The Jordan Harbinger Show - 226: Justin Paperny | Lessons From Prison

Episode Date: July 18, 2019

Justin Paperny (@justinpaperny) was a successful stockbroker who made some bad decisions and wound up serving 18 months in prison for violating securities laws. Now he helps others prepare for time behind bars and after. He's the author of Lessons From Prison. What We Discuss with Justin Paperny: What happens when white-collar criminals go to jail. Why otherwise good people might find themselves on the wrong end of the justice system. How someone prepares to do time inside a federal prison -- and what they can expect once they leave. How easy it can be for people to rationalize criminal behavior and lose control of their moral compass. Why Justin counts his 18 months behind bars as one of the best experiences of his life. And much more... Full show notes and resources can be found here: https://jordanharbinger.com/226 Sign up for Six-Minute Networking -- our free networking and relationship development mini course -- at jordanharbinger.com/course! Mind Pump is an online radio show/podcast dedicated to providing truthful fitness and health information. It is sometimes raw, sometimes shocking, and is always entertaining and helpful. Jack up your ears with some Mind Pump wisdom here! Like this show? Please leave us a review here -- even one sentence helps! Consider including your Twitter handle so we can thank you personally!See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Welcome to the show. I'm Jordan Harbinger. As always, I'm here with producer Jason DePhilippo. What happens when white-collar criminals go to jail? What's going to happen to these famous faces wrapped up in a college admission scandal? Today, we'll hear from my friend Justin Piperney. He's a white-collar criminal defense consultant who specializes in preparing white-collar criminals for their prison sentences. And his advice is based on his own experience in prison, which we'll hear about today. Not only will we learn about what it's like inside and how to prepare oneself to do time, we'll also learn about the reasons otherwise good people might find themselves on the wrong end of the justice system. What was frightening to me was just how easy it can be for people to rationalize behavior and lose control of their moral compass. Justin gives us some keen insight into his own process and that of his clients.

Last but not least, we'll hear about why prison was actually one of the best experiences of Justin's entire life. If you want to know how we managed to get stories like this, well, we've got a huge network and people send them to us. So check out our six-minute networking course, which is free over at Jordan Harbinger.com slash course. And by the way, most of the guests on the show actually subscribe to the course on the newsletter. So come join us and you'll be in great company. All right, here's Justin Piperney. So to clarify for people that are wondering what the hell we're even talking about in the first place. Yeah.

So you were a stockbroker at Bear Stearns, UBS, and then at age 32, and we'll get into some of the details on this. as well, ended up pleading guilty to conspiracy to commit wire fraud, mail fraud, and securities fraud. Mail fraud sounds like a clowny thing that doesn't mean, it sounds like something to do with letters, but it's more complicated, right? I wish it was something clowny that didn't lead to federal prison. So mail fraud essentially in my case was I had a client, my client, while I was a stockbroker who was creating fake documents and sending them in the mail. So by placing it in the mail, putting a postal stamp on there, having it be a deceptive, deceptive document. Yeah.

That was, that was mail front. It's one of those crimes that seems like they go, all right, this is bad, but we can't, it's so complicated to prove a lot of these other things that we're going to throw that in there. It's like tax evasion where they get Al Capone on that because they're like, oh, it's going to be a mess to unravel everything. But we do know you have some money and you didn't pay taxes on it. So let's go for that. That's oftentimes a lot of my clients in white collar cases where it's unclear what they may plead

guilty to. They plead guilty to conspiracy to commit securities fraud, mail fraud, wire fraud, conspiracy to do something. You'll find so many cases that's easier to tie them into a conspiracy than figuring out specifically what statute or violation they may have made. Yeah, I can understand why it's tempting, especially for a prosecutor to go invest $2 million figuring out the details or we're done right now and we just say you plead guilty to various conspiracies. That's right. That's right. At age 32 though, is when this happened. And for me, at age 39, I think back to when I was 32 and I go, okay, I might have been a late bloomer, but I was still basically a kid. And so now you're in your 40s, you're in your 40s, right?

44. Yeah. So when you look back at age 32, do you think that was a dumb kid era or were you, not in that you're not responsible for it, but do you look back and go, what the hell was I thinking? And also, because 32 seems very young to go to grown up jail. So I was really, I was 28 when I was breaking the law. And you'll find in my case there were like two Justin Piperneys. There was the one who graduated USC. I had very successful as a young stockbroker, raised a lot of money, did well by my clients.

Professional could close deals against five or eight other brokers and win the business. So I had that professional edge to me. Then when I caught my case to use some prison vernacular. Yeah, I was going to say, wow. When I caught the case, I suddenly became like this little boy. I had been punched in the gut or the face, and I didn't know how. to respond or compute to this adversity. So part of the problem was I had never had any adversity or setbacks in my life. I have said I was this privileged, you know, coddled kid who grew up in

the valley with all the breaks and doted after for my parents and my coaches and as a baseball player, things came easily. No setbacks in my life. So suddenly when this setback came, unlike others who might have endured some real adversity in their life and learned to overcome them. My character trait at the time was to deflect, to dodge, to lie, to prevent this wasn't, you know, pretend this wasn't happening. So that's where I was at 32. Despite the success I had had, I suddenly felt like a little boy at times wanting to cry and to, you know, run into a little corner, unsure how to respond to this. And as a result of not knowing how to respond, I made matters measurably worse. I lied to my lawyers. I lied to the FBI. I delayed the

healing that should have begun much sooner. So I don't know if there's any time to go to prison, whether it's 28, 32, or 92, but the reality was as a result of my upbringing and success that I had had, I was unprepared to respond to these setbacks. And it's not unlike many of the clients with whom we work, who have had nothing but success. Yeah, I was going to say it does sort of remind me a little bit of some of the privileged and wealthy clients that you're working with now. Are we allowed to talk about what some of those people are involved in right now? I know you can't mention names, obviously. We can and absolutely should talk about it.

I won't mention we have many clients in the Varsity Blues case who are clients, evidence I have shown, but. A.K.A. the college admissions scandal for people who don't know the code names. Thank you. I'm so into it. I should be able to be. Yes. Yeah, we can certainly talk about as I have a number, a number of thoughts on. Yeah. Okay. So what you had done was essentially creating those documents with your boss. And it must be tough to think about some of this. Because in one case, it was a 90-year-old rabbi that lost more than $3 million. That's going to sound horrific. It sounds so bad. It sounds really bad. And someday my children

are going to watch this and think, good Lord, why does dad talk about this? Let me clarify the situation. Yeah, sure. So essentially what I did, or as Judge Wilson said in my sentencing here and here in Los Angeles, he said, I'm tired of stockbrokers turning the other way for commissions or salesman turning the other way for commissions. You turn the other way for money. You got caught. Most don't get caught. I'm sending you to jail. So here's essentially what happened. I learned that my client, who is a hedge fund manager, so at UBS or Bear Stearns, I'm executing the trades as the broker. Client calls and says, buy 100,000 shares of Google, sell 200,000 shares of Microsoft. I'm executing the trades for a commission. He housed his money with us. Our client would go out and raise money.

Maybe you're a client to Viz. You give them a million dollars. Someone gives them a million dollars. You him money, he houses it with us. At UBS, we learned that he was losing money, yet he was telling people he was making money. So I attended a meeting with a 90-year-old rabbi. When I stepped into that meeting with the rabbi and my client Keith, and I'm not excusing or justifying my actions here, when I stepped into that meeting with the rabbi and my client, Keith, the rabbi's money had been lost for many, many years before I had ever met the rabbi. Over a period of many years, my client, Keith, was sending this rabbi statements purporting to show that he had $2, $3, $4, $5 million under. And those were fake.

All of those were fake. I didn't know that at the time. I had just become a client. Sure. Keith had just become a client. The headtron manager. Well, you also didn't say anything. That was the point.

So we're at this meeting and Keith begins to tell the rabbi how well his portfolio is doing. And I'm sitting there and I say, well, wait a say, well, wait a say, I know he's lying to this person. This rabbi's money has been lost for years. Well, before I ever met him, what do I do? Do I say, get out of here and run? Your money's lost. So instead, I stayed quiet. Right.

Then I... The answer was, yes, that's what you do. But that's not what you do in your 28 years old. That's what I didn't do. I sat there. Then I contributed to the facade that his money wasn't good standing. And the rationalization of my mind was that this rabbi, whom I just met learns that his money's been gone for years.

Well, before I met him, it could kill him. That's how I rationalized allowing the meeting to continue and facilitating it. But the real reality wasn't part of the reason I broke the law and went to prison, I wanted the grave train of commissions to continue. So I reasoned it in my mind that way, and that's also part of the reason I was held accountable. I went to prison. It seems shocking to me that a bank like UBS or any bank would not, are there just not enough controls on this, or at the time maybe there weren't enough controls in this?

You probably can't really speak to it now, and we probably shouldn't because it's a little irresponsible for us to sort of guess what they have in place. But it seems like your boss was clearly doing something wrong. how was there not like, I guess you just can't audit everything going on at a big institution. So what happens, so values are arbitrary. What's valuable for me may be different for you. So a compliance manager to UBS or any investment bank, the compliance managers should have different values than a broker looking to raise money. Yeah. The values for a compliance manager should be to police the brokers to rein them in. The value for the brokers is production and growing their assets. You'll find that some of these compliance managers can be corrupted and they can be persuaded to turn the other way.

when they see some conduct that isn't becoming of a broker. So you'll find compliance on a lot of these firms is solid, but you have human beings working there, and they can easily be, as I said, exploited and corrupted. And because of that, they may turn the other way from conduct. They know what's wrong. Yeah. Oh, man.

So you got out of prison. You're 34. At that point, you're convicted felon. And the economy in 2009 when you got out of prison was in shambles, right? Yes. I used to write letters from prison telling people that I've chosen to sit out this recession. Yeah. Yeah, it's good call, I think.

I'm taking 18 months off to go. I'm going to take a little break here. I'm going to get it together. Use this as a little sabbatical to prepare for what's coming next. Thank you. I look forward to seeing you in our next visit. Yeah, yeah. But how did you then get into the business of becoming a white collar?

Well, tell me what your business really is. Are you a prison consultant? Is that kind of a fair label? So we're prison consultants and business advisors. So before I went to prison, I did everything. Horrifically. Lawyers exploited me. I wrote a check. I didn't work openly with them. I lied to the FBI. I ate poorly. I drank. I was up all night. I was up all night. I was up I never wanted to have sex. I would play a stay up all night playing online chess. I was depressed. I was miserable. Like my character at the time was to not know how to respond about choices that I created. So I was a damn wreck for three and a half years before I went to jail. Yikes. So finally then I get to jail or prison and I begin like meeting guys. And they're like, like, I was miserable and depressed and my wife hates me and my kids don't want to visit and I lost

on my money and I lost my career and I'm like, hey, I'm just like you, but we're in prison. Let's go for a walk around the track and talk. So I begin to interview so many of these men who have the same experience as me. They regretted how they prepared for prison and they got longer prison terms as a result. And we live without dignity in the process. So I sense an opportunity. So let's ensure that no one else has to go through this. I know there's very little forgiveness that comes for the white collar defender. There's a sense of otherness that comes our way. it's not like cancer. If someone doesn't choose cancer, of course there's going to be empathy for them. There isn't a great deal of empathy at times for a white collar defendant because we chose to break the law.

Even within my own family at times, there wasn't the sympathy that you would hope. It's like, I made a mistake. So in prison, learning from others, I wanted to document how others going through the system could prepare better. So I began writing a daily blog every single day documenting my experience through federal prison, sharing lessons I learned. And the blog was a harbinger for my first book, lessons. from prison, which chronicles not just my journey, but what I learned traversing the criminal justice system, how good people who made out of character choices can emerge successfully. But I also cover, and this is something we cover extensively in our work, the hardest part isn't prison.

It's frankly the easiest part. Yeah. Going to prison is the easiest part? It's the best part. It's the easiest part. It's coming home, starting over. Yeah. Well, I want to get into that in a second.

I think it is an interesting point you just made about how there's not a whole lot of sympathy for the white collar defendant. Because if you look at somebody who robbed a liquor store, provided they didn't kill someone innocent, you go, wow, this person must have had desperate times. You don't justify it and you think this person belongs in jail. They're violent criminal. But you also go, man, what drove them to do that? But with a white collar defendant, you kind of assume you know what drove them to do it,

which is you're a greedy dick. You know, that's like the sort of blanket. You don't go, oh, man, what prompted this lawyer who worked on Wall Street to embezzle money from his clients out of a trust fund? And you go, he wanted a freaking boat. That's why. And the irony is it really starts subtly. So no white-collared prisoner wakes up. Very few, I should say, wakes up and says, you know, today feels like the day. I'm going to ruin my reputation, create victims, destroy my career, embarrass my family, lose my licenses. Today feels like the day I'm going to flush my life down the toilet.

Not tomorrow. Today is that day. Yeah. Feeling motivated. I'm feeling motivated to ruin everything I've worked decades for. It doesn't work that way. It's a period of bad decisions over a period of time. time, rationalizing that conduct, perhaps working in an aggressive corporate culture that encourages some short-taking. You know, sometimes in group think and others are doing it, you tend to make the worst decisions. And over a period of time, you become corrupted. You get away from values that once guided you. And boom, you're embezzling money from a client's trust fund. I can see that it's the boiling frog analogy, which is a false analogy because it's not really what frogs do. They jump right out. But in theory, it's a good analogy for you're there. And of course, even if you

you know, even if I were in your shoes back then, I know that if I go, hey, so I know that we're doing this and you're sort of making these different documents like, what happens if we get caught? They don't go, oh, we're screwed if we get caught, we're going to prison. They go, well, you hire a lawyer, you plead it out, you have to pay some restitution. Yeah, you'll have to find a different job. But it'll be fine. Nobody goes, we're totally screwed. Well, so this is what happened at the time.

what happens in other cases, we say, if we don't do this, this is going to come undone. I need more time to make the money back. So we use this doctored evidence as a means to our end. We need more time from the market to turn, and therefore we're going to make all of the money back that we lost and our investors are going to love us again. So we just rationalize and find creative ways to allow the fraud to continue. It helps us sleep at night. And we tend to focus on the good things we do rather than breaking the law. If you're sociopathic, you may not care at all. But If you have a conscience, you're going to want to focus on the good things. If not, you won't be able to function.

Yeah, it seems like the majority of these white-collar criminals that you read about or that maybe the ones that you represent, they're not these sort of sociopathic people that are going out, making a bunch of money and robbing people and not giving a crap, they're rationalizing the behavior the whole time. The majority of my clients didn't wake up in the tensions to defraud or break the law. I travel the country, lecturing on ethics and white-collar crime to the best corporations and universities in America, and I share how none of my clients had those intentions.

I also remind them that none of my clients ever imagined they'd be immersed in the criminal justice system. So for that reason, some of these business students at time, I can tell they're totally tuned out. Eight seconds in, I have not even had a chance to put them to sleep with my lecture. Right. I'm never going to do this. It ain't ever going to happen to you.

So I remind them, I say, you can tune out, go on Twitter, Facebook, Instagram, do whatever you want to do. I was once you and never could have fathom that I would end up on the wrong side of prison boundaries. I could have imagined getting the rarest disease of leprosy before I would ever go to federal prison. Tune out if you like, here's my story. And I've received thousands of comments over the years from students who were like, dude, we heard that you were coming.

You're a guy out of jail talking about ethics. Isn't that ironic? I was going to tune out until you said to me, wow, this could never, this never would have been me and I too would have turned out. That resonates with the audience and they get engaged. And it's not a scared straight. I don't believe in scared straight. Of course. It's conveying how easily we can rationalize,

choices and not just end up in prison, but lead to divorce and depression and suicide if we do not live a values-based life. Yeah. Well, you hear that anybody who does something really dastardly, almost anybody, like you mentioned, infidelity, you see people going, oh, well, you know, I just figured that it was, and you hear the rationalization, you very rarely find somebody who goes, yeah, I just don't respect my wife, she's never going to do anything about it anyway. I've heard people do that, and I go, wow, you're a dangerous person. I agree. Because you don't care at all anybody. But most people, they do love their significant other, but they've just figured out a way to do some crazy gymnastics whereby what they're doing is not wrong. It's kind of hedonistic as well. They're

just focused on their own pleasures without considering how it could be impacting those that are in their lives. So you wrote the first book from prison with a pen and a paper. That must be such a huge pain to write a book with a pen and paper. Especially when you have a little bit of obsessiveness, which I have, and you hinge and crossing out words. You obsess over every word. There was no, there's no internet. The computers were not accessible because the warden wouldn't let us use the Yeah, of course. They wouldn't let us use the typewriter, so they were just sitting openly in the prison. They wouldn't use the typewriter.

They're just sitting openly there. I thought you were going to say the internet. I was like, why you're not use the internet? Yeah, you can use the internet illegally. I get some of those calls, too. No internet in prison. Yeah, just I had some help, a colleague of mine named Michael Santos, who'd been in prison for a long time, and we created this plan where I would document this experience

and just send it home. There is a value in being in prison and losing everything. There is a freedom that comes with it. I didn't have a career to return to. I didn't have money to return to. I didn't have a relationship to return to. All I wanted to regain was my dignity and I had a brain. So what I came to love in prison was the climb. I think if you look at anyone that's successful, anyone that's overcome anything, they find value in the climb of working their way back up. So for me, everything I did mattered, every word mattered. And the criticism that came my way, the inevitable criticism I continue to get to this day, it meant nothing and it still means nothing today. Because I know going down my own. road and known path, some people will find value in it. That was the beauty of having no internet in prison. That was the beauty of writing something and sending it home, knowing that once it's in the lockbox of mail, I can't get it back. That was the beauty of thinking, I don't have a boss to offend. I can say and do whatever I like, within reason, respectfully. So for me, it was

very, it was cathartic and therapeutic, and it was the best part of my experience through prison. Just because my body was there, it didn't mean my mind couldn't work and it did 24 hours a day. Yeah, I think I was thinking, you got me thinking about what I would do if I ended up going to prison for 18 months or whatever, or a year or something. And I thought, you know, I have a huge reading list and I would finally catch up. My inbox would be a disaster when I get out. But everything else, there's just something about the ability to reset while you're in there. You did mention that in one of your videos as well, the worst time for you was not the time in prison. It was the time that preceded surrendering to prison because you knew it's, it's a lot.

got to be like having an exam that you already know you're going to fail and there's no hope of getting any of passing. Right. So you're just waiting for the, you're waiting for impact, delaying it kind of thinking about it and ruminating over it and all that. So as a number of clients in this college cheating scandal case have said to me, Justin, I'm begging for clarity. I'm living in the land of the unknown. Can I work again? Should I work again? Should I, should I leave my home? How long am I going to go to prison for? What's it like? I, I have no idea. So the waiting and wondering, and we tend to be our best producers in our own mind,

creating what we think it's going to be like. Much of the time it doesn't turn out to be that way. So they're obsessed 24 hours a day with what this experience will be like for them if and when they go to prison. So then when you get sentenced, it's almost better than the guilty plea. At least you have clarity. You have a beginning at an end. Yeah.

So, and it's very hard to continue. It's hard to build something. It's hard to live your life. It's hard to build a new business. Start a new relationship. Think about having children travel. when you have a potential prison term looming over your head. It's incredibly difficult to even function some days.

Some clients, when they reach out to me or prospects, reach out there. I haven't gotten out of bed in weeks. I haven't shaved in weeks. I look terrible. I'm disheveled. I can hardly function. I've lost my job. And success for them that day might not be building a new business.

It may be getting out of bed and going for a walk. This experience can be crippling. And I can't tell you that everyone has sympathy for them because they say, hey, shouldn't have broken the law. Yeah, of course. I should have thought more about it. Yeah, exactly. You're listening to the Jordan Harbinger show with our guest, Justin Piperney. We'll be right back.

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Subscribing to the show is absolutely free. It just means that you'll get all the latest episodes in your podcast player as they're released, so you don't miss a single thing from the show. And now back to our show with Justin Piperney. I know you don't provide legal advice, but you've also said that a lot of the lawyers that people have, they're giving maybe not bad advice, but at least misguided advice to a lot of the clients.

And some of the college admissions folks are getting pretty crappy advice from the sound of it as well. Let me clarify that. Yeah. Lawyers may give excellent advice. The defendant may choose to not take the advice. Okay. There are some clients who have paid me a lot of money who may not take the advice. And that's part of the reason in our case.

We have payment plans over a period of many months. And we reassess after 30 days. Are we on track? Are we hitting our milestones? Don't pay me at once. I haven't done all of the work at once. That would be insane. So there are some defendants kind of like me a little bit who are in such denial and so ashamed

that we didn't take any advice that we had paid good money for. Some of that is going on in the college scandal case. Lawyers are given good advice. The defendant is not taking it. Over the years, of course, there are some lawyers who will tell a client, we can win at trial. You are going to prevail. I assure you we're going to win here. You got a great case.

We're going to win. It's so irresponsible. Then they spend, well, then they spend a million dollars going through mock trials and discovery. And on the eve of trial, the defendant pleads guilty when they could have pled guilty a year earlier and saved a million dollars, and the government would not have invested as many resources, and they could have already been in prison and not want their prison term. So some defendants should go to trial. Some defendants who lose a trial should have prevailed. Can't blame the lawyer for that. Let me be very clear. But in some cases, lawyers, along with any executives, may give

advice that may not be in the best interest. And that's why due diligence and vetting, speaking to clients, asking the right questions, asking a lawyer, if you've gone to trial, have you ever actually prevailed? Let me speak to two clients. Let me see how well you write. Defendants do not know how to hold a lawyer accountable. They're not criminals in the sense that they're criminogenic. They've broken to law for 30 or 40 years. It's their first time. So I'm working on a book with a colleague, Sean Hopwood. He's a professor of law, Georgetown. Great story. He served 10, 11 years for robbing banks. Yeah. And now he's a professor of law of Georgetown. We're working on a book together that's going to help defendants hold lawyers accountable, how to hold a lawyer accountable,

how to make progress, and to just make better experiences through the system. That's funny. People have said, hey, have you heard of this guy before? and that's funny. You work with him. Now I know why the name sounds familiar has been in my inbox. I know you say that some lawyers, it's not their fault. But as an attorney myself, I look at this and I go, yeah, but you are, we're not supposed to tell somebody something that we're not really sure about.

And you're certainly not supposed to say, hi, this person has a lot of money. I bet you we can go through a bunch of stuff and I can make a lot of money from them. And then I can just suddenly turn around and plead guilty, no harm, no foul, because there is harm. Because like you said, the government then invests another 15 months or five months or whatever of resources in the case. And they go, well, we can't just let you go now. We spent 300 grand investigators. I've attended a number of sentencings where even after the defendant pleads guilty, the government still asks for the maximum sentence because they tell the judge, look, we spent three years and a lot of resources investigating this case. I don't believe in sizing defendants up. We've had clients who have been worth a billion dollars. We've had clients who have been worth, you know, nothing, who have had to borrow money to retain us and everything in between. But I don't charge them based on what they have. We have a clearly defined scope of work. We know what we're going to produce. And occasionally some lawyers based on a defendant's net worth can, you

know, size them up and say, well, there's a chance to get a $500,000 retainer. I don't think you're supposed to do that. Not all, I work with some terrific lawyers. The point is, in any business, there's going to be some shady characters, regardless. Yeah, it's just, it's a bummer that it happens. I mean, being a lawyer, in my opinion, we take oaths that are for a reason. It's like a doctor. A doctor shouldn't say, huh, well, you have cancer. I can probably get rid of it using this, but I want to go through all this other more expensive stuff and it's going to take longer because, man, I'm going to make a hell of a lot of money doing it. But at the end of the day, you're going to be cured, so what's the big deal? What troubles me most sometimes with lawyers is, even some who are former U.S.

attorneys, there appears to be like the symbiotic relationship between the defense attorney and the prosecutor, almost as if they're more on the same page. Too many defense, attorneys, from my experience, especially in a client as innocent, are unwilling to get to every detail, every fact that may make the defendant's case more presentable. So sometimes it shouldn't be just a formality that you're going to plead guilty. Or the second an indictment comes, say, well, the odds of prevailing a trial are very low. These are the guidelines you're going to get them, and I need a half a million dollars. My response to a client is, okay, if it's such a formality, you're going to get this sentence and you should plead guilty. Go get a federal public

defender, many of whom are pretty damn good, save a half a million bucks and save those resources for your wife and family and let's go out and build a new business. If you're going to pay that type of money, it's not under the guarantee you're going to get a better outcome, but it is under the guarantee they're going to catch every detail and fight, fight, fight, rather than just defaulting to the government's version of events. Yeah, that's interesting. Now, let's go back a bit. In your opinion, what causes people to commit crimes like this? You have the fraud triangle. I thought this was pretty interesting. It's like the slippery slope that lands people in prison. So I feel like an A accounting professor when I talk about the fraud triangle.

Let me, okay, I'm an accounting professor for 15 seconds. So it's impossible to go to prison unless you see some opportunity. So in prison, I'm writing, I'm thinking, I'm reading, and I come across this kind of cliched fraud triangle. And it starts off with pressure. We all face pressures in life. Sure. All of us.

The difference is not everyone who faces pressures breaks the law. In my case, as a stockbroker, I felt pressure to produce, pressure to prove worthy of my significant income, pressure to be liked, pressure to be appreciated by my senior business partner, pressure to stand out, pressure to prove worthy of this USC pedigree baseball player who's now 26 at Bear Stearns. That came with a lot of pressure. We all face it. Sometimes it's pressure just to pay the bills. Okay. And then the rationalization. I saw others in my industry breaking the law doing things that they weren't supposed to do, but they were getting promoted. Their career was advancing. So I rationalized there's a way to increase your business. And sometimes

that includes taking some shortcuts. Consequences be damned because UBS didn't care. And then the opportunity, you can't ever break the law unless you sees an opportunity, regardless of the rationalizations or pressures. So the opportunity, of course, for me, was working with this deceptive hedge fund manager who was lying to his investors, who in turn was paying me $100,000 a month. So every client, if it's a street criminal, if it's a blue collar, white collar, anyone who's ever served time in federal prison or state prison has succumbed to this triangle and you can't close the gap without an opportunity. And oftentimes they'll create the opportunity or sometimes it's presented to them. Like the college cheating scandal case, these actors and successful business people, they

weren't thinking, yeah, like I said earlier, today's the day I'm going to break the law and ruin my life. Rick Singer presented an opportunity to them to help get their students and their kids into a school they might not have gotten into without help. They seize the opportunity. They close the triangle and boom, they're indicted. Yeah. When you phrase it like that, you can see how somebody who wants to do the best for their kid and is not really thinking about the consequences would get roped into it. But on the other side of the coin, you and I were talking about this before, there are plenty of people in the admission scandal who are going, you know what, I got to fess up to this. This is a huge mistake. I can't believe I did this. This is so embarrassing. But there are other people

that are not doing that, and they're going, I'm going to fight this because I maybe think I'll get away with it or I'm delaying the inevitable. I frequently hear from white collar defense. I didn't have bad intent. I didn't have criminal intent. And they'll say, well, wasn't Hillary Clinton not ultimately indicted because she didn't have criminal intentions? They draw these analysis that don't make any sense. They take one or two words from a Comey statement of why Hillary Clinton is not getting indicted and they draw that into their case and say, see, see, it's exactly the same thing. No, it's not exactly the same thing. I have to help them understand why having intent means nothing in the eyes of the government. The government has a belief that you broke the law

and whether you chose to do it or not, it happened. Victims were created. You took shortcuts. So I have to help them understand that. I would argue in this varsity case, some were saying, I didn't have intent. I was entrapped into this. I was set up. I didn't say anything.

I was kind of agreeing with someone. It is true they were dealing with a career salesman and a manipulator. And that is my opinion of Singer. And I've said it. Singer, the guy who said up the admission scandal. He was a many white collar defendants when they cooperate or nervous. They're scared. They're up all night sick. They can't sleep. They're thinking, oh, my God, I've gone from being a doctor, and tomorrow I'm going to be wearing a wire.

No, I'm going to be wearing a wire and cooperating against someone. I'm going to do a meeting at a coffee shop, and I'm going to be wearing a wire, and the FBI is going to be listening. This is like right out of a movie. I can't do. This is scared. They're up all night sick throwing up. Can hardly function. That is what is like for most defendants who cooperate. They've never done it before. You listen to the tapes with Singer. You listen to him, Colin Laurie, and others, pretty smooth. Lori Lachlan, the actress. Yeah. He'd been doing it for a long time. He was pretty smooth when he was on that cooperation tape.

And that's when you get a sense. He knew what he was doing and he had been doing it for a long time. There's a difference between lying once or twice in a career like Felicity did or Lori perhaps might have done and line as a way of life, which I think was the case with Singer. Yeah. That's how we built his business. Yeah. We got to own that.

Yeah. Yeah. That's interesting. And people in prison for white color stuff, it's securities fraud, Ponzi schemes, tax evasion, fraud, drug offense. But all these people are like engineers. professors and accountants a lot of the time. They're educated executives who never imagined they'd be caught up in this experience.

Some of them are professors who might have gotten grants by claiming to do research. They've never done PhDs. I've had clients go to Yale, Harvard, Stanford, Wharton. Funny story about Wharton, I had a speaking invitation there. Then the invitation was rescinded because they didn't want to give the stage to a felon, which was ironic because at the time, Wharton had like several of their alum in federal prison. So the message would have made a whole lot of sense at the time, but it's okay. I went from Wharton to NYU, and it was a wonderful event.

So, yes, there are people who never imagined they'd end up in this experience, and many of them struggled to respond to it. I can imagine them going, look, we don't want a felon on our stage like some of the people that have graduated from this business school. Some professor found it so off-putting, one, that I'd be speaking, two, he saw the fee that I was going to earn, and he said, this must be a joke. And I said, well, the fee that I earned should be commensurate. with the value that I provide. So even though someone else may be an editor from Forbes or Bloomberg is

speaking, look at ratings we've received from other lectures we've given. If I've rated higher, I should get paid more based on performance. The difference is they're like, well, this guy just got out of jail. He should be happy to do anything. He has nothing else going on. Why are we even paying him at all? This is crazy. He's a convicted felon. So I've used that story as over the years where it's not necessarily the value that I provide. Sometimes they just continue to box me, and he's a convicted felon. Why should we pay him more from someone who never went to prison? Pay should be based on performance rather than, you know, expectations.

I think the question then is, what's it worth to you to keep one of your Wharton students out of prison in the future with my lecture versus, because I think it tarnished, every time your alumnus goes to prison, one of your alumni goes to prison, the reputation of their institution is going to get tarnished to some degree. Is that worth the, is the, is the, is the, fee higher or lower? Is it worth 10 grand? Yeah. Plus, you know, plus you're going to get a, plus you're going to get the books, which will benefit the students. So I agree that now in this college cheating case, it's not just the schools that are tarnished or potential alum that they go, now it's the

coaches, now it's the professor's going to prison. So there's going to be long-lasting that damage here. Yeah. Oh, man, it's, it is such a mess. And that's why this case is so interesting because I looked at the YouTube comments on some of your videos and there are the rage involved in this is extreme. But it's also understandable because there is an element of looking at someone who paid for their kid to get into a school they wouldn't have normally gotten into. And then the kids out there making videos like, I don't even care about school. I just want to party. And you just think, you know what? You're so unlikable that I'm almost, I understand why everyone's Maddie. Certainly, there aren't a whole lot of times where MSNBC may be

totally aligned with Fox. And in this case, the left and right is so aligned that these parents should be punished. I agree and believe that this is, in many cases, it wasn't so much about the children, but the parents, the ability to say, my son or daughter went to the school. I know I went to USC, I played baseball there. I was not a major contributor on the team. The athletes were terrific. I was not. But the fact that I was there and I traveled and I played a little bit, my father took such pride and satisfaction being able to say my son was a USC baseball player, regardless of how much I played. Well, a lot of it is the same thing with these parents, to be able to say my children goes to Yale or Harvard or USC. I'm a

graduate of USC. I'm surprised USC would get such attention, because it's not Harvard or Yale of all. It's gotten harder to get in there since I went there in 93, but USC is not Harvard. Let's be clear. But a lot of it was more for the parents and the bragging rights. You hear the tapes. You hear the tapes on gangster capitalism, which is how we, the podcast, where I was introduced to you. And there's a guy on one of the Rick Singer's phone call saying, why didn't you get my, he had just gotten done cheating on the SAT for one of the kids. And then the score was like 1440 or something amazing. That's like a really good score.

It's a really good score. And the parents, like, why didn't you get him a 1550? And you hear Rick Singer go, at some point, no one's going to believe that your daughter got a 1550. Yeah. 1440 is hard enough. And you just hear him kind of like not so diplomatically saying, your daughter is a knucklehead. No one's going to believe this. We're already on the very edge of credibility, and you want to fluff your ego that your daughter's a genius.

That's right. He understood that it had to be somewhat measured, pushing the edge a little bit. Yeah, I listen to those tapes. Yeah. Like, it can look like a fluke, but it can't look like a miracle. That's right. It began to look like a fluke or a miracle when some of the, at USC, we practice next to the water polo team. Some of the greatest athletes you'll ever see. Sure. Okay, let me, let me be clear. Number one in the country, phenomenal athletes. baseball for me was a full-time job since I was like eight, no different with these water polo players. To create profiles that their child was going to play water polo at SC, to play there is just the odds of it are just so incredibly low. So I think they got a little lazy over time. I think they felt there were no checks and balances.

They had such a system in place. Over time, when you break the law long enough and you're so confident it can continue, you begin to get a little loose. You begin to get a little bit lazy and eventually it all comes crumbling down. Yeah, yeah, you see people like, they're, hey, we need her to take a picture near a boat because she's on the rolling team. And it's like you're... That's the mail fraud, by the way. You take the photo of the boat and you set it in the mail. Oh, that's the, yeah. That is a federal crime. And some people in this case have said, I didn't know it was a federal crime.

It's like, yes, it's not like you go to your coffee shop and they have a list of federal crimes put in front of you, though you'd be stunned how many people break some law every single day. And I've said that the Department of Justice wanted to incarcerate everyone. They probably could find some law they broke. But many of the defenses is I didn't know that was a law. I've had a number of clients go to prison for what's called structuring, where you make deposits in a bank directly below $10,000.

over a period of time. So that you don't have to report them? Yeah. And they're like, well, I thought it was this $10,000 threshold. I'm like, yes, but you did $99,99 repeatedly over a period of time. You broke the law, that structure. And here's why. And they're like, well, I had no idea. Nobody told me. Who do you expect to tell you? So it's understanding that that for some is, it takes a little bit of time. That's why in ethics in motion, I actually write out the statutes of mail fraud, wire fraud, securities fraud, bribery. People have no idea until they read it. So people think, well, if it's above $10,000, The bank has to report it. So I'm going to deposit $9,99 every three days for 10 years and not get caught.

Or take out just that amount of money, $99,99, or $999 or $9,900. But over a period of time, these banks are pretty sophisticated. They know what they're doing. They're going to get a ding that goes, hey, this person's doing something weird. Yes. But because they're not criminal-minded, so to speak. And frankly, in some case, we talked about infidelity earlier. There was a case where many, many years ago, a client.

was taking money out of the bank, and he was paying off a mistress. He had gotten caught, very successful business tyco. And he had a mistress, and the mistress essentially said, look, either you leave your wife and marry me or I want to pay off. And it's like, well, he and his wife did everything together on all of the bank account. So over a period of time, he withdrew money less than this $10,000 threshold. And he was paying it to his mistress with whom he had broken up from. And she was paying taxes on it. They had some agreement that she was going to pay tax on it. But as a result of those withdrawals, over a sustained period of time, essentially trying to hide it from his wife, he was indicted

for structuring, and he went to prison over it. Dang. So it goes to show why even imbalances in your personal life, even when he was a very successful ethical executive who had built brands and millions of dollars in income, imbalances in your personal life can lead you to federal prison. You're listening to the Jordan Harbinger show with our guest, Justin Piperney. We'll be right back after this. Thank you for listening and supporting the show.

Your support of our advertisers keeps us on the air. To learn more and get links to all the great discounts you just heard so you can check out those amazing sponsors, visit Jordan Harbinger.com slash deals. And don't forget the worksheet for today's episode. That link is in the show notes at Jordan Harbinger.com slash podcast. And if you're listening to us on the Overcast player, please make sure you click that little star next to the episode. We really appreciate it. And now for the conclusion of this episode with Justin Piperney. Speaking of the personal life, you talk about other inmates, one of which is, his name is

Steve, and I'm sure that's in air quotes. This guy was a controller of a company for over a decade. He created some straw company. Tell me about Steve, because he just seems like he never, the message never quite got through to him. So Steve was someone who, I talk a lot about my, with my clients, about understanding your tendencies. Can you be swept into it? Can you be punished? Forty-eight laws of power. I know you know the authors. Green, yeah. That book is not allowed in federal prisons, by the way. Yeah, he's told me that. And a lot of people- And it always finds its way in. Let me be clear. I volunteered at a prison, and I went to, and all of the guys were familiar with that book. And a lot of them, the more violent and gang-related and sort of predatory, these guys had grown up, the way they'd grown up. One guy even told me, I've read that book, it's all right, but most of its common sense around here. And that's part of the reason. You get into Machiavellian-type stuff and Napoleon and, you know, and how PT-Bar.

and built his business. It's like, wow, I had no idea. So I can understand why parts of it wouldn't be included. But to someone like Steve, he didn't understand how easily he could be exploited. So in his case, he never thought about breaking the law, but a boss comes to him and says, I want you to do this. I want you to fudge this number. And it's like, well, I don't really think we should do that. It doesn't make sense. And he's pressured. And he's pushed and threatened with getting fired. If he doesn't do it, then Steve's begin to think about his wife and his children. and okay, my boss is telling me to do it. But part of it is he's a pleaser and he can't say no.

People pleasers get run over in life. They will own you. So Steve's biggest problem was he knew that it was wrong. It's stunning how many people break the law and knowing that it's wrong that they still do it anyway because they're pushed. Social pressure, career pressure. Of course. So that was really the case here.

Knew that it was wrong. Didn't want to do it. Compelled. Didn't think that he could say no. Thought that he would lose his job. And as he later said, big deal, man. Maybe I lose my job. I still have a CFO.

I still have an MBA. I could go somewhere else. I wish I would have thought to do that because I wouldn't have gone to prison and have to start over. So the case there, like so many clients is, pushed to do something new that it was wrong, was afraid to say no and rationalize that this is the way the business was done. His boss was telling them to do it. And the irony is in that case, Steve's boss gets indicted first.

He's the creator of the fraud, the orchestrator of the fraud. Steve is involved kind of more tangentially on the side, just doing what his boss tells them to do. But because the C.O. or CEO gets indicted first and cooperates first, cooperates against Steve. He gets a shorter prison term than Steve, who I think got five years. I wrote that story like 10 or 11 years ago. The point is, it comes back to intent. The government doesn't care. It doesn't matter if you were swept into this. They think you broke the law. They have a narrative. And they are, they're out to punish. And they love, they love cooperators, even if you were the one that created the fraud, because you have the most to give. That's the first question the FBI,

I will ever ask, I hope you're never in the situation. Yeah. But if you ever are, the first thing they're going to say, hi, it's, Jordan, it's nice to know. And you're going to say, thank you. Thank you. And they're going to say, is there anything you'd like to tell us? And what they're basically saying is, tell us everything you did wrong or anyone else has ever done wrong if you'd like to try to keep yourself out of jail.

Yeah, that's when I drink my lawyer. And I go, I'm just going to spill the meetings. And he goes, do it. Or let's get something on paper. And I go, here's everybody that I was involved. You please don't send me to jail. That's essentially what they're looking for. And that's what Steve's boss did.

and then he cooperated the wire, the phone tap, the whole shtick, and before you know it. That's white-collar crime. Imagine how, yeah, you don't have these mafia rules. You're going, that guy, never really liked that guy anyway. Yeah, here's what he did. It's all his fault. I mean, yes, my name's on everything. And yes, I thought of everything.

That's right. Really, it's all him. Well, actually, there is something called red-collar crime, a professor. Red-collar crime? Red-collar crime. I've heard of that. He's kind of pioneered this red-collar crime, which means white-collar crime goes violent. Oh, interesting.

Yeah, so occasionally. Like blood on the collar. Yeah, that's right. That's what that he wrote. Yeah, so essentially you have some doctor who's being cooperated against. He's looking at eight years in prison. He's like, I still have resources. I'm going to hire a hitman and bad things occasionally happen.

Red collar crime is a thing, small, but every now and again, when a client cooperates, I'll have to ask, who are the players here? Yeah, yeah. Where are they from? Oh, they own a bunch of restaurants in Little Italy. It's fine. They're just food guys. garbage company construction.

Nobody's worried about. That was very good. Nowadays, we have to consider that question. Oh, I'm sure. Yeah. Yeah, oh, I don't know. They're all Albanian. They live in Glendale.

It's not going to be a problem. You know, like math at all, I'm stereotyping here. But, you know, it's like people that you wouldn't mess with. Yes, yes. And you think about this a lot when, I think, would think about this a lot going to prison. Like, what can I do to get out of this? And sometimes you're, then you're looking at, I can't spend eight years in prison. Yeah. I'll do any, I'd rather die than go. And that's like, that's why people go on suicide watch. But even before that,

it's like, can I just off somebody? Can I just run them over with a car? And then maybe they'll, maybe they won't catch me. Or they, or we flee, yet we don't think to pay cash, because four days later, we're found in Boise, Idaho using our debit card. Right. In a coffee shop, and the feds are there with helicopters and guns about 45 minutes later. We're not the best criminals. We got to own that. We got to acknowledge that. You should have just stuck with selling stocks.

Yeah. And a lot of these prisoners that you were with, they're living in denial. And that seems to be a common response that you found. Not everybody turned around and went. You know, I did this to myself. I need to figure this out. A lot of people still seem like they're entitled or they feel like they were entitled to the money. How many people that you met felt that they hadn't really done anything wrong, that they were owed that money and they just went about getting it another way?

A lot of defendants will acknowledge. They made some bad decisions. They don't think it should be criminal, civil at worst. Maybe SEC, FTC, federal trade commission type issue, but not criminal. Then they rationalize, for example, they'll say, look at the mortgage meltdown of 8, 9, 10, 11, and 12. No upper level executive went to prison other than one or two. They're choosing to prosecute me as the low-hanging fruit. it's not fair. So they rationalize their way and convincing themselves they shouldn't be prosecuted.

They're in a great deal of denial saying perhaps I didn't have intent. And then in time, if they take the time to read, we talk about 48 laws of power, Manson's book, you know, Mark's book, others, if they take the time to understand the motivations behind their decisions, over time, they begin to see, yeah, I made some bad choices. I can kind of understand the government's version of events. I don't fully agree with my prison term. I may not fully agree with everything I pled guilty to. But I can now see how my conduct created some victim. and how even in a tax case, the victim is a taxpayer who chooses to pay his taxes lawfully. Or in the college scandal case, I'll admit, a defendant in the case reached out to me, and it was a tough call

because the call was, there are no victims here, if anything, it's my children, they're being shunned at school, they're being ostracized, and it's like, hold on, if I'm going to help you, and maybe I won't be able to help you because you don't want to hear what I have to say. If you want to continue to live, like the ostrich with the head buried, that's cool, but I won't take your money. If you want to hear what I have to say, let's begin to focus on who the victim is. Some kids working their ass off to get into a school right now that they may not get into because perhaps your son or daughter took their spot. Can you embrace that?

Can you own that? Can you acknowledge that? For some, embracing the reality of it is so difficult. Sure. So hard. So trembling that it's easier just to remain living in denial or like with the headbear. Because it speaks to your identity, right? Like, yes, I did essentially steal a rowing team spot away from an inner city girl who worked

her ass off to get it because my kid didn't try hard. Who wants to be on the cover of the LA Times or New York Times owning and acknowledging the biggest failure in life? It's like, has anyone ever gotten an F on a paper? Okay. I want you to go tell the whole world about that F. It's like, I don't want to do that. Yeah, and that's exactly what I am telling them to do, to own and acknowledge your mistakes that were humans, were fallible, but we can overcome them with the right plan. And unfortunately, in this case, many of these defendants, as you saw in those hundreds of YouTube comments, people perhaps don't look within. They don't think that perhaps they should look at their own behavior

before casting stones at others. And that's been unfortunate here. It's true. I mentioned before that I volunteered and went to a prison with an amazing charity called Hustle 2.0. And a lot of the guys in there, 75% life sentences over at Kern. I think when I talked about this pre-show.

And a lot of them, the majority of them had accepted what they have done, and they've done these pretty violent and terrible. things, a lot of them. But then you hear some of their stories and you go, I don't know if I would have made different choices in their shoes. You know, they go, yes, I've made a lot of bad choices in my life. And then you hear their story. When I was eight, my dad killed my mom, so I went to live with my cousins, and they were selling drugs. And then one of them got shot. And then they said they were going to kill me. So I got a gun from my sister. And then one of them came after me. So I shot him. And now I've been in prison. And I go, I'm waiting for the part where you do something horrible and

it makes you a monster. I'm not, I wasn't expecting to hear about how your life was a giant shit sandwich from essentially day one and you had no chance other than becoming some sort of superhero of willpower that hides in the library all day? Like you really think, how would, how would, where would you have made a different choice? Well, at age nine, you could have decided that you were going to read instead of go hang out with your family. That would have been the choice that would have changed your life. Would I have made that choice? Not a chance. So you just touched on something that's, that's important for sentencing for a white collar defendant, perhaps versus another defendant. So I had a client who was worth hundreds of millions of

went to the best schools, raised with privilege like we couldn't even, you know, believe. And I could believe it. It just never happened to me. I could think of it. It never happened to me. But he was afraid to tell the judge about this privilege and opportunity he had because a judge could easily say, you had it so much better than every defendant in this courtroom. You had it better than Jimmy. He was here three weeks ago. He'd been in and out of Juvenile Hall from 9, 10, 15. Mother was on drugs. Father was murdered. Other kids are in foster care. Of course he's supposed to end up in the criminal justice system. Of course it's going to be a revolving door for him. It should not have been for you.

So what I encourage our clients to do is to own it, to acknowledge it. I've used this analogy before the movie, 8 Mile with Eminem, where at the end of the movie, like he does the rap battle, and essentially he says during the rap battle everything the guy against him could say. Like, you did sleep with my girl, and I am white trash, and my boy did shoot himself in the leg, and he gives the guy on the mic, and the guy drops it. He's like, I have nothing else to say.

So we kind of want defendants to say the same thing. Your Honor, I did have opportunity. I did have privilege. I did know better. For that reason, I never should have ended up in this courtroom. This is how I'll do better. I think it's important to draw that comparison between defendants like you may seen in that federal prison who frankly had it measurably harder to the point where I could not even imagine than most of my clients. Don't run from it. Own it. And those sorts of things can help defendants out of sentencing. And it brings a sense of perspective, by the way. Yeah. You know, that's important here. Yeah. Yeah. That is true. Yeah. And of course, it's not like the judge doesn't know, oh, you're, you have the same last name as that guy who's on the buildings downtown.

They're not stupid. Right. Yeah. And I've had clients. I went to Yale and my lawyer, my judge went to Yale. Own it. Talk about it. Tell me, you let them down.

You let every alum down. What are your plans to become better? What is your path moving forward? That is what it takes. The perspective portion of it is key because it's easy to surrender to prison, Jordan, and your focus on how your own life is important. I'm in prison. what am I doing? This is awful. I have nothing left. And then you realize, my, I only have two years or three years. I'm so fortunate and grateful and thankful because my bunkies got 20 years because of our country's mandatory minimum drug crimes.

He's got 15 years left. I'll be home in two years. He'll have another 13 years to stand for count. You've got to find that perspective. You've got to become grateful for what's left versus all that's lost. And that was really a big transformation for me focusing on what was left. My family and my mind and willingness to work hard and be competitive versus obsessing over everything that had crumbled down. Speaking of owning it, tell me, tell me about the lie detector test. That was, that was when you were still in, uh, I can beat this mode. And that, pardon me for laughing. It's kind of a funny story. It is very funny. Thank God. I have an ability to be self-deprecating. Because even though I'm 44 now, I have to take you back to what I was thinking at 29. When my parents said, we don't

think you could do one day in prison, let alone five. And I remember, thanks for, thanks for the vote of confidence. I appreciate it. But it comes back to what I said earlier that I had never had any setbacks before. So I didn't think I could handle it either. So my lawyer, I was convinced that I had done nothing wrong or that I should avoid any problems here. So I told my lawyer set up a lie detector test. And they said, well, why do you want to do that? And I said, you just set it up. And they said, Justin, it's going to be expensive. I said, well, I have resources. I can pay for it. That's fine. And it was a polygraph. It was like five grand. Okay. And it's presided over by a former FBI agent, a retired FBI agent that does the exam. So my law firm was in LA. They said,

okay, we'll coordinate it in San Francisco. It said fine. So at the end of this meeting with my lawyer, he said, great, we're going to create this lie detector. Do not cheat. Don't cheat. You show up, answer the questions honestly, and the truth will speak for itself. So I said, I'm insulted that you would think that I would cheat this exam. What am I paying you money for? This is ridiculous. I've done nothing wrong. I've been set up. If anything, this test is going to, this lie detector test will me free. So of course, as soon as I said that to him, I went home. I started Googling how to prepare for a euphemism for cheat, a lie detector test. I then actually, I called someone. I said, I see you're selling a course online. He said, what do you need to take a lie detector test for?

So that's a good question. This is how one lie becomes another. I'm like, well, I'm interviewing with the government and I just want to be prepared. He said, great, download the course. It's $350. I guarantee you you'll pass or I'll give you your money back. Of course, if you fail, you're too embarrassed to call to get the money back to you never call. I download the course for days on end. I'm preparing and studying for the exam, like 12, 14 hours a day, techniques, the squeezing of the tush, the clenching of the toe, answering questions appropriately, the way I breathe, the whole, the whole thing. I walked into that exam in San Francisco so positive that I would pass. I mean, I had invested the hours, man. I had put in the time. When the

questions, and the questions came, I clenched the tush and curled the toe. Yeah, sphincters and muscles are all. I was on my game. I was ready to rock and roll. And I was thinking of the apology that eventually people would give to me for dragging me through this and the money that I'd spent on lawyer fees. That's how delusional I was. And at the end of the test, they said, okay, it's going to be a few minutes for the results.

And my lawyer said, how do you feel? I said, I feel pretty good, man. This is good. It's about to get this show on the road. And a little while later, the FBI agent came back in and said, the results are with greater than 99.9999. I mean, we're thinking like, how many times this guy going to say nine? Like, we get it, we get it, man. We get it.

That I had failed the exam. And I was in San Francisco, ironically, overlooking Alcatraz. Oh, so you're looking out at, like, this notorious prison and you're going to... And I'm thinking Shawshanker redemption, Cool Hand Luke. And then my lawyer says, you're going to go to jail for seven years. And I'm like, I'm stunned. And then I went back to Oakland Airport, and I was like 30 pounds heavier. I got like three slices of pizza.

I was kind of nihilistic, actually. My life doesn't matter. It's all garbage. It's meaningless anyway. I'm going to eat. I'm going to drink. I'm going to smoke. I'm going to ruin my life.

I'm going to jail. Nothing matters. That's the way that I tried to convince myself. That's the way that I tried to sleep. And then, of course, when I went to prison, the way, part of the reason I transformed myself is I realized everything mattered. Every word, every statement, everything I thought mattered, even if it didn't matter to anybody else.

And that was a big transformation for me. But that's how I slept at night by saying, nothing matter. anyway, whatever. We're all going to die. We're all going to drop dead. A thousand years from now, no one's ever going to remember that I went to federal prison. It's all good. That allowed me to sort of sleep as I went through this nightmare and misery. But denial, resisting it made it worse, right? Oh, yeah. I had bouts of, like, reality like this is coming, and then I would easily kind of revert back to, well, maybe they'll forget about me. Maybe this won't happen. Maybe I won't go to prison. Maybe they'll see me that I'm a good guy. Maybe they'll see I didn't have bad intentions.

and there were a lot of lawyers who were welcoming my paycheck. They're welcoming their hourly rate to let me spin those tails. Man, because, well, polygraphs are usually, I think, at best, 70% accurate. So what was going on there when he's like 99.99. Did he just go, based on his experience, he's probably just telling your lawyer, this guy's so full of crap. Yes, that's exactly what happened. Like, don't believe him.

Tell him for his own good. It is obvious that he is lying. I actually gave him a look after he said nine for the seven times. It's like, dude, like we get it. I failed it. I didn't pass. Failed the freaking test. Get out. Let me speak with my lawyer. I paid you five grand. I flushed more money down the toilet. Leave. Let me speak with my lawyer and find out what the next plan is because I'm looking in Alcatraz and I think I'm going to go to prison for seven years. Let me get this together. And, you know, he did leave. I never saw him again. I did get his bill, which I paid. I'm sure. Yeah. He was like, well, I'm leaving, but I'm going to leave you with this.

Here you go. Yes. Yes. I wish you well in prison. Yes. I'm sorry you failed the exam before. you leave, here's a bill. Don't forget to pay this. Don't forget to pay this. That's right. There's value in the catharsis that comes with finally telling the truth, right? It's almost selfish. To tell the truth? It's selfish to, even like my writing, I've said, I write for my own clarity of thought. Sure.

That others benefit from it as a value. But it was cathartic to finally speak openly about my bad choices to get some sympathy from others. Part of the reason we speak openly is because we want people to say, oh, you're a good person. and we forgive you, we love you. It is really a selfish endeavor. But it also benefited me at sentencing when I began to cathartically talk about bad choices I had made and my plans to move forward. So someone call it a win-win.

In my case, it was pretty selfish. But it's something I continue to do. I speak openly about my bad choices, both for me and for others. I don't run from them. We're humans. I think others can learn from them. And it's part of my climb back to wholesomeness. I mean, I have two young children.

And I don't want to think that this experience was for nothing. If it was for nothing, the government would have won, would have been a horrific experience in my life. It had to be a net positive. And if that meant positive, it is ensuring that my children are those that I love, never have to endure this, where people whom I care about, my clients can get through this more successfully, then perhaps it was all worth it.

Tell me a little bit about what happens when you get sentenced. So there's surrendering to prison, and it seems like there's a right way and a wrong way to do this. This whole self-surrender thing is very new to me. I had no idea that if you're... State is different from federal. It is, okay. But if you're like, you can get kind of little advantages.

These are the things you teach your clients. Like, hey, if you do this right, you can self-surrender. You're not going to have to get your door kicked in or whatever. Right. So in my case, I was sentenced to prison. The judge gave me eight weeks to self-surrender to prison. Okay. So it's like close your bank accounts or...

Prepare if you have children, make changes. power of attorneys, businesses shut them down, or whatever it may be. And plus it cost resources if they were to remand me and put me through transit. And that wasn't necessary. So most of my clients were able to self-surrender to prison. Some defendants, one, if they're convicted at trial, oftentimes the judge will immediately have them arrested and remanded to custody. And that is the real prison. That is when you're going through here, you know, the metropolitan detention center in downtown. That's when you got the, the, the, the, the, the, the, the, the, the, the, the, the, the, chains and shackles on, you're traveling in an airplane locked up, using the restroom in front of

people, you're around all types of violent offenders, murders, rapists, thugs, kidnappers, child, sex offenders, they don't segregate you as a white-collar defendant when you're in transit. And that's something that some defendants in this college cheating case could face. So, for example, I assure you, if Felicity Huffman gets sentenced to prison, she will be able to self-surrender. She'll go to Victorville here in Southern California. She'll, someone will drop her off. Fine.

So she just walks in. Hi, I'm Felicity. shoes in the car and walk. So, hi, I'm Felicity. I'm here to surrender to federal prison. I have my medications. I have some money. I'm here to answer any questions you have.

Thank you. Someone will walk in with her and take her, and they'll drive away and she'll stay. That's what will happen to her, as was the case with me. Lori, for example, if she's convicted at trial and it appears as if she's going to go to trial, both her and her husband, you could expect. John, is she married to John? No, sorry. I'm confusing this. John Stamos.

That's on full house. Yes. Maybe I should watch less TV. 20 years ago. She's married to Massimo, the designer. Correct. That's so funny. Not Uncle Jesse. Correct. Sorry, John Stamman. Didn't mean to sell your good name. And if they're convicted at trial, and if they go, by the way, I hope they prevail. Because we send too many people to prison in this country. I don't think any of them need to be in prison as off-putting as that is to some people because it frustrates them and they get into the rich and privilege. Don't go.

I just don't think our tax dollars need to warehouse them in a minimum security camp. Sure. I don't. The greatest, it's a lifelong sanction for. for them anyway, whether they go to prison or not. But in the Lori case, if she's convicted at trial, there's a very good chance the judge may remand her, maybe not let her stay out on appeal. And that's when you go through the transit. That's when you go through the county jail. That's when you go through the shackles. That's the real prison. And those are some of the cases where you are unable to self-surrender. And that is, it's a measurably different and harder experience. And the benefit of going through transit, by the way, is once you ultimately

get to the prison, you're like, oh, prison's easier because I just endure transit. You always have to find some positives. But generally, you want to avoid it if you can't. Yeah. Oh, yeah, there's a lot of, oh, man, it can be so much easier. But it's kind of like one, on the path that some of these people are on, they're not trying to figure out how to make this easier on themselves. They're just going to be in denial until it's kind of too late. For some, sometimes denial, even after they're convicted at trial sometimes, they'll, they'll come around and understand it, then look back and say, oh, it's so obvious to me. How didn't I know? Why didn't I do this? I've had a number of those talks with defendants. Sometimes they'll say, oh, I'm taking a plea deal only because they

threaten to indict my wife. So, F it, I'm going to sign it, whatever. And then like a year later, they'll say, well, thank God I sign this thing because I did it. My wife kind of did it too. And by signing a deal, they kept her out of the indictment. It takes a little while to wake up and acknowledge, I broke the law. I cheated. I created victims. It is a, you know, it takes some time. It takes some peppering and understanding of reading and learning and thinking of understanding the stakeholders, how the government views you, how the government thinks of you. And if you can put yourself, I've trained FBI agents. I've been to the Academy in Quantico, Virginia, speaking to new agents, they're driven. They're out to advance their career.

They're out to get convictions. If you can understand the mindset of an FBI agent, what their goal is, you can traverse this experience a little better. When you were inside, you had a role model, Arthur, as his maybe real name or maybe pretend name in the book. What did you learn from him that you share with your clients? Because there were other people in here in your book that did not seem to learn anything. Well, the two biggest role models from me were Arthur, who unfortunately passed away in prison. He had an aneurysm and died on the track. Yeah, terrible.

And Arthur really got me into long distance running and the idea that this could be a really productive, positive experience. It's from the day I got there. He said, you could recalibrate, you could read, you can write, you can think, you can exercise. So he was very positive. My other mentor who had the most influence on me in my life, as much as my father, I could say, his name is Michael Santos, who's served 26 years in prison. He'd been in 22 years when I shook his hand, got an undergraduate master's degree in prison, wrote a very popular book called Inside Life Behind Wars in America that St. Martin's Press brought out.

He wrote it from prison. So, you know, I wonder, like, why are you smart? Miling, dude, you've been in jail 22 years. Like, what's wrong with you? Are you nuts? There's this stigma about him or this aura about him. And he helped me understand how using time in prison productively can prepare for a better life upon release. And he encouraged me to speak openly and honestly about my conduct. It's almost like, remember like the Seinfeld episode where George did the exact opposite?

Like I figured out what he was... I'm going to order chicken. I'm going to order to you. I'm going to walk up to this girl and say, I'm George. I'm short, fat bald and I live with my parents. She's like, oh, nice to meet you. He says everything I do is wrong. I'm just going to do the outside.

It worked. So part of me was like, I'm just going to do the exact opposite. I'm going to speak openly about breaking the law. I'm going to speak openly about living in denial. I'm going to speak openly about what I've learned from this experience. I'm going to speak openly how I was a privileged, rich kid who had all the breaks in life, and I deserve to be scrutinized. I deserve to be punished.

I'm going to talk about how I'm going to climb back up. I'm going to talk about how I intend to tell a beautiful woman on a date someday that I just got out of jail. And that beautiful woman is now my wife. Sandra, and we have two kids. and she won't judge me for going to prison, but rather the lessons that I've learned. And perhaps she can juxtapose my life before prison and after prison and say, you're doing good things. I want to be a part of it. I did everything different rather than hide in the quarter. Don't talk about it.

Lay low, be quiet. Don't talk about bad choices you make. People are always going to judge you. It's like we're convicted felons. We're going to be judged the rest of our life for bad choices. I want to create this new record. So by thinking differently, by creating my own record, frankly, by not caring any longer what people thought, even guards who say, said, ain't no one going to care about some felon writing a book about ethics or prison, ain't nobody going to care? I wanted to correct the English. Instead, I just said, thank you. By going down this own path with my own thoughts, it's the reason that I'm here. And I've built this business. And I'm happily married with kids and scores of clients who find value in our work.

Going down my own path without concern for what others thought, doing it the right way, changed my life. And that was all a result of going to federal prison. You mentioned in the book, that some of the people who go in for white-collar crime, they don't want to do the work it takes when they get out. And I get that, right? If you're a CFO of a big company or you are making or stealing millions of dollars, and then you get out and you think, well, I'm just going to get some cush job. I mean, that's what I'm used to.

I'm not going to drive for Uber. I'm not going to go work at Chipotle if they'll have me. So you just summed up arguably the most important point for any white-collar defendant who has to rebuild coming home from prison. Some think the work may be beneath them. Not all, my clients certainly don't. All work is honorable work. When I came home from prison, I worked as a receptionist for three months.

I picked up phones. I poured coffee. I licked envelopes. I sent faxes. Twelve bucks an hour. Whatever it took to earn a law-abiding wage to begin to create a new record. I've had clients absolutely do the same. But admittedly, some defendants will reach out and say,

and I'd rather stay in jail than drive for Uber. I have an MBA from a top school. I want to work. Right, right. Yeah, yeah, exactly. I'm not going to do that. So I beg and I encourage them. Look at this as like a one or three or five year plan.

What you're doing today, you may not be doing in three, five or ten years, but you've got to begin to create a new record. And if you can do that, opportunities open. I'm surprised at how many are unwilling to do it. And frankly, you know, something that marked, I hate to promote Mark's book, but I like his book. I bought more than 200 copies of his first book and send them to clients. And something he talks about in the first book I like is everyone says they want something or something akin to this. He writes. Everyone says they want something. And then when people see the work associated with it, maybe they don't really want that back because they don't do it.

And that's what I frequently say to my clients. It's like the guy that wants six-pack abs, but he's sitting on the couch eating donuts. Well, maybe you don't really want it, but it's easier to talk about it. And that's a conversation I have with clients. If you want it, this is the plan. This is the plan. This is. is the path back. Are you willing to invest the time when nobody cares, when no one's watching, when you have six followers on Instagram, two on Twitter. You got a probation officer breathing down your neck for $100 a month in restitution. You're living in a dumpy apartment. And you've got to get past thinking about who you once were, the life you once led, the money you made, the women you dated,

the private jets you flew. Can you get past that? That is no longer your life. Just like I'm no longer a baseball player. I couldn't even fill the ground ball right now. I'm so old. If they can embrace that, they can begin to put steps in motion. Some can do it. Some cannot. It's really a reflection of what type of character do they really have. Yeah. Yeah. Man, I can only imagine you're sort of part fixer, part advisor, part therapist. At times, I feel like I speak to directly and to the point, but we have defendants have been through so much, why mince words? Why placate? Yeah. Well, why put, I don't use cliches. It is what it is. What kills you makes you stronger. No, no, no, no, no. Everything you do matters. That's what I tell them. That was a transformation for me.

Everything you do today matters. Everything you do. The next job, the interview, what you write, how you respond to people. When they ask you about your crime, you're beginning to create a new record. And if you can look at it from that way as I did, even though nobody cares, nobody may be watching. No one's paying attention. If you can do that as I did, eventually people will care. Eventually people will take notes, even if it's only your family.

Even if it's only your children, they don't have to do podcasts and be on media and write books and be on TV. If they're relevant in their own life, there's dignity in that, there's self-esteem in that. And everyone has to find value in the climb. I found great value in climbing back to a sense of respectability. You mentioned that you don't think the college admissions, some of the college admissions scandal defendants should go to prison. Rick, obviously, that guy is he needs to go to jail. You could even argue, does he really need to go to jail?

But yes, he's going to prison. That's a whole different policy debate we can get into. some of the celebrities that you were talking about before because it costs money to warehouse them and things like that and embarrassment is bad enough. I mean, I do tend to agree at some level just from a very practical level that, look, their lives are in many ways in shambles. Do I need to pay as a taxpayer 30, 80 grand, whatever it is to keep them locked up? I do. There's a part of me. You want a locked up. Own it. I acknowledge it. You want Felicity standing for count. I want a serious year in an orange jumps. You want to you, you want the restrooms. You want the, you want the,

You want the photo. You want, I get it. Yeah. I want to see Aunt Becky take a slice of humble pie. And when you have to fully understand that she's taking it all red, that's the point that I'm trying to convey here. Yeah, I know. Yeah.

Regardless of the prison term, it is a lifelong from voting to reputation, to the stigma. Cry me a river. Okay, okay. I threw that out there. Okay. Yeah. Okay. Maybe I agree with that one.

But it's a lifelong stigma. Yeah. And regardless of whether they get three months, six months, nine months or probation. it's something that's going to follow them for the rest of their life. And I think people who so want them to go to prison, who may not recognize that their tax dollars could be better spent on the homelessness problem here in California. Yeah. Drive through Skid Row right now. I mean, there are diseases coming back to Los Angeles that we have not seen since the dark age. We just talked about that on the show yesterday. Dr. Drew, a friend of Mike, Drew Pinski, he said.

I did his radio show. Oh, you did? Okay. So he was saying, we're going to see maybe bubonic plague outbreak. And we, Jen and I were driving the other day. And I said, oh, there's a recycling center. And then I went, whoa, no, that's not a recycling center. It's a city of homeless people on like a parking, abandoned parking lot. People who work in Skid Row as an executives are obtaining illnesses by walking to their office. So I'm not saying that some shouldn't serve time in prison, but to warehouse them at more than $30,000 a year plus the cost of probation, insurance in this country, homelessness, poverty. There are a myriad other places, perhaps we can spend that money. But the criminal justice system at warehouses so many people, it employs so many people.

It's a bureaucracy that has an interest to continue to grow and employ and warehouse people. And frankly, most people don't think about their tax dollars, you know, imprisoning someone. So they just look at it as a cost they don't think much about. And there's very little sympathy. But so I just, I like to convey that to people. Whether she serves four months or six months or gets probation, it's a lifelong stigma. In some cases, it can be a net positive for them. I think it was from Martha Stewart. She helped a lot of women in prison. Do you think you should have gone to prison? I think that, yes, I do. Let me explain why. I knew that it was wrong. I knew that while I was sitting in a meeting and someone was being told that a certain return existed, I knew that it was a lie.

And people were hurt as a result of that. Even though in my case, all the money was repaid, all the victims have got their money back. That must feel good. I think even the legal fees. I think even the money the lawyers get for represent, they got paid back as well. But it doesn't change that some of the humanity was stripped away. Their faith and belief in people as a result of being exploited or taken advantage of. So there should be a consequence, and there also has to be a deterrence. And that's why these people are, the people in the college cases will go to prison. The government will argue with sentencing. They're not going to recidivate. In other words, come home and go back to prison. Sure. They know that. The argument for imprisonment is going to be

deterrent. Some doctor in New Haven needs to know what happens if you try to cheat to get your son into a school. You're going to go to prison. It's the deterrence factor that the government is going to argue for. Nothing else. Sure. Sure. Look, this is probably something you hear all the time, and it is from your YouTube comment section, which we all know what comes out of a YouTube comment section. Yes. But nothing quite says privilege like hiring a prison consultant before you get locked up, right? Because that's the argument. Look at these privileged eh-holes and they're privileged brat kids. And now they're hiring this consultant. And you and I were talking pre-show about how it can be pretty unpopular that you even exist doing this business.

I have had to embrace this reality from the Post and CNN and Fox and all of this coverage that I've had that I'm some pricey consultant helping privileged people stay out of prison. I view it differently, of course. I'll share a quick example with you. When I was a senior in high school and USC came to watch me play, I had a baseball game where I was 0 for 5 with three strikeouts and I made three errors. You would think I'd never played baseball before. It was horrific. If USC judged me for that one game, they never would have invited me to play baseball at USC. But over the course of the whole season, I had a pretty damn good year. So what we

do is help clients convey to the government why the totality of their life should be taken into consideration. While perhaps one bad choice they made shouldn't define their life at sentencing. So that is the point here. There are good things that they have done, but the government has a version of events. They broke the law. They created victims. They deserve to be punished. lawyers are paid to extol the virtues of their clients. They're paid to say, I know you're a lawyer, so forgive me. But you're paid whether your client is a good or bad dude. Yeah, everyone deserves a zealous defense.

We've got Charles Manson, Bernie Madoff had a lawyer extol some good thing at their sentencing to try to warrant a shorter sentence. You're paid to do it. We believe. And what we do is help defendants articulate through their own words. I'm getting excited. Through their own words. Why they're worthy of mercy.

So I don't think it's a privileged thing to do. It's the responsible thing to do. If not, you're going to be judged for the worst decision. Like USC would have judged me for the 0 for 5 with three strikeouts. And anyone can do it. We work with federal public defenders who refer us a client that's going in for 10 years for a drug case. We have books for $9 and everything in between. It's not just a privileged person, though that floats well in the media.

It's anyone who's willing to say to the government, I made bad choices, but I can become better. And we help them do that. And we're privileged to help them do that. It's an interesting line of work that you're in, Justin. So thank you for sharing that with us today. Thank you. Thank you. I really enjoy your show.

Thanks for the invitation. This is a great episode because I love the fact that he went to jail and actually became better as a result, coming out of it, having done a bunch of personal growth, and now he helps other people prepare for their time in there. And I know a lot of people will go, I can't believe it. It's such a, the height of privilege to hire somebody to prepare yourself to go to prison. I get that, but I also think that there's something just so fascinating about the fact that this even exists. There's just something capitalist and magical about a white-collar prison consultant.

And Justin's a great guy. We became fast friends. I really liked this conversation. And what he does is important. I can imagine that no matter who you are, you're scared of going to prison, no matter what. So to have somebody tell you what it's actually going to be like, not a lawyer who's never been there and visited once, one of their clients. You know, it's going to be a completely different set of advice based on experience. And I'm thankful that we got a chance to talk to him today.

By the way, if you want to know how we managed to book all these amazing folks, it's all through our network. It's all warm introductions, generally. People sending us things, sending us ideas because of the circles that we run in. And if you want to learn how to build that for yourself, check out six-minute networking. It's our free course. It's over at Jordan Harbinger.com slash course.

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And you can find it all for free at Jordan Harbinger.com slash course. By the way, most of the guests here on the show, subscribe to the course and the newsletter. So come join us. Speaking of building relationships, tell me your number one takeaway from Justin Piperney. I'm at Jordan Harbinger on both Twitter and Instagram. And there's a video of this interview on our YouTube at Jordan Harbinger.com slash YouTube. This show is produced in association with podcast one, and this episode was co-produced by Jason Minimum Security to Philipo and Jen Harbinger. Show notes and worksheets by Robert Fogarty, and I'm your host, Jordan Harbinger.

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