The Chris Voss Show - The Chris Voss Show Podcast – Pirate Cove: An Insider’s Account of the Infamous Southport Lane Scandal by Richard D. Bailey

Episode Date: February 6, 2024

Pirate Cove: An Insider's Account of the Infamous Southport Lane Scandal by Richard D. Bailey https://amzn.to/3w8C4U0 In Pirate Cove, Richard D. Bailey provides an insider's chronicle of a white-collar crime whose headline-grabbing elements first appeared on the front pages of The Wall Street Journal. It's the true, unvarnished, complete, previously untold, and fascinating story of how one honest man helped unravel the massive Southport Lane fraud perpetrated by the author's former employer, 26-year-old, self-proclaimed financial prodigy Alexander Chatfield Burns. A really smart friend of the author once asked Burns how he got control of four state-regulated insurance companies. With a Cheshire cat grin, Burns cryptically responded, “Jesus with a telescope on Mars couldn't figure out how I did this.” But the author eventually did. If (and when) Pirate Cove is made into a movie, it'll stand right alongside such successful dramedies as American Hustle, Can You Ever Forgive Me, Bad Education, White Collar Crime, The Wolf of Wall Street, and Michael Clayton. Richard D. Bailey is the author of Pirate Cove, released by Bancroft Press in November 2023. For over 30 years, he has been providing interim and long-term management, and corporate development services to distressed public and private manufacturing, service, and distribution companies. In 2013, Bailey was hired by Southport Lane Management (“Southport”), a New York-based private equity firm. Shortly after he was hired, he noticed unusual cash transfers by and between multiple Southport-owned and -controlled LLC’s. Upon further investigation, Mr. Bailey uncovered critical evidence of what would turn out to be a $350 million fraud. He then worked closely with FBI investigators for several years. This resulted in four indictments and four guilty pleas. Three of the perpetrators served prison time. In late October 2021, Alexander Chatfield Burns, the leader of the fraud, committed suicide prior to being sentenced. As a result, with millions unaccounted for, in the eyes of the law he died an innocent man. His book, Pirate Cove is the true story of a fake Caravaggio, a bogus Yale degree, a 26 year old self-proclaimed genius, and the unraveling of a $350 million fraud. He holds a BA from Providence College and an MA from Fairfield University.

You wanted the best. You've got the best podcast. The hottest podcast in the world. The Chris Voss Show. The preeminent podcast with guests so smart you may experience serious brain bleed. The CEOs, authors, thought leaders, visionaries, and motivators. Get ready. Get ready. Strap yourself in. Keep your hands, arms, and legs inside the vehicle at all times because you're about to go on a monster education roller coaster with your brain. Now, here's your host, Chris Voss. I'm Oxys Voss here from thechrisvossshow.com. There you go. Welcome to the show, ladies and gentlemen. We certainly appreciate you guys being here. As always, the Chris Voss Show is the family that loves you but doesn't judge you,

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and the knowledge of helping people improve the quality of their lives. The Chris Voss Show and the great authors and minds we have on the show, none of which are me. I'm just the idiot with the mic. Go to goodreads.com 4chesschrissvoss, linkedin.com 4chesschrissvoss, the big LinkedIn newsletter, the 130,000 LinkedIn group over there as

well. Chris Voss Facebook and Chris Voss 1 on the TikTokity. For 15 years, we've been bringing in the CEOs, the big LinkedIn newsletter, the 130,000 LinkedIn group over there as well. Chris Voss, Facebook, and Chris Voss1 on the TikTokity. For 15 years, we've been bringing in the CEOs, the billionaires, the White House presidential advisors, the Pulitzer Prize winners, all the people who bring their amazing stories that you can help learn in life, or at least they're fun and educating as well. Today, we have an amazing author on the show. We'll be talking about his latest book that just came out, November 7th, 2023. It is called Pirate Cove, an insider's account of the infamous Southport Lane scandal. Richard D. Bailey joins us on the show today. He'll be talking to us about this amazing story that he uncovered and take you through

all the sorts of different things that go on with. We'll just get into the book and then he'll be able to tell you. I'll keep you in suspense. How about that? He is the author of Pirate Cove, released by Bancroft, if I can learn how to spell today, Bancroft Press in November 2023. For 30 years, he's been providing interim and long-term management and corporate development services to distressed public and private manufacturing service and distribution companies. In 2013, he was hired by Southport Lane Management, a New York-based private equity firm. Shortly after he was hired, he noticed unusual cash transfers by and between Southport-owned controlled LLCs. Upon further investigation,

he uncovered critical evidence of what would turn out to be $350 million in fraud. Will they take a check? He then closely worked with FBI investigators for several years, resulted in four indictments and four guilty pleas. Three of the perpetrators served prison time. In late October 2021, the leader of the fraud committed suicide prior to being sentenced. As a result, with millions unaccounted for in the eyes of the law, he died an innocent man. His book, Pirate Cove, is a true story of a fake Caravaggio. Fake Caravaggio, yep.

Caravaggio. I just learned a new word today. This is why we do the show. A bonus Yale degree, a 26-year-old self-proclaimed genius in the unraveling of $350 million in fraud. He holds a BA from Providence College and an MA from Fairfield University. Welcome to the show, Richard. How are you? I'm well, Chris. Thank you very much for having me. Thanks for coming. We've laid out a whole show here of interesting, fun, and this sounds like FTX Junior going on over here

with what you guys had going on. So give us dot coms. Where do you want people to find you on the interwebs? First of all, you can find me on rdbailey.com. My Twitter handle is rdb underscore. There you go. Yeah, underscore Bailey. I'm sorry. I forgot about it. We have underscore Bailey. I'm sorry.

I forgot about it. We have to have the dot-com part. Otherwise, you know. I know, I know. It's Twitter, you know. Oh, that's true. It's rdb underscore rdbailey. There you go.

There you go. Give us a 30,000 overview. We kind of led into it, but people want to hear it from your voice. Tell us a little bit about the inside of this book. Okay. You know, I was once told, I read once somewhere that the crux of a good story is you throw an ordinary schmuck, which made me in this case, into an extraordinary circumstance and see what happens. You have a life in this podcast.

In 2013, I was hired by a private equity firm named Southport Lane, as you mentioned, and they first sent me to a pharmaceutical company in Northern New Jersey to do some due diligence on an investment they were going to make. I came back and they were not very good at private equity investing. And I came back and the 26-year-old prodigy said, should I buy this company? I said, no. And he just looked at me strangely. And I said, he goes, why? I said, because you're going to lose all your money. You know, so they hired me to run this very struggling, financially insecure vineyard out on Long Island called Leib Cellars that they had that was worth about $5.7 million.

And they paid $12 seven five million dollars cash. So I go back to the point. These guys weren't very good at this. I start running the company. I start noticing that there is cash transfers that make no sense. Large sums of money coming in, going out. And it's like, OK, now what do I do? And ultimately, I went and figured the whole fraud out and then to jump to the middle of the end i went to the fbi i wound up with the fbi that was a circuitous route as well and i wore a wire and stuck cameras into meetings and everything you know everybody got arrested except me thank god yeah and know, the companies went away.

This is crazy, man. This is a crazy story. It's true. It was on the front page of the Wall Street Journal, too. There you go. People can Google it and pull it up. We're going to delve into the book. Let's get a little bit on you and your background. People like to know who you are and get sold on you, too, as well.

Tell us how you, you know, what were some of your journeys that got you down this road, got you into this situation? You know, I did work what's called workouts and turnarounds for about 30 plus years. Now, no one grows up wanting to do workouts and turnarounds in corporate. I mean, it just doesn't happen that way. And you don't do it until you realize that you're in one. I got a job at the end of the 80s at a steel mill out in western Pennsylvania. It was a classic 80s LBO. It was worth $6 million. They paid $8 million, borrowed $10 million. And in 1991, I was in bankruptcy. And that was kind of fun for me

because I liked the pace of the bankruptcy and trying to figure out and trying to make people happy, trying to sit there and do deals and things like that in order to sit there and just get yourself to payroll this next Friday. So I spent a lot of years doing stuff like that. So when I was contacted by Southport Lane, you know, the guy, the president of Southport Lane, who was not involved in any of the criminal activity, was a close friend of mine for about 20 years. And he said, you know, this vineyard's a mess. And I was like, okay. And, you know, I said, that doesn't scare me. I said, but, you know, I don't know. I don't know anything about farming and, you know, wine and agriculture and things like that. And, you know, he was like, if you want to get paid, you do now.

So no, I literally spent a lot of years just fixing other people's problems, corporate problems. Sometimes that means putting Humpty Dumpty back together again. Sometimes you can do it and you can make a lot of money doing it. Sometimes you find a company that just doesn't deserve to live and you perform the last rites, bust it up and sell off everything and just let it go its own way.

There's a lot of people that make an awful lot of money doing it for the big companies. Cutting it up and putting it into pieces. You know what you should probably hit up next is that Sports Illustrated. Evidently, it's kind of funny. I know.

They just laid everybody off. Yeah. I mean, that's pretty. I guess the name of Sports Illustrated is owned by two firms that owned it. And whoever's running Sports Illustrated or leasing the name didn't make their payment. So the two firms said, no, we'll take that right back from you. then once you take the name sports illustrated back it's kind of like you know you got nothing you could probably you know borrow the kmart name but that probably doesn't work for at least that's second i think everyone leases kodak my my dogs lease the kodak name i've seen

that slapped on so many different things. Let's delve back into the book as we go. Is this the first book you've ever written? It is. It is. You know, my 95-year-old mother, after all was said and done in 2018, she was probably 90 at the time. I sat down and told her the story. And she was an old school teacher.

And she looks at me and she just says write it down this is a great story so i did i started writing like one chapter a week and you know it was kind of difficult because not that the writing part wasn't difficult but you know i didn't really have an overarching like you know there was no ending to the story at this point you know that and so i was writing it down so i decided to do it on substack so i serialized it on substack so i would sit there and send out one chapter a week and next thing you know you know people start finding it subscribing you know i built up a little following on Substack. And when I took a couple of weeks off, and this would have been in 2020, I took a couple of weeks off writing it and people started calling me and emailing me

saying, what happened? I want to read the next chapter. So that kind of spurred me into doing what I couldn't tell them at the time is I was negotiating with the FBI on certain things that I can could say and couldn't say because I did some undercover work for them obviously you know I it was I did that and finally in October of 2021 I was literally driving home from Home Depot because we had lost power here where I live in south of Boston and I was buying I bought some some wood for our wood stove and the phone rings and it's the lead agent for the FBI who, you know, when you work for the FBI in a situation like this, you actually get very, very close with that person, you know, because they sit there and they walk you through some difficult times. You know, why am I doing this? How can I do this? You know,

what happens if these people find out? And so he called me and he just said, why am I doing this? How can I do this? You know, what happens if these people find out? And so he called me and he just said, hey, I just want to give you a heads up. And I said, okay, but what? You know, and first of all, this guy never called me directly, you know, for three and a half years, you know, you know, undercover activity, everything started with a text first, you know, you got time for a call yeah yeah that's exactly what happened and so i sit there and i've you know the phone just rings and it's his name and i go okay what's going on and he goes alex burns just killed himself now he was the 26 he was the 26 year old mastermind of this 350 million dollar fraud and i my my you know response

was you know typically profane but then you know i sat there i said okay that's kind of the end of this story and he said yep and even the fbi agent said you can finish the book now you have an ending oh you you have wow so that's one way that's why you get an ending yeah was it i didn't see that one coming put it that way there you go wall street journal cover this the collapse of south port lane's insurance empire so tell us about this young man and is he is he the the key figure in this where he's yeah yeah he's is it is was my comparison to like a ftx junior sort of the same sort of proponents that were going on here this this money was disappearing too? It was phenomenally close because there seemed to be very similar personalities.

Alex was very, very smart, no doubt about it. But he wasn't smart enough to connect the dots on all his crazy ideas and sit there. And if it was his idea, it was therefore a brilliant idea because, of course, he was

brilliant. And he would be the first person to tell you that on many on on a number of occasions he said you know i am richard i am always the smartest person in the room really wow you're saying that he just got yeah you just got to be kind of you know stupid to say that something like that you know he he was very similar and what i I was reading about Sam Bankman Freed, you know, they were very good about going out and basically, you know, convincing people that they were, you know, financial prodigies, that they understood things, a new way of doing things that nobody else did because it had never been done before. And therefore, prying money out of a lot of people. In Alex's case, he bought four insurance companies. And at one point he was bragging of having over $5 billion in money to invest. Wow. At 26. There you go. Note to self, quit saying I'm the smartest person in the room. And so he raises a fund i guess from investors to raise no he no he didn't that here's

the here's the interesting they just took a different path altogether they found some insurance companies that you know were not in best financial health and they convinced the insurance regulators and the insurance companies owners equity holders to sell the companies to them oh wow so how do they pay for the how do they buy the insurance companies they literally printed stock certificates in their office all right they they created i'm not this is this is noble they created they created another company all right with different names and things like that, which would give an opinion as to the value of the securities they just created on their office printer. And then they sent those certificates into a very large bank here in the United States. That bank signed off and said, yep, that's $50 million.

And they used that money, that $ based upon and they use that that money that 50 million they put that on the balance sheet of the company so that was the purchase price and then what happens is you know you've got and here is the real reason they did all this you know you get into an insurance company you've been a distressed insurance company and they're going to have an awful lot of cash that just cycles through on a monthly basis because you know people pay their premiums they pay out you know the claims and it's just a huge it just rains money in those businesses you know they had the extra so they created another set of securities of bogus securities and sold those and sold those to the insurance company they owned

holy and sat there and took that money out. And that's how they bought the vineyard. So you just, why were they buying a vineyard? Because Alex liked wine. And it was owned by a pretty well-known hedge fund manager. And he wanted to show them that he had you know money and you know in financial chops too and you know and also it had a eight thousand a beautiful eight thousand square foot Nantucket shingle style house in the middle of the vineyard you know so it was it was the gorgeous assets out on the east end of Long Island on the north walk in a town

called Kajog just simply gorgeous I mean you know the big beautiful house and it's surrounded by 46 acres of vineyard so this thing's just a huge giant paper float really that's all that comes down to it right yeah just and you noticed that money was exiting the the company was it going to shell companies was it going to the guy oh yeah no it was going to it was going a lot of different directions. When I started asking questions, okay, what's this transfer for? What's this for? I asked one of the attorneys at Southport who sent me the bank statements for the account that was paying all the vineyards bills. And I looked at those.

On November 1st, 2012, $18.1 million came in. All right. The next morning, $3 million went out the side door to something called Southport Specialty Finance, which no one knows where that money went. And $12 million went to, $12.75 million ultimately went to the sellers of the vineyard and you know so when i walked into the vineyard it was you know owned free and clear no mortgage no nothing also was losing you know not only did he overpay by 5.75 million dollars or almost 100 overpayment but it was losing money hand over fist. Wow. So they massively overpaid for this asset for the privilege of losing a shitload of money every year.

So my job was to go in there and fix it. And when I fixed it, and I did fix it, it was still there when I left in 2018. It was profitable and making a lot more money, and it's still out there doing well. There you go. This would be a great movie because there's a lot of these great movies. I'm thinking of the cigarette movie where the one guy goes undercover, I think it was, and stuff. So what makes you reach the point where you're like, hey, I'm not going down with this ship, or was that your thought process? I need to reach out to the FBI. That was exactly my thought process. You kind of put your finger on it very well. There comes a time when you sit there and go, okay, I figured

out that they had committed a felony, at least one that I knew. So I wound up going to a friend of mine, who is a private investigator in New York. You may have heard of him. His name is Bo Dietl. He's also a fairly famous actor. And he arrested John Gotti and all those kinds of... So he was involved in all those guys. So I went to his private investigation firm and we went over it for a couple of weeks. They said absolutely federal crime taking place. Believe it or not, they tried to call the U.S. attorney for the Southern District of Manhattan. They waved them off, you know, and said, listen, you know, we don't want this case. And that's when they sat there and said they looked at me and they said they said, this has to be a federal case run out of Washington.

Wow. So the next step in that journey is, okay, how do I get to them? How do I find out who's running this show, this criminal investigation? If there is a criminal investigation, I just still don't know if there is or not. Oh, okay.

We hire, Bo Dietl recommends an attorney in New Jersey, criminal investigation i just still don't know if there is or not okay i we hire bo diddle recommends an attorney in new jersey michael weinstein who becomes as close to a brother as i've ever had i've got i do have a brother but michael's my second brother and michael is a criminal defense attorney so here i am by the way i haven't done anything wrong and I'm hiring a criminal defense attorney. So, I mean, this is where the road starts to go apart and you start to realize that this is a crazy, what's going on is crazy.

It might be life-changing. Yeah, pretty much was. Now, when you reach out to the FBI, I think that's got to be like, you know, because the FBI is going to check you out too, right? Oh, they did. They did. My understanding of when you reach out to them is, you know, they're going to do their due diligence on you and try and figure out, you know, if the story is right, if they're getting, you know, a bum lead or whatever.

I'll get into that because it's actually kind of funny, the first meeting. You know, Michael is, you know, he's a know he's a pretty smooth silver tongue criminal defense attorney he's used to seeing his clients in handcuffs you know and and you know you can't ruffle his feathers too much all right yeah but he's also a former u.s attorney in or assistant u.s attorney in washington dc so he's he's he understands the pipeline in there yeah so i'm sitting there and this is a moment I'll never forget. I'm in my car. I'm about, cause I live South of Boston. The only way to get out to Long Island every week is through a ferry that between new London and Orient point, Long Island.

So I'm about to get on the ferry to come home on a Thursday phone rings. It's Michael Weinstein, you know Michael. And Mr. Smooth and sleek and urbane suddenly goes, holy shit. He goes, are you sitting down? I said, I'm in my car. I'm driving. And he goes, I just got off the phone. There is a whole task force in main justice in Washington investigating Southport. It's SEC, FBI, and the CFTC. And it's being run by attorneys in D.C. And I just told him, I just got off the phone with the lead FBI agent, and he wants to talk to you. I'm like, okay, that's kind of what we're here for.

So this is a good thing that you turned state's evidence or federal evidence. Well, I haven't done it yet. Oh, okay. That's a good thing. So silly and stupid me, I am convinced that I hand these papers off to the FBI. I turn around and walk away. My bit's done.

I've never been involved in criminal stuff before. I don't know how that works. Weinstein sits there and goes, Richard, they have one question for you. And I said, what's that? Will you wear a wire? And I never saw that coming, Chris. Never contemplated it, nothing. Completely caught me off guard.

I get up and there's actually a bar on these ferries. And I sat there and I had a drink and I was me off guard. You know, I get up, and there's actually a bar on these ferries, and I sat there, and I had a drink, and I was thinking about it, and I'm like, oh, God, I'm going to go home, and now I've got to do the one thing I hadn't really done yet. I hadn't told my wife about all this crazy stuff. I was just going to ask the next question. Were you married, or what was your wife thinking? Yeah, married with two sons.

One was in high school and getting ready to go to college. And frankly, I wanted to keep the job because it paid really well. I'm no angel. I mean, it paid really well. Being a CEO of this little company, once we got it fixed, life was good. So we set up a meeting to go and meet with the FBI. Now, anybody who knows me know that when I get nervous, I get the flop sweats. For like 10 minutes before I'm in a meeting, it's embarrassing as hell, but I can't help it. I mean, this is a big deal, man. I mean, the FBI, we've had FBI agents on. It's a as hell, but I can't help it. I mean, this is a big deal, man. You're going, you're walking.

I mean, the FBI is, we've had FBI agents on. It's a big deal, you know? Oh, yeah. I mean, the meeting's at 1 o'clock. Michael Weinstein says, get to my office at 1230. And for half an hour, he's telling me, you haven't done anything wrong. They're on your side. And he's handing me glasses of ice water to get me to stop smoking.

Which somehow I figured he had done before being a criminal defense attorney you know at the stroke of one o'clock in walks two fbi agents and a guy from the securities exchange committee the commission criminal investigation division and we start the interview and you know the first thing they do they pull out their badges and things like that and you know the first thing they do they pull out their badges and things like that and you know but you know understand by this point i've got bank records i've got quickbook files that i put together you know i've got everything i've you know i've got it all lined up i know which laws that i think they've broken at the time but i don't you know and bo diddle has said yes mike weinstein yes. But I hadn't heard anybody on the prosecution side or anybody on the side of law enforcement sit there and say, yeah, this is a crime.

Wow. So we go through the, you know, we spend about, we actually spend about four hours. And the first two hours they're talking, they're asking me questions. I'm showing them the evidence that I had. And by the way, I'm not nervous. I've stopped perspiring. So we're sitting there. Then they come through. They get up and they walk out. They said, we're going to be coming back in a minute. And they had slipped a piece of paper over to Michael Weinstein to look at it. And it was what's called a proffer letter. But it has

been listed as the defendant. And I'm going, I'm not signing that. I'm not a defendant. I'm not a target in this. Then I'm going, am I? And I start sweating again. I mean, they kind of sweep up everybody when they do. And you want to know something, Chris? That was part of my driving fear the whole time.

I didn't want to be on the wrong side of this. Yeah. Because if you're not on the right Yeah. It was going to go bad. You're just going to pick up everybody. Yeah. Just to fall back to something, do you want to tell us what your wife thought, or do you want to reserve that for people who read the book?

No, I'll tell you. She is a very... She's pretty amazing. She looks at me, and she's seen me be in pretty tough corporate situations before. She looks at me and she says,

I just want to know. Do you know what you're doing? I'm like, absolutely. Full-face lie. I had no faintest idea what I was doing. It's not like you've ever been a witness. Yeah. Yeah.

Then she goes, I'm not going to tell you. I'm not going to say no because I can tell you've already made up your mind. And I went, I have. And she goes, just be careful. Yeah. Yeah. Just be careful. You have to worry about your family and kids.

I mean, at least it's not the mob, but anybody can do anything if you threaten their. There is that kind of fear in the background, but you deal with that. Honestly, I came to the conclusion, and I hope this doesn't come home to bite me. I came to the conclusion that these aren't the kind of guys who show up at your door with a shotgun.

Yeah. So, I mean, two have gotten out of prison. Obviously, Alex Burns, the mastermind, killed himself. One gets out of prison in a few months, so I mean, and two have gotten out of prison. Obviously, Alex Burns, the mastermind, killed himself. One gets out of prison in a few months. And I just don't think that that's the case. That's going to be the case. Yeah.

These aren't bad people. They just got greedy and said, you know, the heck with the rules. And they did the thing that happens so often. I've seen so many times working in finance, they said, nobody will know. They really said that? Oh, God, yeah. I've heard that a thousand times in finance. Nobody will know if we'll cut this rule.

And reading the justice.gov's website on this, their announcements of the rest of the stuff, I guess they'd stolen so much money, the insurance company wasn't able to pay the policyholder claim. So there you start really having some real fraud and it starts hurting people's lives. It does hurt people's lives. Matter of fact, that's what the lead FBI agent told me the first time we met. You know, one of the things he said was,

you know, insurance fraud isn't a victimless crime. He said, you know, what happens is you've got people who have paid their monthly premiums for years and years and years. Now they've got to make a claim. The insurance company has no money. So who has to make up for that? The individual states, you know, individual states have to pay those insurance claims. Interestingly enough, this fraud, again, it turned out to be $350 million, but it was also in affected 39 states yeah so i want to leave something in the you know a lot of this in the book so we can just entice people to do it but what did you decide on

the proffer agreement because i know the proffer agreement you have to you have to you you have to tell any and all crimes you may have committed or any sort of activities you may have done that may have been bad i mean you have to you have to flesh out your whole life because they... You do. Yeah. You do. And, you know, I was very sure I had done nothing with respect to all of this. I mean, you know, I've been in the securities business, in the corporate finance business

for, you know, that's part of being in the workouts and turnaround business you know and you know i i have i have probably been close to things that were if not crippled and criminal than civil liabilities you know a dozen times but i've always managed to keep myself out of it and you know one of the things you know and i talk i talk to my kids about this and my two sons and i'll sit there and say you know here's the thing when you get in these situations the best thing i gotta tell you is stick to your principles but you gotta understand your principles are expensive yeah most people will just put their head down say i don't i see nothing you know to do the sergeant schultz thing you know i see nothing i hear say i don't i see nothing you know to do the sergeant schultz thing you know i see nothing i hear nothing i you know i say nothing and you know but when you do something

you got to understand that there's going to be a cost to you then and there was you know obviously for me i was out of work for three years after all this ended yeah sometimes doing the right thing is harder it's expensive but it looks like from the SEC filing, the co-owners were supporting him and they knew shit was going on and they were just all like, hey, make some money. As you said, no, no. Yeah. So I decided that my father worked on Wall Street.

My maternal grandfather worked on Wall Street. None of them had ever gotten in trouble. I didn't want to be the first and you know and it's i wanted my father who was still alive back then you know i wanted my father to be proud of me i want my kids to be proud of me i want my wife to sit there and say yeah you're not so bad you know you know so you wind up putting yourself in those kind of sticky situations there you go And now you got a book out of it. I do. Kind of all works out in the end. Hopefully a movie

because these usually make great movies of corporate espionage. From Eurolift to God's Ears and to Spielberg's phone. There you go. Let's get Michael Douglas in here. Very Wall Street-ish. Gordon Gekko, come on.

Gordon Gekko, yeah, there on. We're going to get go. Yeah, there you go. Uh, so yeah. And people love these movies, especially with FBI and wires and intrigue and, you know, all that stuff.

You go through this whole journey that probably not a lot of people get to do. And you tell the story in the book of, of what it's like to, you know, wear a wire and, you know, I mean, that's gotta be just a weird thing wearing wearing a wire. Even if you're not

meeting with John Gotti. It's pretty surreal. What does it feel like or what is the mindset? First of all, let me just say it's not a wire. It's not what you see in mob movies and things like that.

It could be a Thai class. It could be a number of different things you'll never know could it could be a belt buckle so you don't rip open someone's shirt and they got a whole mess of i mean okay so i'm sitting there i'm sitting there at that first meeting and you know after i agree to wear the wire then all of a sudden they're teaching me you know they take my phone they're plugging in all their direct dial numbers. Anything ever happens, we'll get somebody to you right away. And finally, they said, do you have any

questions? I feel like an idiot for this one, but I'm going to share it. And I look at them and I say, do they have to shave your chest to put a wire on? And everybody breaks up laughing, saying, it's not like the movies and i'm like really okay yeah all right i shouldn't i shouldn't have said that you know i should have thought

before i said that one i'm gonna go be a federal witness if i don't have to shave my stuff that's just where i drew the line on my integrity no that's kidding yeah so you you go through this whole series imagine you had to appear in court and testify against these people. No, never did. Because they all pled guilty. Oh, they all pled guilty. There you go. Well, that makes it easier.

And then finally, the lead bad guy offs himself. So it makes it a little bit easier to round about the book and close it up. Yeah, he had actually disappeared and checked out of the whole place. Did he run off? Yeah, he checked himself into the psychiatric ward at Bellevue Hospital at the beginning of February 2014, so just 10 years ago.

You say that was a bad thing. I've been there every week. Yeah, I had a cousin who was a nurse there. She told great stories was her name miss ratchet no i'm just kidding i had to do it one clue over the cuckoo's nest joke but you know so he did that then he went then he went into rehab in a very fancy rehab place in connecticut where his mother lived it only works for people who do drugs that are movie stars doesn't it it doesn't work 50 $350 million. I think it's probably...

He had access to all that money, and he squirreled a lot of it away. So then he moves down to Charleston, South Carolina, and he starts up all over again. Now, I talked to a lot of people writing the book.

I talked to some of the people that he made friends with down there, and I said so how did you meet Alex? And they said, I met him at a card game. Now, at this point, Alex would have been 28, 27. And, you know, it's a bunch of guys in their 40s, 50s sitting there playing cards. And, you know, that's interesting, Alex. What do you do for a living? And Burns sat there and said, I'm

a retired hedge fund manager from New York. Retired? Didn't say anything. And he started all over again. He started swindling people. Wow. Snake doesn't change his colors. There you go.

What do you hope people take away from your book? A couple of things. One, I hope they decide to buy it. That's my primary. But, you know, no, actually, you know, just what I tell my kids, you know, when you're confronted with something that's really bad and, you know, stealing $350 million, i believe qualifies as really bad when you're confronted with something that's really bad and you are forced to make a decision you're not you're you're never going to regret doing the right thing

oh you know and it's kind of that you know in the cartoons from the 60s and the 70s where they had the angel on one shoulder and the devil on the old shoulder, you know, going steal it, you know, and the angel going, don't you dare, don't touch it. Side with the angel, you're going to feel better in the long run. There you go. I know that there's some people who've done whistleblower stuff on the government and they've lost everything. They've taken, they've, you know, sometimes it's been on the wrong side. I think everything they've taken they they've you know sometimes it's been on the wrong side i think of a couple major whistleblowers and but you're able to live with yourself but you know the other the other thing is if you if you'd listen the devil on your shoulder and said no the money's good it's a good job you know you might lose income for three years you

know there's you know just just just just but turn a blind eye you would have probably been rolled up in the thing once the fba showed up and raided the place yeah i mean i probably would have the worst to do anyway yeah i was i was i was managing you know one of the one of the accounts through which a lot of the money came in and went out for unintended purposes. Yeah, so it was quite the journey. Would I do it again? I'm not sure. Let me go back on my own advice.

I would help, but I'm not sure I would go through and do the covert stuff. The whistleblower thing, maybe it's just me i had you know i i have a little bit of an issue with this whole whistleblower thing because you know there's a small community of people who are trying to make money off of the people who take the risk and put their you know their lives and their livelihoods in jeopardy and in many cases not mine but many cases their lives in jeopardy and you know they'll sit there their you know their lives and their livelihoods in jeopardy and in many cases not mine but many cases their lives in jeopardy and you know they'll sit there and you know praise you you know day in and day out you know to the highest you know order and they will but they're really only just trying to get a piece of the reward huh is that the attorney's world or is

there a whistleblower yeah there's a whistleblower reward system the fbi has has won the attorney's world or is there a whistleblower reward system or something? Yeah, there's a whistleblower reward system. The FBI has one. Oh, that's right, yeah. Yeah, the SEC has a big one. And everybody reads about people getting these $150 million rewards. That's really, really rare. And it has to be money that they've taken back, that they've recovered. They'll give you a

percentage of that. It doesn't sound like the area would recover much of this. They didn't recover shit in the South Borderline thing. Paper float? They had a lot of losses. These guys were taking the money and doing the private jet thing, which

why is it all these guys when they sit there and you know rip off you know do a big rip off they all start flying private jets out of nowhere you know it's amazing you got to keep the look at the appearances that's part of the i guess part of the it's part of the grift you know yeah what was that movie the great movie in the 90s or whatever the grifters you ever see that movie oh god yeah there's we actually went back to in the 70s or whatever, The Grifters? You ever see that movie? Oh, God, yeah. Actually, it went back to the 70s with Angelica Huston and I forget who else. But, you know, yeah, that was a great movie. And, yeah, you're right.

There was an original one before that, huh? But the scene where he brings the guy into the Texas stock firm and they're putting on the show with the great-looking firm. And, you know, he goes to the door. I'll never forget. He goes to the door and he opens it. And he's like, come show with the great looking firm. And, you know, he goes to the door. I'll never forget. He goes to the door and he opens it. He's like, come here. See these stock computers. And, you know, it's in, you know, behind the door is just an empty office.

And it's just the, you know, the putting on of errors and all the stuff that goes into it. You know, Southport Lane was a really interesting place. They actually gave it some thought ahead of time. Maybe they're actually going to try to be a real firm. First time I walked in, again, as I said, my father worked on Wall Street. My grandfather worked on Wall Street. I've been in a lot of Wall Street firms growing up.

And so they all kind of have a certain similar air to them, decorative style. And there tends to be the real quiet part. Then there's the trading floor, which is noisy. Southport Lane had a gorgeous office. On the wall were framed old stock certificates, and it was made to look like old money. And they had a trading floor down the middle of them,

and they had a whole floor, 350 Madison Avenue in New York, which is prime real estate in Midtown. So, I mean, they made it look as if they were old money. Yeah. It's always keeping appearances because, I mean, the way, you know, you fake, you got money, you know. We live in this real world, a really weird world, especially with Instagram, I think helped create some of it.

But, you know, you can go do this thing for, like, I think it's like $100 or $150 in L.A., and you can go down and have your picture taken in a in a staged private jet and you know i've wondered about that yeah i've wondered about that when you see all that you know you said that he can't be making that yeah he can't he can't be making that at all and yeah that's that's really wild let's give people a dot com where can people find you on the interwebs to get to know you better at www r d b a i l e y dot com there you go and thank you richard for coming on the show this has been really fun and interesting i'm intrigued i love to see in the movie you know there's a you read the reviews there's a lot of

people who say that but but let's hope. Let's hope. There you go. Thanks to my audience for tuning in. Order up wherever fine books are sold. Pirate Cove, an insider's account of the infamous Southport Lane scandal. Available wherever fine books are sold. Go to Goodreads.com, 4chesschrisfoss, LinkedIn.com, 4chesschrisfoss,

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