Look, when I'm buying telecom services from, you know, AT&T or I'm selling to AT&T or WorldCom, remember, I'm also buying from. them at MCI. If I have you on my network, it's a one-way street. You're buying for me, and you know, you can only use my network, and I'm doing everything. So I can charge you whatever you want. I have, I'm not going to be buying any services from, you know, Matthew Cox. So I'm going to mark it up quite a bit, but you better have a very unique service that it is

going to generate income. And that's where, there was a lot of competition. And you had to, you had to have a unique product. And unique products back then were gambling, fortune telling, and pornography. And so small telecom companies that got into those businesses had big margins. And those are the ones that we went after at MCI. So we had all these guys that were like AT&T and Sprint, tens of millions of dollars per month that they were, you know, billing on our network. WorldCom was $200 million a month. Matthew Cox is an example. Telecom might be $75,000 to a million dollars a month. But most also. of that is profit. I mean, it's a heavy markup in that business. So it's an important part of

our business model. Where do you go get profit? People, you're just exchanging dollars with AT&T and Sprint? Or do you go with, you know, Matthew Cox who's like forking over the money to you? Right. And those are the ones that we went after. But those are those, and those are the ones that you were collecting out, like when they would get behind, then you'd come in and say, hey. Well, that was that was a thing. When I got into the job, Matt, I'll tell you, I I never thought that I'd be collected money. I mean, I thought that I would be negotiating contracts, which is primarily what I did, issuing credits, making sure the billing was good.

You know, I mean, I was a service to most of those people, you know, those big companies. But when it came to the small guy, I was out of my league. I mean, these were hustlers in many ways. And they were, they could run up bills pretty fast. There's one that I always talk about, they talk about in my book, Stolen Without a Gun. Caribbean Telephone and Telegraph. Now, Caribbean Telephone, as its name implies, it was based out of Detroit, Michigan. Right.

So they were, they had a calling card and they had a, you know, and it was 1-800 call, whatever country. And they were, it was pretty cool. You know, you could call, you know, Cambodia, Vietnam, Mexico, Jamaica, whatever it was, they had a calling card for it. Right. And this is back in the late night. I'm sorry, just wanted, like, I'll get people in the comments and they'll, they'll,

they'll say, what the hell is that? What the hell are they talking? What's a phone call? Because most of these guys are like 20 or 30 years old. Sure. So, yeah, it's basically that's, this was back in the late 90s, right? Back in the, this is the big, you know, if when you want to know where telecom originated, why we have the services that we do today, it began in the 90s.

Right. And, you know, calling cards were the prelude to all the services, the prelude to the internet. Right. I mean, you need, if you want to make a call to your mother, your mother in Jamaica and your Jamaican, then you would buy a prepaid calling calls. And then you would punch the numbers in to the phone and then it would connect you through and it would start taking the money off of the card. Like a debit card. Yeah, that's one way.

That's the scam that you're talking about. These guys are basically running because it all ends up being almost like it basically runs up, ends up being a scam that those guys are running. Well, it does because you have a piece of plastic that is worth 50 bucks. And, you know, and Caribbean telephone was selling these. You have a street value of $50. Their underlying usage, you know, that they need to pay MCI might be. only $10 or even less. And so they're making a good markup on it.

We're making a lot of money on it too. But if they don't pay, if they don't pay for the, you know, the usage on that card. They got the 50 bucks. It's like you're printing a piece of plastic that cost about a penny. Right. And they're running on our network and you just never pay for it. That's a lot of profit. And that's exactly what they were doing.

And they ended up owing us, I don't know, $25 million in unpaid invoices. And, you know, it was, if you've ever been to Manhattan, you go to these little bodegas in there. It seems like they got a grocery store in there. If anything that you possibly would want to buy, calling cards made for a hell of a profit margin for the bodega. If you look on there, you got Wrigley Spearmick Gum and some shit like on the counter that they can do.

Or you could put a stack of calling cards there that has a street value about two grand. Right. So it doesn't take up very much counter space. So it's a great product for these little bodegas. And that's what they, to get them into those bodegas, what Caribbean telephone was doing, very unique. They would go out to, like, guys that were selling bread, cigarettes, milk.

They would go to their truck depots. They'd sell them a stack of cards. These guys would, in turn, sell them on their route, all these little bodegas around. And it was primarily all done in cash. And money came back to this one's central office that they would have. They'd count the money, take it to the bank. And when I say money, I mean, like this table right here

and have a million bucks in cash on it. And they were just running it. And after a while, that becomes, I mean, cash disappears. you know, even inside the company. And so they weren't paying their bill. And that became a big problem for us. And, you know, were they paying? Yeah, but their usage went from like, shit, $50,000 a year

to about $10 million a year, $10 million a month. I'm sorry, within a year. So they were doing big bucks. And then they kept falling further and further behind. Yeah, they pay me $5 million. But they owe you $10,000. You come in, they're like, you're like, you owe $10 or $11 million. They'd give you like $5.

Correct. You'd keep the, they'd give you just enough to keep their scam going for another month or so. And if you're at a company like I was and your bad debt budget, the amount that you would write off during a year on a bad year might be $10 million and these dudes are into you for $25 million, you've got to do whatever you can to keep that guy alive because you can't write off $25 million, right? I mean, it's like it's going to ruin my whole year, one customer. So you try to keep them alive and it just kept getting worse. you know, five million. They were, you know, five million more in the hole, five million more. I mean, really was a, I think what it was all said and done was over $55 million

before somebody said no more. That one cup, that one, just one, just one customer. And so they basically, those are like, then they basically can shut down, open up somewhere else, and start over with MCI again under another, use another face, use another corporation, start the whole process over again. You know, I tell you, that was probably, you know, moving on from Caribbean telephone, some of the other small, you know, you know, Matthew Cox Enterprises, right?

Matthew Cox Enterprises would run up a debt of us, a million bucks, closed down. The same salesperson would call you up and say, Matthew, change your name to MCI and just put it in your wife's name and we'll use your same equipment and I'll sell you another contract because these salespeople are getting paid. Commission, yeah. Commission on revenue generated, not on money. I mean, it was an extremely aggressive program. go out and find as many Matthew Cox, you know, in CT&Ts as you can. But in the end, it's tens of, hundreds of millions of dollars. Hundreds of millions of dollars.

Hundreds of millions of dollars of customers that aren't paying us. And that becomes, you know, that's a bigger problem. That's you. So here's the complicating factor where, you know, things start to go wrong. In accounting, I don't want to go too technical in accounting, but in accounting, you actually don't have to receive the money in order to recover. the money. So, you know, it's the accrual basis of accounting. So this is the way big businesses work. So in January, we have usage of telecommunication services. I then send you an invoice out in

February. When I send that invoice out, it becomes an asset on your balance sheet. It's called an account receivable, money that's going to come into me. You can record that. Right. You can record income as revenue in your income statement. Even though you haven't received it. Even though you haven't received it. That's the way the accounting works. And later, you know, when the money doesn't come in, you're supposed to tell everybody, hey, remember that million dollars or $50 million, but it didn't quite come in, so we're going to take that off of our revenue. Right. Okay, we hadn't done that.

And, you know, so on paper, Caribbean Telephone looks like a success. Matthew Cox Enterprises looks like a success. All these different companies look like they're, you know, they're very successful. Right. So what you have on the books looks really good, you know. It looks like you're reflective of reality. Well, the reality is that you're, you know, judgment days coming and you're going to have to, you know, when do you tell people? Right.

The other complicating factor that happened, you know, with us was British telecommunications announced that they were buying MCI. So we have all this good news on the books, right? And we have a company that's getting ready to buy us, which eventually got, you know, WorldCom ended up coming in. but at the moment it was British Telecom. The question becomes, when do you tell shareholders that is not quite working out for you? And, you know, the answer was then we're not going to tell them. Right.

You know, that doesn't make, how's that going to help me? Our revenue is up. Our profits are up. Our stock options for people like me are way up. And now we've got a potential buyer who's going to take us all out, right? All our stock options are going to be. invest, we're going to be millionaires, you know, inside of our company. So, you know, the incentive to keep things try as best as you can to keep this boat together is extremely high. Right.

And that's what we did. You know, we started, we started cooking the books. Right. You know, to make it look like this revenue was going to come in, different, you know, different sort of shenanigans that we could use. And one of what wasn't one of them that they were offsetting some of the losses to other companies that MCI owned so that it would look good on the balance sheet for the main company, but this other company is taking a loss. You could do stuff. It was actually simpler than that, Matt. What you can do is, let's just say that you owe.

Is that wrong? That wasn't something. Yeah, it evolved into that. Oh, okay. It evolved into that. But like, if you owed me a million dollars, what I might say to you is like, Matt, look, I know you can't pay me a million bucks, but I got to get something on the books. I'm going to transfer this to a promissory note.

So you're going to keep using your current usage and I'm going to cut you a break and you're going to like, I'm giving you a loan over the next three years. But look, the first payment's not due for like a year or two. Right. You know, so it really doesn't cost you. So it looks like an asset. It looks like I did get the money. Correct. It looks like there was an asset.

Exactly. Then you can take those assets and you can start moving those around to other, you know, different companies. But you give the appearance that you're going to get this money in. When, in fact, you know that you're not solve it. You couldn't possibly pay that. You may not even be in business. I mean, that's what we ended up doing with Caribbean telephone. They owe us over $50 million.

We said, your first payment is going to be due two years from now. And then we disconnected them. They're out of business. But on the books, there's still an asset. And that's, you know, those are like some of the games. In fact, you know what, Matt, we didn't even call it cooking the books back there. We called it helping. Right.

You know, can you help? Because we're looking for solutions. And at first, we're not, we don't know if we're ripping people off. We just, you know, can we buy us some time? Yeah, we're all making money. We're just keeping things going. Tons of money coming in. So my question is, like, this isn't something that, like, you didn't, you entered the

business, you start seeing these things slowly happening. But, I mean, at some point, you have to know, okay, this isn't quite right. Like, I mean, was there somebody who's telling you this is how we're going to do it? And was there a moment when you were like, like, okay, well, this is fraud? Or did you think, oh, okay, this is the way it's done? Like, I've been in that situation before where someone was telling me, this is how it's done. I was like, oh, okay. And I just kept going and going.

And then at some point down the line, I started going, no, wait a minute. Something's wrong here. Right, right. That's like, I don't know how if or at that moment you knew, no, something's wrong, bro. I would say, no, I would say at the moment, I was like, well, there's still. money coming in the door right i mean it's not like we're not going out of business so i don't know exactly but somebody explained you we're going to shift this to do this mostly the way that they explained it back then was here's your budget and you need to meet it and you start meeting with

other people just like you that are bright and you're saying what the hell are we going to do right well you could do this and you could do that and you start looking as like well i don't know what a hell accounting is i'm not an accountant do i have i taken accounting courses i'm smart enough to kind of know how it works, but do I know all the rules? At that point, I didn't want to know any of the rules. Even that rule, even the rule where you're saying, look, we're owed a million dollars and you're claiming that this is an asset. To me, that doesn't make sense because it's like, yeah, but you don't have the million. You're like, yeah, but we're going to have it. No, you don't know that you're going to have it. But the accounting principle says, no, no, you can claim that as an

asset. Correct. As income, even though you haven't got it. Like, even to me, so I can understand saying, I'm not an accountant. Like, I don't know because the fact is that some of the rules don't make sense. Right. So, but I'm sorry, I'm just trying to clarify. No, no, you're exactly. No, you're exactly right. I mean, and I think you get caught up in the confusion.

It's like, well, hell, you know, I'm not an accountant. And you just explained it well, and I might say, you know, he's an accountant. Right. Let's do that. I don't understand what the rules are. I'm not a CPA. I'm not licensed. But at some point.

At some point, you're looking and saying, okay, look, you know, now I'm no longer talking to the accountant. So I'm just making this shit up on my own. You know, I'm just like, I'm an accountant, you know. I just start being as creative as I can. And making up payments, making up redating invoices. I mean, you know, whatever it took. And basically, all I'm doing is presenting to other executives inside of MCI.

And even some accounting people are the numbers are what you're expecting them to be. They look good. That's good. You're doing a good job, Walt. So in the, you talk about, you know. how how do you wake up you know and think like you're doing something wrong and then you start to be promoted you know now now it's really confusing because they're like okay I'm no I'm doing all this stuff and it does seem a little off but I'm at the same time I'm being promoted I'm

getting more stock options I'm getting bonuses I mean and everybody's saying it's okay like everybody you're so that's the big thing when you're surrounded by other people like being in prison being surrounded by like other other criminals you start behaving in a certain way then you get out in regular society and you start realizing oh wow I'm I'm absolutely not behaving the way in a physical person like like I'm not

everybody's behaving differently now and I'm really an oddball like this is really I'm really out there not realizing because of the environment the situation you were in and I can see being surrounded by people in a business and they're all saying no this is okay this is acceptable this is fine but if you were to go out

outside of that business and explain it to somebody else. Somebody would say, wow, what are you, what are you into? And I didn't explain it. But at the time, MCI was like today would be like working for Amazon. It would be like working for Google. It would be like working for Apple. I mean, it's just like, wow, what do you guys do there? I mean, it's so high tech.

And it was a revolutionary company too. Like I've watched a couple documentaries where I forget the founder came in and where it was, was it Bell that owned everything? Yeah, yeah, 18 to 18. They owned everything. That was it. There was only one phone company. That's it.

There's one phone company in America. That they created on their own. Yep. They weren't licensed to be a monopoly. But they were just, I remember the commercial where MCI shows the commercial of two people talking on the phone and they have the running total. And at the end of the total, it's like six or seven bucks for AT&T, which that's like 30 or 40 bucks now. And then MCI was at like $3. It was like literally almost double the price.

And there was no reason for it. Right. It's the same phone lines. Right. Right. So how is this possible? Because they could do whatever they wanted. And then MCI came in and just completely separated,

I mean, just completely revolutionized everything. They invented resale. They invented the carrier market, the ability to be able to lease lines that weren't being used 100% by AT&T. MCI argued they should have access to those lines that aren't being used to create competition. and that AT&T had to sell it to them at a reasonable price. And that's how MCI got in the business. They were known more as being a telephone company, you know, a law firm that had an antenna on the roof.

That's really what they were noted for. They were, that's how they got in the business. It was a legal way to break up AT&T is what MCI was. Which is good for the consumer. It was unbelievable for the consumer. But, you know, what's funny is we've kind of, gone all the way back around. There's not so many phone companies. I mean, when we're talking about who I was managing, there were probably a thousand, two thousand, three thousand phone companies

in the United States when I was in the carrier market. People never heard them because it was like the, like I said, the Matthew Cox or whatever, the Walt telecommunications. They were just popping up every day. It's like cryptocurrency. Yeah, like everyone's got one. Yeah, exactly. You'll be talking about those in episodes that come, I'm sure, because that's the next big scam in fall. going to be just as it repeats itself telecom was was is a great example of of how it relates to housing it relates to crypto it really you know it repeated itself telecom was really the boom that you know tells you about like where how scams begin and you know how they start off really good and then they end up really poorly right right yeah um so okay so at what point like i mean

managing all these these different um carriers right yeah so bill billion a month billion dollars a month and every periodically you're giving them a note or you know they're because i know i'm sure some of them are scam i mean i know people guys that are running like scams right now and phone rooms and they'll buy the lines sure they buy this and then they set up a phone room they run for six or eight months or until questions get answered then they get shut down and they move somewhere else and it's like you know it's like they have it down to a science or they think they always think you have it down to a science till you're doing 20 years. And what I'm at what point did you realize things are going bad?

Like I mean, what was that moment where you started going, okay, things are starting to come down? Well, you know, here's the thing that sort of masked a lot of the problems that we had is that 80 to 90% of our business was these giant companies paying their bill every single month. Right. So we're messing around with 20% of our revenue, which is, but it's mostly almost. all of our profit. So you can, there's still tons of money coming in, you know, into the business.

So we're just messing around with this small number of carriers over here where we're having to manipulate it. But when it starts to be really bad, as an example, is Caribbean telephone, owe you 50 million bucks, is a big number.

Now it's like, wow, now it's out of control. The other thing that makes it really difficult is that small telecom companies like, you know, Matthew Cox Telecom is going to make can really hurt you really bad quick into the millions of dollars and that that's when we really knew that we were in trouble is that that we no longer have control we had to start tightening our credit policy we couldn't just let anybody on which we had earlier you know just hey what's your name Matt come on in you know you're on the network so we had to

tighten it and now revenue in your new big profit area is shrinking because you're not bringing on new customers. Now I'm forced to deal with the problem. And the numbers just keep getting bigger and bigger and bigger. And I'm traveling the country. It's very inefficient. I'm out there. I'm really physically, are you there? You owe me money. Now I got to go to legal. I mean, it's a whole process of going through it. And now you realize that this is, you know, really out of control. And so I lost my, I guess the easiest way to explain is my boss left. I had a really good boss. He was a Naval Academy graduate, really good guy. And before we really started to have to really cook the books, he was kind of around and like, I don't know about some of this

stuff that we're doing, but, you know, I'm getting out of here. Right. You know, he could see the wave. I don't want to be here when he comes down. The wave's coming. So I get a new boss. You know, you know, you know, hey boss, I got to let you know some what's going on. We have about $80 million of customers that aren't going to pay us. And honestly, we're, you know, here we are in October, November of the year, but it was about this time of the year. And I said, you know, in about eight weeks, we should ask for a bigger bad debt budget so that we can write all this off and then, you know, clean it up. He says, that's a great idea. I said, what's our bad debt budget for this year? I go, it's 10 million. And you're at 80? Yeah, but we're managing that.

Okay, I've got this handle, you know, buy me eight weeks, and then we'll dump all this stuff. And he said, that's a good idea. And then, you know, a few weeks later, he can, comes back to me and says, hey, they gave us our bad debt budget for the upcoming year. It's $15 million. And I'm thinking, well, 15 is less than 80, right? And, you know, there were a number of things that we talked about. Like, you know, can we tighten our credit policy? Can we improve our reporting?

Can we hire a higher caliber of person to come in? Can we go visit these guys? I mean, there was all kinds of great ideas. But it was like, okay, but that doesn't help me on the 80. But he says, you know, can you help? And I go, of course I can help. You know, I can do what I'm doing. So I do that.

I travel the country and I come back for the one week of the month at the end of the month and I make the books look like what everybody wants. But I can tell you what, Matt, the tide was coming in fast because 80 wasn't the number at the first of the year. It was more like 120. And 120 was getting ready to turn into 200. And I'm still, the numbers are, I've got them at 15. You know, that's what I'm, that's the budget that I make.

And so it's going fast. And then, you know, that's when I have to, you know, talk about being in deep. Now, for a while, you're like, I understand that everybody around me is doing this. Now they're somewhat condoning it and they don't really want to know what I'm doing. And now it's like, if they find out what the hell I'm doing, I mean, this is like a number that's going to get me escorted out of the building. Right. You know, this is like a large number that I'm kind of managing all by myself. And you're not the only person doing, like other people are doing similar.

I got people working for me that are helping me do this. each one individually doesn't know the totality of the problem. Only I do. And, you know, and that takes its toll. I was just thinking. And I'm like, holy shit, man. You know, I got like guys over here is like, Walt, we got to hide this five million. And I go, yeah, but this guy over here is wanting to hide 20. You know, so it was. Can we put it in the closet? No, I've got 40 million in the closet already. I mean, it starts to get really tough. And then that's when I said, you know, I got to find somebody to talk to, you know, I get, and so I went outside. And so I went outside the company. And there was this guy named Harold, Harold man. And Harold was a couple of years

older than me. I was like 32 at the time. He was 34. And he was rich. I mean, this guy had a big Mercedes. He lived three months out of the year in Canada and the rest of the time in Atlanta. And he just lived the life. And he had been a carrier on MCI's network. And I knew him. And he had since left. And I said, you know, maybe I should, I'm going to ask him for a job. I'm going to get the hell. I'm bailing. I'm pulling the rip cord. And so I went to him and said that, I was honest with him.

I said, I told him the story that you and I talked about here. And he was like, holy shit. Yeah. Those are big numbers. I mean, where are the auditors? Where's your boss? I mean, how the hell are you doing this? And I just explained to him, this is what I'm doing.

I'm doing these notes. I'm doing the, you know, and he was like. They're all similar. And my boss and the auditors are all semi involved in. You all understand, I'm not hiding this. This is it. They kind of know what's going on. Yeah.

Yeah. They're not asking a lot of questions. Yeah. But I'm meeting my numbers. Right. Right. But I don't know how much longer I can do it. And so he told me like, you know, why don't you, let me think about it.

And he was a crafty guy and met with him a few more times. And, you know, I became more confident in telling him like, you know, this is exactly what I'm doing. He's like, wow. You know, he's like, you know, Walt, I got an idea. Why don't you stay where you're at? And I think. that I can make these little companies, good, solid companies. Number two, I think I can make them pay MCI. Like, well, that's good too. And number three, I can make me and you a hell of a lot of money.

And I was like, wow, let's do, what's number three about? All you got to do, Walt, is do what you continue to do. And basically, it led to another fraud, you know. Now, what I'm about to, talk about is not something that I would have gone into the company and said, wow, I could have made a lot of money, you know, stealing, you know. I mean, this was like an evolution of like, okay, it was a realization that like, okay, I'm about to make some money. So what's wrong with that? Everybody else is making money. And I'm making a lot of money for a lot of other people at my own risk. I'm taking this risk. I'm not, I don't have 200 million bucks. So what Harold and I devised is like put pressure on one of these customers, Walt, that you don't like.

Pick one, anyone. Pick one that they, that it's going to be difficult for that person to ever go get money. So I picked a company. It's called TNI. They were in the pornography business, 900 business. They owed two million bucks. Called up Mr. TNI and said, you owe us two million bucks or you're going to be disconnected. This guy immediately has got to go find fucking 200 million bucks somewhere.

Right. And, or two million, two million, two million. Two million. Two million. When we get the numbers confused. Two million bucks pretty quick. And he's got to do it within a couple of weeks or he's going to be disconnected. And this guy's upset at me.

You know, like, oh, you don't give me a chance. You know, come on. You knew it was coming. It's got to be coming. It really is my job, right? Well, yeah, it's $2 million. You got the bill. You know what it's due?

So he needs, so he's got to find. And he doesn't have the money. Look, Matt, these guys were going out. This guy had Atlanta Braves suite. He had Atlanta Falcon Suite, Lenna Hawk Suite. He got a private airplane. You know, he got all this. He's got it going on.

Right. But he doesn't have the $2 million. I can tell you that. He spent it on and all that other stuff. So into this guy's office after that phone call is made is Harold. And Harold portrays himself as an angel investor. Give short-term loans to companies like this. And this guy's go, my God, your timing couldn't be better.

It doesn't know there's any relationship. This guy says, you can give me $2 million. bucks. He goes, oh, yeah, we specialize in short-term loans. Tell me what's going on. So he explains it to him. Herald does a little due diligence, brings in like some accountants to look at the books. You know, the books are a mess. A guy hadn't paid taxes. You know, it's just as a... And Harold says, I tell you what, I went to our loan committee and you're a great candidate for us. We're going to take a chance with you. And he got said, well, you've got to get me the money because I have to pay MCI. Right. And Harrow says,

well, look, I've only known you a short period of time. Here's what? we'd be more comfortable with. We're going to wire the money directly to MCI. And once they receive it, they'll give you this, you know, they'll let you know the wire's been received and your account balance is zero. But in return, you're going to give me $250,000 down for putting this deal together just as a fee. Right. You're going to repay $10,000 a week for the next two years.

And you can give me 25% ownership of your company and you're going to make payments to banks in the Grand Cayman Islands. And for whatever reason, you know, the last one. That doesn't sound fishy at all. No, at all, unless you're desperate, right? And so this guy's desperate. He goes, that's a good deal for me. And so there is no money ever wired. There is no money ever wired to MCI.

And then you come in and extend his... Two million bucks, I can make it disappear. It disappears. He has no idea. He thinks it was paid. He gets, and his phone stay on, right? His phone stay on. He gets an invoice and he goes, hey, just got a $2 million payment on it, which never

was made. The guys paid $250,000 that Cayman Islands, $10,000 a week. I'm actually meeting with Harold on the weekends to go over the finances of this small company to make sure that all the boyfriends and girlfriends are off payroll. The suites are sold. We're out of all that stuff. They do become a responsible pornography company. But they're paying their bills on time.

They're paying their taxes. All the things are brought up to speed. They're paying MCI on time and they're paying me. you know, to the Cayman Islands. So it was like a win-win all the way around, right? It's just like... Like, I didn't know. I didn't know any of this, by the way.

Like, I've seen the... It's the craziest thing, though, right? Right. You know, but you look back, I remember I spoke at an Ivy League school, and I told him about how this scam worked, and this one kid spoke up and said, God, if I would have been Hugh Walt, I would have gone to that guy, Caribbean telephone, and taking like a million bucks off of the table to say put it in a trash bag for me and I'll make sure your invoice goes to zero right we can keep this going for as long as you want and I go yeah I guess I could have done that

but that's like stealing you know but this but if you do it this other way it it didn't feel like stealing it felt very it was a big rationalization to be able to do it and and it and then we find another customer and we do it and we do another customer and doing it and then you know before we know it was almost six million bucks, you know, that's in offshore accounts. The money never came through any entity in the U.S., right? These customers are paying it directly to bank accounts down there. This is such a better story than I thought. It is. And you know, it's what the worst part is Colby, is that, you know, like I actually have a little bit, not that I didn't already respect you, but unfortunately for me now, it just actually went up. And I know that's wrong. Like,

I should be like, oh, that's horrible. How do you sleep at night? But to me, I'm like, that's like, genius. It was crazy. And it's, you know, and it's, you know, and it's, you know, and it's, you know, and it's, you know, and it's, you know, and I tell you, in the way that it stopped, basically was, um, I received a phone call, um, from another carrier who said, hey, I was just at this show and I was talking to this other carrier and he was telling me about this guy named Harold who's doing these finances. I want to do that job. I want to do that gig too. Can you put me in touch with him? I was like, yeah, this is now way out of control, right? Because now the victims are running. to me. Right. I was going to say, they're not even supposed to know that you are even, so the fact that they went to you to ask about him. Correct. Now there's a connection that's out there. I'm freaking out. So, and then I said, Harold, we're not doing this anymore. And so we stopped, you know, and I still have money in the Caymans. I was going to say you still got six million. Still got six million. But you know what? This isn't like a normal scam. It was more fun for Harold than it was for me. I got a full-time job. I mean, you know, I'm still doing billing and collections. I'm

still chasing bad guys around that I can't work deals with. Harold's got all the money. And he's an entrepreneur. So he's running around, you know, he's on private jets. And he's going back and forth the Caymans. He brings me back money. Every once in a while I'll go with him. But I'm working my ass off. And, but we stopped and, you know, some months go by.

And my boss calls me. I'm out in Palm Springs, California. I'm freaking chasing bad guys out there at a conference. And he called me, and it was, I remember getting up early. It was like, geez, four or five a.m. in the morning out in California. you know. And he said, Walt, I got a couple things go over with you. One, we get, you know, we got to go to Chicago next week. Number two, you know, we got some requisitions. I want you to,

you know, you got to hire some people, you know, you're falling behind. And I said, I know. And finally, this guy, some, you know, woman in the audit group is bugging me about this journal voucher, move some money around. Can you look into it? And I said, sure, give me the name of the account. And he told me the name of the account. It was Christian News Network. which was one of the biggest fraud accounts that Harold and I had used in our scam. Right. And I was like, oh, my God, I've been caught. You know, it's just a matter of time.

They just don't know it yet. They just don't know it yet. So we talked for a moment more, and then I decided to know where I told my boss. I said, you know what, I quit. I'm not coming back to work, you know, because, you know, I'm freaking out. I'm not even listening to anything after he says that. Has WorldCom bought or merged? Not yet, but we were supposed to be being bought within a few months from.

British Telecom. And that actually came out in the conversation. What do you mean you're quitting? We're getting ready to be purchased. Right. You know, I'm cashing out for well over a million dollars of stock options inside my company. You know, I'm 30, you know, 32 years old. So, you know, I didn't need to steal anything. Basically, you know, to have cashed out. But my, my stock options don't vest if I'm not with the company. I mean, so it's almost like. Yeah, you're shooting yourself in the foot. Like, well, that's just, that's just, you know, No one would do it. No, but, yeah, right.

You got three, you can't hang in there for three, four more months? I mean, come on. He doesn't know what's coming on. Yeah. So they begged me to come back to work. I got all these executives calling me. Well, come back to work. I don't, you know, we'll put you in a different position.

I know you're under a lot of pressure. And then, you know, they start looking at my computers and stuff. And they're like, holy shit. We got a much bigger problem here. Can you walk? Can you come in and internal investigations would like to talk to you? And I'm like, you know what? I'm hiring an attorney.

And then it just went, it just went bad. I mean, then I have, I got banks suing me because I had, you know, I had done some things with, you know, with these loans with some of these carriers. It gets complex. But I had civil litigation going on. I mean, my life just sort of imploded. Man, you know, I got Target letter. Back, this is back in the old days.

I mean, today, FBI shows up. They got flack jackets on. You know, they're busting down doors. They sent you a note. Hey, do you have any Cayman documents? no we don't have any right right you know that's a destruction of justice but you know now they just don't even wait for that anymore they just come in and go get the documents um but it you know it took a while to kind of go through this and you know you were asking earlier about like you know did you know

that what you were doing is wrong well you know clearly i know that i'm in trouble and this isn't going to end well i start finding out about federal sentencing guidelines um and i'm like what is the dollar amount it was it was you know it started off large and then kept getting bigger, but it ended up being about six, a little over six and a half million. Oh, okay. So it didn't get much, they tried to make it more, but they couldn't. Right. Then there was just other things that it was so confusing as about like, well, who lost money here?

The carriers didn't really lose any money, you know, they didn't lose anything. They got a pretty good deal. Like, TNI, as an example, didn't have to pay the $2 million. But they said, oh, yeah, but they ripped me off $250,000. $1,000. And they were, well, but you owe $2 million. You owe $2 million. MCI was really grossly marking up these, you know, these minutes. And so it became really confusing. How much money was it? Was it really worth? And so they just used the net number that we had received, which is a little over $6 million. And they could have gone way worse than

that. It could have. Like nowadays? Nowadays, well, see, the guidelines were different than. They were lower. They were actually lower for dollar amount then. And I, and I, and I, and I, and I, and I, it And I cooperated. You know, I pled guilty. I cooperated. My buddy Harold decided, I told him I was going to go, I said, look, we're toast. Yeah, we're done. I'm done.

You know, so I'm going to turn myself in, oh, you know, this is going to blow over. It's not blowing over. You're not going to blow over. Yeah, it's not blow. Especially when, when you're going through this, is now the merger happening with, with. So here's what's happened is interesting about the merger, because I want to bring it home to those people, and even you, like, who know about MCI WorldCom, how did this happen? I'm going through all this.

I'm pleading guilty. I pick up the Wall Street Journal, and in the Wall Street Journal, it says MCI slash WorldCom's carrier division, resale division, the division that I was over, is announcing a one-time write-off because of things that have, you know, some bad debt that they have. It was $687 million. So that was the beginning of the end. It was like, holy shit, that's a lot of money. The SEC wanted to get involved.

Right before WorldCom bought, you know, was going to buy MCI, British Telecom was in the last stages of buying the company. I can't remember exact numbers, but it was like, I don't know, 50 billion. And then British Telecom said, you know, we've kind of looked at your books, and we think we might want to go down to like $42 billion. and MCI was pitching a fit and WorldCom comes in and says, we're not only pay you 50, we'll pay you 60.

British Telecom was given $1 billion to walk away from the deal so that WorldCom could buy MCI and then they combined the two companies and then that's when all of shit broke loose. And WorldCom had been on a rampage of buying companies, buying companies. And they were cooking the books on their side as well.

Yeah, that was their money made. of their money-making scheme was to continue to acquire additional companies. Acquire right off as you go, try to, you know, bury some bodies as you go. And then a lot of people forget, WorldCom had a bid to buy Sprint. And when they bought Sprint, the board of directors at Sprint approved the merger. And the FCC stepped in and said, no, you can't do it. And after that, that's when all the bodies were found. That's when all the accounting fraud was found.

So it took a little while to come out. but what was the total do you know the number for the total fraud yeah they were hit yeah i think it was uh 12 and a half billion it was a large number large number and that only happened basically over a short period of time within like a year i mean that was the amount that they you know they had hidden hidden and then really a heavy transactions took place to hide you know i think i can't be expenses and equity and all it just it was pretty complicated

Right. And so your loss, the loss that you had covered, was in that loss. Yeah. But by that point, you're already, are you, are you in prison yet? Yeah, I'm, yeah, I'm in. So you're watching this on the news. Matt, there is nothing that brings more joy to somebody in prison than seeing someone who's in more trouble than they are, right? Because I'm like, I'm already, I knew I'm in trial. Here I am. But I said, these guys are going to jail.

How much time did you get? Forty one months. Oh, okay. Yeah. Did you go straight to a camp? Just straight to a camp. Okay. Yeah, I went straight to a campus, Jessup, Georgia, and then Edgefield, South Carolina,

because they had up the Ardap program. So I went to, which I didn't even know about it. It just started, you know, back then. Right. So I'm wondering, so it's, I know that several of the people in WorldCom ended up getting small sentences, you know, 18 months, five years, three years. A lot of these guys got small. But then the main, the CEO, was it of, of, Bernie Ebers. Yeah, what do you get, 25 years? 25 years, yep, and he spent all of that time in prison and was released earlier this year

and passed away within a couple of months. Yeah, he was released on compassionate release and then, you know, passed away. Yeah, so he had spent, and look, Bernie Ebers, just like the MCI's founder's guy named Bill McGowan, Bill McGowan's smoker, drinker, entrepreneur, have fun party, and that's what our culture was. And it fit very well with WorldCom. Bernie Ebers was a junior high school basketball coach and had a super, super frugal, but then got super greedy as time went on. He did, but he had a big breakthrough in telecom happened when a buddy of his had a hotel. And he said, hey, you know, it's a small hotel, I don't know, 50 rooms or something. He says, look, I'm going to invent low,

long-distance discounters, so that when they pick up their phone and their thing, they get like a lower rate than they would if they were to call from that hotel room across the country, because that used to be a really expensive phone call. So that's what he started, long-distance discounters, and then he got another hotel and another hotel and another hotel, and he had their long-distance riding pretty much on MCI's network. And then he turned that into a company called LDDS, and LDDS went to WorldCom. became WorldCom, and he had these visions of buying AT&T one day.

But it was a success story. He was a crazy entrepreneur, and, you know, he did well. I was going to say, I mean, it's funny because the, like, I watched a documentary on him, how, like, he was so, like, just cheap the whole way through. Right. And then towards the end, it just got insane. Like, he was blowing tons of money on yachts and houses and jets. And it was like, timber.

What happened? Thousands and thousands of acres. And most of us, what was interesting is that like a lot of his, his wealth, you know, the things that he enjoyed in life were debt. Debt related, that were collateralized by his stock price. Okay. So when the stock price fell, he really has nothing left. You know, they just took everything from him. I mean, he really, he held onto his stock, you know.

He wrote his stock to the end and, you know, lost, consumption. considerable amount of his wealth. There wasn't along with everybody else. So he was a very unique guy, but you're right. He had all these stories about being frugal, about, you know, the amount of coffee that they were. Stop, stop paying for any of the employees. Everybody's got to buy their own coffee, you know, all that kind of stuff. He was just spent $40 million on a new yacht.

Yeah. What are you doing? It was marketing. He thought of his his marketing, you know. I mean, I don't know. He was an interesting character, and he was, you know, cowboy boots. just a nice, it was a good stick. He was a nice guy. He'd buy your drink. He would he would talk to you. He could talk about anything. It's like Sarah Palin, you know, first thing

she does is sell the, sell the jet or the, the state-owned jet, you know, like I, you know, it's great, makes for a great sound bite, you know what's really happening behind the scenes is something completely different. No, no, that's, that was very true of WorldCom. And there was, you know, there were really bright people that, you know, got involved. And a lot of the reasons, you know, that you, I know you guys talk about a lot of, you know, true crime and but, but basically the way the federal system is, if you can turn on somebody, you're going to get a much lesser Senate, significantly less than the person you turn on. And to, to nab a CEO is like the ultimate prize for Justice Department. I mean, that was the ultimate. And even their

CFO, Scott Sullivan, he, um, he, um, I think he got five. years significant sentence but you know for a 12 billion dollar yeah that's not not that much so you know i i it's funny too because i go back and forth on that like sometimes i think you know it's you know it was a hundred million dollars like like that guy should have got 20 years but then i i go back and forth and then i think you know he didn't he didn't kill anybody you know i'm saying it was he cooked the book he changed some numbers around like so i kind of it's like okay so you're going to give a rapist 10 years you can't give this guy 20 sure you see what i'm saying so it's It's the sentencing guidelines of the people that come up with them.

I mean, it's a balancing act. Like, it's never going to be fair to everybody. So every time I think about that, I'll think, you know, this guy, oh, there's $300 million in. He got five years. That's ridiculous. But then I think, yeah, but he didn't hurt anybody. He didn't physically harm anybody.

You know, he cooked the books and nobody lost money. It was a bank loan. The other thing I'll add to that, and this is something I've thought about to, is where are the regulators in this business? You know, there are a lot of people with oversight who didn't get prosecuted. I mean, let's go to like... Bernie Madoff is a great example. You know, Bernie Madoff, they said, what is it, $50 billion?

All right, I'm going to give Bernie a billion. The other $49 billion should be on the SEC. Yeah. Because where in the hell are they? Right. And he wasn't looked at several times. Like they never followed up. Correct.

They never did their due diligence. Like he said, oh, here are the transactions. They never looked into it. Where's that guy? Where are those people that, you know, failed to do oversight? And I'm not justifying what he did. But I'm just saying, look, after a while, if you're, what's the purpose of having regulators and oversight, you know, and there's a lot

of pressure on these businesses and they need to play by the rules. And when they step out of line, let's whack them early so that instead of later. You know, it's funny about that. Like, I actually just did an interview in Oklahoma City with an elected official over the public records, right, system there. And I was asking him, I'm like, yeah, well, if I provide you with a document like you like you're going to record it he's like yeah we have to record it I said right I understand but I said if it if it does what if it doesn't look right he's like well we have to record it no matter what I said so if I write it in green crown right you have to record and he said yeah but you could look at like why don't you call you can call and he goes

no no by law we're not allowed to call right so I come with a fake satisfaction of mortgage for a 300 thousand dollar $300,000 mortgage I have a fake satisfaction as long as it, he goes, as long as it has this notary stamp, the OR book and page number match up, and I can match it up. He said, and you paid the fee? He said, we record it. We cannot call. He said, even if someone's saying, this is fraud, he goes, nope, can't call.

He's legally we're not allowed to call. He's like, that's why this fraud happens. And I can imagine the SEC has those same types of, of constrict, to a degree. Sometimes people, you know, they'll say, well, you should have this, you should do that. But sometimes it's so regulated. right that they can't i remember i talked to the fbi i one time and i was like why don't you go into brokers and give them a scenario where they have to make the loan go through they have to commit for fraud has to be involved like i can come up with like five scenarios where you go in and say this and this

there's no way to make that loan happen unless fraud's involved right and they said well we would that would be us interfering with commerce and i went and she said we're not allowed to interfere with commerce and i went let it go down i said so you have to let it happen right and Then come in, she goes, exactly. I go, so I said, well, I go, like, that's good to know. For me, I know that if we actually schedule a closing, that means that nobody, there was no, there was no, nobody, I wasn't being set up. If there's a closing schedule when I get there and I sign, like, I know that the FBI

wasn't involved because they wouldn't be allowed to be involved in that transaction. I mean, it's those kinds of things that you go, this is, this is insane. Like, if you know those things, then you can run rampant. Right. Right. So, okay, so. Back to, well, we'll go back to my story real quick, though. That's all, that was good.

I do, you know, Harold ended up getting five years, Canadian citizen. So he just had to go to a low. And he was deported and hadn't heard from him since. There's a couple of other guys that were involved directly in mind. And they did, I think one guy got five, another guy got five years. He was an attorney, you know, you get the enhancement for the attorney. And then another guy did, you know, 18 months. So I got the enhancement for being a mortgage program.

Yeah. You're in a position of response. But anytime you're in a white collar crime, sophisticated. Sophisticated. Yeah. I was love it. You know, now they'll say using a specialty device in furtherance of your crime, which means, it's like, what was the specialty device?

You used the computer. Yeah, it's a cell phone. Who doesn't use a cell phone? Like what? Exactly. So, okay, but you went to prison. You got out. And then you started doing, you start, I know you started consulting and you started doing, like I've seen you online where you're doing the speeches.

Sure. Or keynote speeches in front of universities and MBA programs. Yep. The oddest way I got into that, Matt. I was walking the track in Edgefield, South Carolina. And the warden comes up to me and says, hey, the FBI wants to talk to you. And we've, you know, like Monday, he says, you know, we got a conference room on Wednesday. You used to go in there and, you know, talk to them.

And I was like, about what? I don't know. They want to talk to you. And, you know, that's a holy shit moment, right? Yeah, yeah. I was like, you know, I don't want to talk to. I'm already in trouble. I'm in trouble.

I'm done. I'm getting ready to. I'm getting out of here. They forgot to charge you with this. I got like six or seven months to go. I mean, it's like, what, and it was agent Ray Kyle, who had worked on my case. And he said, hey, I got an opportunity for you.

I mean, do you want to train some FBI agents and U.S. attorneys on the Enron and WorldCom Task Force? And I was like, well, how the hell am I going to do that? And he said, well, they want me to give a presentation, but I really don't like speaking in front of people. So can you do it? And he says, I'll just be up there with you. I'm just going to introduce you. And you can tell them what you did. And I pretty much told him the same story that I told you today.

Right. And except I did it as an incarcerated inmate in front of 300 U.S. attorneys and FBI agents in my first public. I was incarcerated. They came and got you and moved you? Came and got me and they moved me. They put me on an airplane and took me to Marina del Rey, California for three days. And the FBI, it was just well received. Nobody had ever done it before except for one other guy.

And his name is Frank Abagnale. I was just going to say that's like Frank. That's some Frank happening now. So the handler for Frank was there and he said, hey, Frank's getting ready to have this movie made about him and he's getting older. Would you come to the FBI Academy? And I was like, wow, you know, this is just crazy. And so they got me speaking events.

The FBI worked and get me speaking events after Enron and WorldCom collapsed. Business schools were looking for ethics teachers and ethics, you know, I had the FBI on my resume. And, you know, spoke probably now to over 100 schools. I did new hire training for KPMG, new hire auditors for 17 years. And, you know, it just became a way to, you know, try to get back. You know, what am I going to do, you know, when I get back out? And the other thing is, Matt, is I enjoy it. I mean, it's been a lot of fun.

I meet interesting people. Right. Right. And about 11 years ago, I was approached by, Neil Weinberg, who co-wrote the book, Stolen Without a Gun with me. And he said, hey, would you start writing for Forbes, a blog? And I've been doing that for over 11 years. And then I started writing for NYU Law, again, on white-collar crime.

And, you know, it's just these stories are fascinating. I mean, the work that you're doing is amazing. I mean, you know, I think that that's, you know, people can learn from these. I mean, we can, you can look at a crime like the one that I committed or the one that you were involved in and you can, you know, you can sort of get a, wow, that's crazy, you know, but I think there's also a deterrent in that too by telling people like, hey, you know what, there's, it never works out. It's always a bad ending, you know. I mean, you're never going to be able to interview the white collar guy who said, man, I stole 15 million bucks and I got away with it. Right. So unless he was the CEO of a bank somewhere, you know, those guys get away. And kept it. And committed another fraud by keeping money. Those stories just don't exist, right? Well, I was, you know, it's funny because being in prison, like, you're like, okay, so when we initially, I was locked up when we first communicate with each of them.

So I remember. How the hell did you find me? I don't even. Okay, so I think it was Marcus, you'd written a letter to Marcus Shrinker. Yeah, yeah. And he showed me the letter. and I had somebody else had also had a letter from you or had also. I think I was looking for material at the time.

That's what I was. I was starting to write guys in prison. I could look them up. I could look them up on BOP. I'd find out about there. You're exactly right. I remember doing it. It's like, hey, who are you?

I'm on core links. I'd like to communicate with you and then I can write about your story. Yeah, exactly. We started communicating. And I remember, and when you kind of explained what you did, I remember thinking, maybe I could do that. And you were like, you could definitely do this. Right.

Get you on a, you could start talking a keynote speaker, blah, blah, and we talked about it. And I remember that there were so many guys in prison that have done frauds that are fascinating. And everybody I met, like with the exception of you, everybody I met that was in, that I would consider a con man that was in prison, were all actively trying to figure out how do I get out and bury this? Like, how do I hide from this? Right. I was the only one that was saying, no, I'm not going to hide from this. Like, like, I don't want to spend the rest of my life lying. Like, lying is what got me here.

Right. So I'm not thinking that by continuing that behavior, my life's going to turn around. And I need to turn, I need this to turn around. Right. And you were the only person that had, like, was sitting there. I was looking at it. I was like, this isn't Frank Abagnale, who's kind of like, it's like the criminal the lecrum of like thinking oh that could be me because i don't because i was thinking that's

impossible like he's got to have a movie he's got or he's got a movie he's got all this stuff but i'm like the real people that i can actually talk to and connect with like this guy's writing me letters this guy's doing this guy didn't run from this this guy said look this is what i did and i screwed up and and here's what i'm doing now and and deal with it right and i thought this is what i want to be this is the guy that i want to emulate you know so so so that's when i started thinking along. I was already writing stories. Yeah, you were, and they were good stories. You were sending me a lot of stuff, and I'm like, I don't know what I'm going to do with this. I can't, you know, but you're handcuffed in prison. I mean, you really are. You're, I mean,

it's like there's just nothing that you can do and you're trying to, and for somebody to really, you need an agent that comes out there. You need an advocate. You were the only person that was saying you can do this. Yeah. Everybody else is saying, get a job, working. This format that you're doing now didn't even exist when we started writing. Yeah, the last couple years, when I got out, people started coming, when they saw me writing, they started coming to me with stories about true crime podcast. And I was like, I don't even know what is a podcast. Like the word did, podcast didn't exist.

Right. People don't even realize that podcast is a made up word, which is combined from what. It's like, there's two different things. It's a, like a broadcast and pod or whatever. Like it's a portion of a broadcast. Like it's a made up word. that developed while I was in prison. It didn't even exist before I was in prison.

So all of these things, and you were the, like I said, you were the only person that was saying, this is what you can do, and this is what I am doing. And when you get out, contact me. Yep. I remember I tried to get you to come into the prison and you sent your stuff in. But in it, you know what happened? I think I said that I wrote for Forbes, right? You wrote for Forbes.

And because of that, my counselor was so brain dead that he was like, he was like he, he's a reporter. And I went, yeah, I know his counselor, Carrie. And I go, I know Carrie. I know he's a reporter, but he's not coming to see me as a reporter. He's coming to see me because we're thinking about writing an ethics and fraud course. And he teaches, he speaks at NBA programs around the country. And I could do this. He's saying I can do this.

And he's like, he's a reporter. I understand that. I said, Carrie, I said, listen, if my mother was a reporter, would she still be able to come to see me? Right? And he goes, all reporters have to go through the public information officer. And I was like, no, I, and I'm looking at him, I'm thinking, you're the perfect BOP employee. Yeah, you are. You don't get any better than you.

And I just was like, yeah, okay, we're good. Thank you. Like, I'm never getting through to this guy. No. Never. No. So you never. Yeah, I think, I do remember.

I think you may have told me, say, can you submit another one that doesn't say Forbes on it? Right, right. And we, yeah, I think. It was probably too late. Yeah, yeah. I needed a whole new counselor to be involved. And this guy is my counselor. He gets all this.

Like, it was never going to work after that. Yeah, he was, God, there's just so bad. No, that's good. No, but this is good. You know, I think these sorts of platforms, being able to tell stories, you know, I think that places like American greed on CNBC is an example, don't do justice to a lot of the things. Well, they have to villainize you. Right.

And they're rarely talking to the person who perpetrated the crime. crime very rarely they're talking to like all the investigating oh yeah i busted his ass and you know and all and so you get this one side of the story you don't really get you know the other you know what happened you know hell i was there you were there right what and there's no we have nothing to gain by saying that something else happened that didn't happen i mean i find defendants in cases much more believable than the authorities yeah because the authorities rarely understand exactly what the guy did and they just got to make up a story and it's just like Like, this is our narrative.

And you always have to be an extreme villain. Correct. Like my crime, they had, they went, they actually, in the, they actually went with like the whole, he prayed on single mothers. And it's like, prayed on, listen, in that period of time, I dated five women. Three of them had children. Why don't you talk to the other two? You know?

Like, well, because that doesn't, we're going with the, you, you prayed on single mothers. Like, why? Because that was a, that was a big thing then. Right. Right. Protect single mothers. mothers and this guy's a horrible, what do you talk? Like, you don't see, they, they have to come up with something to make you a horrible,

horrible individual. And it was like, and that's one of the thing, one of many things they grabbed out. It's like, I just did an interview in Amsterdam for a documentary. And they were like, well, we need to talk to some of your victims. And I said, oh, I said, you know, Bank of America is still open. You can talk to. So I start naming off banks and they're like, well, we were thinking, you know, like individuals. And I went, well, there's, there's four individuals in.

my case that lost money. None of them that I stole from directly, but they did, as a result of my crime, they ended up owing money. And I said, so, you know, you've got over 55 banks. So you want to come up with a segment that, a segment of that victim list that represents the victims in my crime. I said, then you should be talking to banks. Right.

But that doesn't sell. No. They want someone to get on there and say, oh, I lost $9,000. Yep. No, you're right. You're right. But that's the beauty about this format. I mean, you're, you know, I think you're cutting down to like, you know, just tell us what happened. Yeah.

You know, it makes it, it's easier to understand, too, than the other stuff, I think. You know what I mean? And so, I mean, I do think that more of these stories need to get out there. I was talking to somebody at a business school and I said, you guys ought to stop teaching ethics here to these students and start teaching federal sentencing guidelines. I said that the whole time. It's terrifying. No one's ever even heard of them before. I never heard of them. You know,

when they start looking at points and all these, you're like, wow, that's, I mean, why are frauds that? I don't have to actually receive the money in order to get punished for it.

I mean, like insider trading is a great example. If I work inside of a Fortune 500 company and I handed you 10 grand, or you paid me 10 grand to go trade on stock because I'm going to give you, oh, we're getting ready to,

you know, this other companies are getting ready to merge with us and buy us. You know, and I, see, you're going to give me some money for that. You gave me 10 grand, and then you went out and traded on it, and you made 10 million. I'm on the hook for 10 million. Yeah. I got 10 grand. I mean, a lot of people, that's your guideline.

Your guideline sentence for, you know, somebody, like, I'm just giving you some information. I didn't make that much money. Yeah, they have no idea. They have no idea. Like, crazy. I know a guy that got 30 years because he sold heroin to this guy. This guy sold the heroin to somebody else. That person OD, he got charged with, you know, he got charged with the murder.

got 30 years. Yeah. You know, and it's murder. It's like, oh, no, it's an accident all over. If no, murder, we're charging with, you know, with a death and a, you know, it's like, well, I didn't sell it to that person. Serious, serious, serious time. Yeah.

You know, serious. And there's, there's segways to say, okay, I kind of get that. But, and that's okay. If everybody understood that that's what the game is, right? That's how it works. You would say, hey, better not do heroin because if somebody, you deal in that and somebody dies, the risk is I could go away for a long period of time, you know. I got the same thing.

I know another guy named Brandon in prison who got like 20 or 25 years. Same thing. He was a bouncer at a club. Some girl was taking oxy and she said, look, I, I, she asked him, do you know anybody that sells oxy? And he said, well, I know a guy that sells like heroin. He might have oxy. She just, what's his number? Gave her the number.

Two weeks later, she died because that guy gave her heroin. You're in. And that's it. You're involved. You're just got charged with your murder. You're a murderer. You're involved. I gave her a name.

I didn't make a dime. I, you know, it's, they're young. They were all young. early 20s and, you know, he thought he was, he literally thought he was doing someone a favor. Yeah. No. So it's just, yeah, it's just, it's just ridiculous. Same as in white collar crime.

There's all these different segways, you know, ways to get in trouble that you didn't envision in a bad spot. Most of the time you should walk away, but it's really. Oh, now? Now somebody says, hey, man, can you give me a phone number? No. No, no, but can you talk to me like, you, I'm not asking you to do anything. I get on Messenger all the time.

I'm like, bro, I actually did a whole video on it. It was like, I actually had a guy fly down from New York one time who had basically tried to be like friends with me. Like he was a fan and we were friends. And then he actually six months this went on. Then he flew down, met me at a coffee shop and tried to convince me to teach him how to commit a bank fraud. And I was like, I said, do you understand I'm already on the indictment?

No, no, I'm not asking you. I will say nothing. First of all, you will. But let's assume you didn't. It doesn't matter. My phone, my phone number is in your phone. Right. Our messages are on the phone.

Now you have, we've been making phone calls now that you've flown here. Like, nobody's going to believe that you flew here and I didn't help you. Right, right. I said, I'm all, they won't even question me. They'll just put me down on the indictment. Right. One day they'll show up and arrest me. I said, it won't matter.

I said, I can't get on, the people don't realize that I can't now go to trial because I can't get on the stand. Right. Because they'll say, Mr. Cox, you've been convicted of fraud a few times before, have you? It's it. I'm done. Yeah, not credible. Right.

I said, I'll basically have to walk in and just say, look, man, just like, what's the best deal I can get it. Do you feel you did anything? No, I don't feel I did anything, but I got to take a deal. So how do we do this? Right. Horrible. But yeah, definitely the guidelines would be scared that crap out of people.

Yeah, it's good. They're good to know. Good to know. You should know what the perils are of not following the rules. Right. So I mean, I think, do you have anything else you want to say? No, that's great. That's good.

All right. So this one? Yep. All right. It's so funny because I'll say a point. and I'll say this in the thing. I'll be like this one. Like, we don't cut out anything.

Okay, hey, I appreciate you guys. This was Walt Pavlo. I appreciate you watching. If you like the video, do me a favor. Subscribe. Hit the, hit the thumbs up button. Hit the bell to be notified. Leave a comment for the algorithm.

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