By Scott Cohn | American Greed Special Correspondent |  @ScottCohnTV

You’re in love. You’re getting married. Your whole life is ahead of you. The last thing you want to think about is planning for what happens should the marriage end—the dreaded prenuptial agreement.

But for real estate developer Gary Triano, a prenup might not have been a bad idea.

Killed after a round of golf by a pipe bomb planted in his car, his socialite ex-wife and her former boyfriend emerged as prime suspects. The alleged motive? Duh! Greed!

Triano made his fortune first in Arizona real estate, then in bingo parlors on Indian reservations. But the real estate market crashed, tribal-owned casinos became legal, and Triano began falling on hard times. By all accounts, the divorce from his wife of 13 years, Pamela Phillips, was bitter—a clear sign there was no prenup. When the dust settled, Phillips remained the beneficiary on her ex-husband’s $2 million life insurance policy—an ample sum, prosecutors would allege, to continue supporting her in the style to which she was accustomed. And a motive, they would claim, for murder.

Might a prenup have saved Gary Triano’s life? We’ll never know.

But an honest accounting of each other’s finances and a plan for how to split the assets if things go sour is essential, says attorney Arlene Dubin, Chair of the Matrimonial and Family Law practice at Moses and Singer in New York, and author of the book Prenups for Lovers (Villard, 2001).

“How can you have a solid marriage with that elephant in the room?” she says.

Not a multi-millionaire or a socialite? Feel pretty certain your spouse-to-be doesn’t have homicidal tendencies? That doesn’t mean you don’t need a prenup.

“In fact, it’s more important for regular folks than for some of these high-flying celebrities,” Dubin says, because an average couple has fewer assets and less opportunity to make the money back after the marriage ends—which, Dubin points out, “all marriages do,” either through death or divorce.

“Anyone who is in a relationship where money—or attitudes about money—are unequal in any way should consider a prenup,” says Sharon Epperson, CNBC Senior Personal Finance Correspondent and author of The Big Payoff: Financial Fitness for Couples (HarperCollins, 2009). “But even if you don’t have a prenup, you need to have the ‘money talk.’ You need to know how he or she thinks about money as well.”

Whether a frank discussion or a formal agreement, here are some of the things every couple needs to consider:

ASSETS

Got money in the bank? Investments in the market? An inheritance, or the likelihood of receiving one? How would they be divided?

Not all assets are financial. Dubin says many prenups consider “enhanced earning capacity.” Let’s say one spouse will be getting an MBA from Harvard down the road. The additional compensation the degree might bring can be considered marital property under the law.

“It’s very common for people to carve out these intangible assets,” Dubin says. That way, if one spouse worked while the other went to school, both get their fair share of their contributions—financial or otherwise—to the marriage.

Other assets to consider include pensions and other retirement plans, health, disability, and life insurance. Some prenups go as far as spelling out alimony or other support payments.

LIABILITIES

In a nation with $1.3 trillion in student loans, it’s a fair bet these days that at least one spouse will have some substantial debt going in. Who takes over the payments?

“I see situations where doctors with $200,000 in student loans marry investment bankers,” Dubin says.

Whether you are responsible for your spouse’s student loans can depend on the state you live in, and whether the money was borrowed before or after you got married. A good prenup can remove the uncertainty.

Other liabilities to consider include mortgages, car payments, and the costs to start and run a business.

SHHHHH!

We live in an age of social networks, Dubin says, with “people posting everything under the sun on Facebook.”

As a result, she says, prenups increasingly include confidentiality clauses, barring an estranged spouse from spilling the intimate details of your relationship.

The provisions have long been common in celebrity prenups. But in our information-obsessed age, everyone is at risk of embarrassing details going viral.

“Even for average people, these confidentiality clauses are getting to be very important,” Dubin says.

What doesn’t belong in a prenup? Dubin says couples are increasingly asking for what she calls “bad boy” or “bad girl” clauses, addressing things like adultery or addiction, which she says “mix apples and oranges”—the behavioral and financial aspects of a marriage.

“I usually discourage it,” she says.

The key, she says, is a document that is broad enough to address the wide range of potential outcomes, but specific enough to give the couple certainty and peace of mind.

“The beauty of a prenup is that it’s a contractual commitment,” she says.

At the same time, a couple can update a prenup if circumstances change. And if you got married without a prenup, it’s not too late. “Postnups,” executed during a marriage, are just as effective, and increasingly common.

Still, while Dubin says her practice has “absolutely mushroomed” in the past 20 years as prenups have gained acceptance, many couples, especially younger ones, still don’t want to deal with them before the wedding.

“They’d rather be going to a cake tasting,” she says.

And that’s too bad, because a prenup can get the relationship off on the right foot.

“Transparency, disclosure, communication. That’s the key to a successful marriage,” Dubin says.

It also might keep you off a future episode of American Greed.

By Scott Cohn | American Greed Special Correspondent | @ScottCohnTV

It’s the prime location for scams, scoundrels and suckers: real estate.

Think of it. Among the prized possessions we keep in our home is our self worth, making it impossible to separate our emotions from our most valuable asset.

Take Dale Haun and his wife Clancy, who purchased their dream home in Tucson, Arizona, in 2000. For the first six years, they were able to make their mortgage payments and still put some savings aside.

 Dale Haun | Source: Kurtis Productions

“Financially, we were in a good situation,” Dale says.

It was such a good situation, the dream house got them dreaming about the future.

“I thought, we’ll buy this house and we’ll pass it through the generations and have that homestead feeling where this has been our home for seven generations, you know. To be that family,” Clancy recalls.

So when a sales representative from a firm calling itself Pacific Wealth Management offered the Hauns a plan that supposedly would let them refinance and pay off their mortgage years early, they jumped at it. 

“We thought, gosh, if we could pay this house off early, then it’s paid for and done, it’s kind of out of the way, and we can focus on giving to people and helping,” Clancy says.

But it turned out to be a scam, run from a house in Orange County, California. Ringleader James Duncan, who called himself “The King of Cash,” simply co-opted his company’s name from a legitimate San Diego firm called Pacific Wealth Management, and took millions from unsuspecting investors. He and a partner, Hendrix Montecastro, are both in prison.

James Duncan goofing off during Malta trip | Source: Thomas Fuhr

Not only did the Hauns’ monthly payment nearly double, but they also lost more than $70,000 in equity and another $10,000 in savings. They now owe more than the home is worth.

“I feel like the little girl who is just happy all the time until something happens and then it’s like, life is mean,” Clancy says.

Real estate con artists sure are mean, and there are plenty of them out there. Paying attention to the scams of the past can help you avoid getting hit where you live. Here’s a look at some of the wildest real estate scams ever uncovered, and what you can learn from them.

 Waterfront Property

What are the three rules of real estate? Location, location, location. A North Carolina firm, Total Realty Management, hit that theme hard when it marketed undeveloped property to hundreds of Washington DC-area residents—including teachers and Pentagon employees—in the early 2000’s. With the wind of the housing boom at his back, owner Mark Dain was selling undeveloped beachfront lots for as much as $400,000 a parcel.

But the boom went bust and prices plunged to as little as $10,000 per lot. It turned out TRM used falsified appraisals and loan applications to allow people who couldn’t afford the lots to buy in, while major banks allegedly looked the other way. The firm also attracted investors by falsely claiming prominent North Carolinians like Michael Jordan had trusted TRM with their money.

Dain pleaded guilty to a single count of conspiracy and served six months in prison. Three employees also did prison time, and civil lawsuits still abound in what authorities have called the biggest real estate scam in North Carolina history.

TRM was selling the land to people who wanted to live there, but also as investment property they could “flip” as prices rose. And with home prices rising again, flipping is coming back into vogue.

But investing directly in real estate can be incredibly risky. Most of us don’t have the expertise to profitably renovate a home; fewer still know how to navigate the real estate market and not get stuck with money-losing property.

If you still want to try and make money in real estate, consider a Real Estate Investment Trust or REIT. As the name implies, it is a professionally managed organization that allows investors to pool their funds to buy and sell property. They tend to focus on a particular type of real estate—hotels, office buildings, apartment complexes, for example.

And many trade like stocks, which means the Securities and Exchange Commission monitors them. The SEC has a good primer on REITs on its web site. Some things to consider:

• Make sure you understand the tax implications of investing in a REIT. If you don’t, talk to a tax advisor.
• If you are investing in an exchange-traded REIT, you can check it out like any other company. Otherwise, be sure to read the fine print. Some REITs that don’t trade on exchanges can be difficult to sell if you need to.

Midwest Two-Step

The TV commercials were impossible to escape in the Midwest during the 1980s.

Actor George Hamilton, looking as suave and perpetually tanned as he did in any episode of the TV series “Dynasty” around the same period, sits in a richly appointed office telling viewers how they can free up some extra cash each month by refinancing their homes through the Diamond Mortgage Company.

Flip to the next channel, and there’s actor Lloyd Bridges, rugged as he used to be when he was playing Captain Mike Nelson on “Sea Hunt,” but with a touch more gravitas. In an ad clearly geared toward seniors, Bridges is walking around his beach house with what appears to be his grandson on his shoulders.

“Plan for the future with an investment that grows with the years,” he says before turning toward the sea.

He’s pushing “secure” investments with a firm called A.J. Obie.

What the commercials left out was the fact that A.J. Obie and Diamond Mortgage were essentially two arms of the same company.

Diamond would originate the mortgages, often to high-risk borrowers who couldn’t get a loan elsewhere. Obie would sell those mortgages as secure investments, typically to seniors who tended to trust real property more than the rising stock market.

Soon, the scheme began showing cracks. Individual Diamond mortgages were assigned to more than one Obie investor. Some Obie investments had no mortgage backing them at all. And some Diamond borrowers never got their money, but still found their homes mortgaged and impossible to sell. The scam bilked thousands of investors in six states out of $75 million—worth $156 million today.

Owner Barton Greenberg, who operated the companies with his late brother Sheldon, served six years in prison, and actually went back into the mortgage business after he got out in 1994. Regulators soon put a stop to that.

George Hamilton and Lloyd Bridges both reached confidential settlements with investors who sued over the slick commercials.

Most real estate scams involve mortgages—an ideal breeding ground for fraud because they are so complex, and because of the sheer amount of money at stake.

The Federal Trade Commission has an entire section of its web site devoted to mortgage scams. Among the warning signs, the FTC says:

Beware of anyone who guarantees they can get you a loan or avoid foreclosure.

• Avoid anyone asking for an upfront fee.
• Don’t listen to offers to buy your house for cash for a price that is lower than similar homes in your neighborhood.

The FTC site doesn’t say anything about celebrity endorsements, and since the scandal and the big settlements, celebrities have become more careful about companies and products they shill for. Still, don’t be swayed by actors. They manipulate emotions for a living.

Beyond Their Means

The biggest scandal leading up to the 2008 financial crisis had quite a bit in common with the Obie/Diamond scam, and not just the fact that one of this scam’s central figures also has a permanent tan. This scam also involved lending to homeowners and selling the mortgages to investors.

California-based Countrywide Financial and its ever-bronzed founder Angelo Mozilo pioneered what came to be known as sub-prime mortgages—home loans to borrowers with low income and poor credit. But rather than risk lending money to a homeowner who might not be able to pay it back, Countrywide packaged those loans into securities sold to big investors who wanted to bet on the housing market.

When housing collapsed under all those risky loans made by Countrywide and many others, it nearly took the whole economy down with it. Mozilo was never charged with a crime, but settled with the SEC for $67.5 million. Bank of America, which took over Countrywide in 2008, agreed last year to pay nearly $17 billion in penalties.

Less discussed, though, are the thousands of people who were allowed to borrow from Countrywide even though they had no business going into that kind of debt. At the heart of the charges by the Justice Department and six states were claims Countrywide engaged in predatory lending—duping borrowers into taking out expensive loans they can’t afford.

The Mortgage Bankers Association has developed a Borrowers’ Bill of Rights to help you make sure you don’t get taken by an unscrupulous lender.

Among the provisions:

• You have a right to a clear explanation of the terms and conditions of the loan.
• You have the right to obtain credit counseling before the loan closes.
• You have the right to a fair and equitable resolution of any disputes.

The advice is equally important if you are considering refinancing your mortgage, which more and more homeowners are doing as interest rates fall.

For the Hauns of Arizona, an unscrupulous lender’s promise that they could achieve their dream of financial independence by refinancing turned into a nightmare that could haunt them the rest of their lives.

 It is little comfort that they were among hundreds of victims in the $125 million scam run by the self-proclaimed “King of Cash,” or that they are among countless people who get taken in real estate scams every year.

Learn more about the King of Cash and his $125 million real estate scam on the next ALL-NEW American Greed, Thursday at 10pm ET/PT.

By Scott Cohn | American Greed Special Correspondent | @ScottCohnTV

If you think self-proclaimed “Wolf of Wall Street” Jordan Belfort’s pump-and-dump scam is a colorful piece of stock market history that’s been addressed by regulatory reforms, look no further than an order just this week from the Securities and Exchange Commission. It’s proof the practices that made Belfort a legend among crooks are alive and well.

The order suspends trading in 128 so-called penny stocks, also known as microcaps, over-the-counter, or pink sheet securities—the same kinds of stocks that Belfort and his Stratton Oakmont cronies trafficked in. Ostensibly, they are shares of companies that are too small to be listed on a stock exchange. As a result, they are subject to less stringent standards than big corporations. The stocks sell for as little as a few cents a share.

Some penny stocks are legitimate. A small company, say a startup with an innovative product, could decide to sell microcap shares to the public as a way to raise money for expansion. Theoretically, an investor can buy a piece of the action for a small amount of money, and then make a killing if the company takes off. Say you buy 1,000 shares of Company X at 10 cents a share, and the price climbs to $5.00. Your $100 investment is now worth $5,000—a 4,900 percent increase!

Some investors find those kinds of returns hard to resist, which is exactly what scam artists are still counting on 20 years after Jordan Belfort’s penny stock scam came to an end.

Because microcap companies issue such a small number of shares, a crooked brokerage can accumulate enough to manipulate them Belfort-style—hyping the stock to unsuspecting investors in order to pump up the price, then dumping the rest until the stock becomes worthless and the investors who bought during the run-up are wiped out.

The new SEC order targets dozens of companies in 24 states and Canada that officials say could be fodder for future pump-and-dump schemes. All the stocks have legitimate-sounding names. They even have ticker symbols like their big-stock brethren. But the agency says these companies are essentially zombie stocks—dormant firms that a modern-day Belfort could seize, pump and dump.

And there are plenty more where these stocks came from. The SEC says since it began its latest crackdown on microcaps in 2012, it has suspended more than 800 of these so-called “shell” stocks, representing a whopping 8 percent of the over-the-counter market. And it’s not over yet.

“We are getting increasingly aggressive and adept at ridding the microcap marketplace of dormant shells within a year of the companies becoming inactive,” SEC Director of Enforcement Andrew Ceresney said in a statement.

Still, with more than 800 market manipulation cases investigated by the SEC last year alone, pump-and-dumps remain among the most common investor complaints. That’s troubling to those scammed by Jordan Belfort more than two decades ago.

Bob Shearin lost more than $100,000 at the hands of Stratton Oakmont.

“That firm seeded a lot of scammers,” Shearin tells American Greed. “The cockroaches left Stratton Oakmont and just filtered out throughout the industry, continuing to do harm.”

Tom Pokorny, who lost $800,000 and believes the scam also cost him his marriage, says the Hollywood treatment given to Belfort—and the fact that he spent just 22 months in prison—sends the wrong message to would be scammers.

“I think he should have been in jail longer,” Pokorny tells American Greed. “I mean, two years for wrecking thousands of people’s lives?  He went away for two years, that’s it.”

Experts generally urge investors to avoid microcap stocks because of the potential for fraud. But if you’re still interested in taking the plunge, the SEC offers an investor’s guide.

“Information is the investor’s best tool when it comes to investing wisely,” the guide begins. The trouble is that by their nature, microcap companies are required to report far less information about their operations than larger companies are. That makes it all the more important to monitor the information the small companies do provide.

All but the smallest public companies must file at least some reports with the SEC, and you can search the filings in the agency’s EDGAR database.  One of the most obvious red flags is when a company fails to file its SEC reports on time. If the company’s ticker symbol suddenly shows up with a fifth letter—“E”—at the end, that’s an indication the company has been cited for late filings. If the issue continues, the ticker symbol could vanish entirely and the stock could be halted, leaving you with a potentially worthless investment.

Another place to check is the Over the Counter Bulletin Board or OTCBB, one of the main sources of price information on microcap stocks. Operated by the Financial Industry Regulatory Authority or FINRA, the Bulletin Board also maintains a list—updated daily—of companies that have been added and deleted from the Bulletin Board, and the reasons why.

Remember, when it comes to stocks or any other investment, the higher the return, the greater the risk.

The Wolf of Wall Street may have been an entertaining movie, but Jordan Belfort’s real life victims are still dealing with the consequences. And 20 years later, there are plenty of would-be wolves waiting to pounce on you.

By Scott Cohn | “American Greed” Special Correspondent | @ScottCohnTV

If there was one thing Ingrid Robinson knew from six years of training to become a therapist, it was the value of channeling pain into something positive.

So when she suffered her own devastating loss—the death of her only daughter from a heroin overdose in 2006—she decided to build a residential and retail complex in Northern California, in memory of her daughter.

“I called it ‘Michelle’s Diamond,’ as a legacy for Michelle,” Robinson told “American Greed.”  “And I wanted people to know if they had asked, ‘Who was Michelle?’  She was the daughter of a mother who loved her very much,” said Robinson in a 2014 interview with CNBC’s “American Greed.”

Robinson purchased land in Marin County for $500,000, but she would need help financing the development. She found that help in Remington Financial Group, a Philadelphia-based lender that offered her $5 million in financing in exchange for a $10,000 fee upfront. Robinson had no experience in the commercial development business, but she took comfort in the fact that Remington’s credentials seemed impeccable. The company came highly recommended by the commercial real estate broker she was working with, and she had gone to what she thought were great lengths to check Remington out.

“I was doing everything I was supposed to do,” she said.

Sure enough, there was a spread in Forbes magazine that looked glowingly positive. And Remington was accredited by the Better Business Bureau. What could possibly go wrong?

In fact, Remington turned out to be a costly lesson about due diligence—the process of checking out a property you are thinking of buying or a company you are considering doing business with.  Ingrid Robinson and hundreds of other investors who thought they had done proper due diligence on Remington wound up broke. It turned out that the fees that she and the other investors paid went largely toward the lavish lifestyles of Remington founders Andrew Bogdanoff and Matthew McManus, both of whom are now in prison.

How did so many people miss what turned out to be a garden variety advance fee scam? How did all that due diligence fail? For one thing, Bogdanoff, McManus and their cronies were very good at what they did.

“Some of the people that were scammed by Remington were attorneys, experienced attorneys,” said Robinson, who launched a crusade for justice for herself and other Remington victims. “Remington was slick. There was no question they were very slick.”

That Forbes spread turned out to be a slickly disguised paid advertisement. And the Better Business Bureau accreditation represented a mere snapshot that the company continued to milk long after the BBB soured on the company and started issuing negative ratings.

Remington even found a way to trick internet search engines, according the federal grand jury indictment of the company’s founders. In 2010, with fraud complaints already piling up, Remington announced a new anti-fraud policy on its web site, and falsely claimed it had alerted federal and local authorities about a suspected e-mail scam. The result: if you Googled “Remington Financial” and “fraud” in 2010, the first thing you would see was Remington’s supposed efforts to combat fraud, instead of all the fraud complaints against the company.

Is it possible for fraudsters to be that good—covering their tracks so expertly that you can’t avoid being taken?

In a word, no. But due diligence is a complex undertaking, and there is no room for short cuts.

A simple Google search is clearly not enough; Remington proved that even the most powerful search engines can be fooled.

And while the Better Business Bureau has been looking out for consumers for more than a century, it too has its limits. Remington’s status with the organization was far more complicated than the company let on, according to BBB national spokeswoman Katherine Hutt.

She confirms the company applied for “Accredited” status in 2006, meaning the company agreed to uphold the BBB Code of Business Practices for sales, advertising, and customer service.  With relatively few customer complaints to that point, the accreditation was granted. But Hutt says it soon became clear Remington had lied on its application, failing to mention a government action against the company in California a few years earlier. By 2008 the accreditation was revoked.

“Remington Financial is actually a good example of how BBB’s self-regulatory process works,” Hutt told “American Greed.” “The BBB investigated the company and discovered a number of falsehoods. The BBB Business Review for Remington reported an F rating from 2008 until the company closed.”

But the move came too late for Ingrid Robinson, who had applied for funding with Remington in 2007 while the company’s BBB status was still in flux.

In part because of situations like that, the organization urges consumers not to rely solely on BBB reviews when conducting due diligence.

“BBB reports on information we know,” Hutt said. “Consumers can help us out by filing complaints when they have a problem with a business.”

But it can take time before a pattern of complaints translates to a negative rating.

“As much as possible, we try to work with businesses to get them to improve,” Hutt said. “When they do not, we publish alerts so consumers are warned.”

So where else should you be looking when you do your homework?

First, find the government agencies that regulate the business you are considering working with, and check for any complaints or regulatory actions. A good place to start is your state’s attorney general, as well as the attorney general of the state where the business is based. You can find listings for all 56 state and territorial attorneys general through the National Association of Attorneys General (NAAG).

In the case of lending institutions, check with the state’s banking regulator (you can find a list through the Conference of State Banking Supervisors (CSBS)), or the Federal Deposit Insurance Corporation (FDIC).

Remington was able to evade those checks because it was a non-traditional lender. Borrowers without track records—like Ingrid Robinson—figured it was their only choice.

“I knew that traditional banks would never lend,” Robinson told “American Greed.” “I didn’t have the assets to support that kind of loan that I would need, and I didn’t have the experience.”

In fact, she may have been operating under a common misconception among entrepreneurs, according to the U.S. Small Business Administration, which offers a host of tips and programs to help small businesses get started and secure financing. The SBA specializes in linking startup business owners with traditional financing they may not be able to get on their own.

Even after you have completed all those steps, you are not done yet.

Before you sign a loan commitment, experts say, have a qualified attorney look over the agreement. Don’t sign on the dotted line until you and your attorney are satisfied.

Finally, and perhaps most important of all, beware of any lender—or any other business for that matter—demanding to be paid ahead of time. While there are instances where certain advance fees are proper, experts say in general they are a giant red flag—one that Remington investors missed again and again.

Doing due diligence can do wonders protecting you and your money. But you have to do your due diligence right.

By Scott Cohn | American Greed Special Correspondent | @ScottCohnTV

It is an unwritten rule in the music industry: you’ve got to fake it to make it. In other words, talent alone is usually not enough to break through in a crowded, competitive field. You also have to walk the walk…rock the style…make it look as though your success is inevitable, at least until the rest of the industry buys it.

“As much as I don’t like the rule, it works,” rapper Tony Hayes—known as “4-Ize”—tells American Greed.

Tony Hayes thinks Michael Steven Banuelos is going to help him become a famous rapper. It was all fake though and Mr. Banuelos isn’t what he seems. | Source: CNBC

That helps explain how he got hooked up with a purported music promoter named Michael “Ferrari Mike” Banuelos. And while the nickname “Ferrari Mike” might be a dead giveaway in a lot of other industries, it seemed like just the ticket in Hayes’ quest for a solo hip hop career following years playing  backup for the likes of his friend Chris Bridges, also known as Ludacris. In the music industry, flash, dazzle and bling can go a long way. Ferrari Mike had all of that and then some.

He claimed to have relationships with some of the biggest players on the hip hop scene. That helped him raise thousands of dollars from investors, supposedly to promote 4-Ize’s career. But it eventually became clear that all Banuelos was really interested in promoting was himself.

Michael Steven Banuelos posing with models for the album release party for 4IZE. | Source: Tony Hayes AKA 4IZE

“We were faking it too hard, as opposed to making it,” Hayes recalls. “I had an album release party for an album that nobody heard.  I had an ice sculptor. I had, like, 20 models.”

What he didn’t have was the business plan Banuelos had promised to provide.

That is not to say Banuelos was not hard at work. Big events like the 4-Ize album party helped Ferrari Mike develop his carefully crafted image as a hip hop mogul. That attracted investors, as well as people like Titus Tynan of Hawaii.

In 2008, Tynan was looking to promote his 17-year-old son’s hip hop duo Hi-Life. The group had won music contests in Hawaii, gaining enough acclaim to catch the attention of Ferrari Mike Banuelos thousands of miles away in Atlanta.

“He wanted to schedule a time for us to fly up to meet with him and meet with some of the music producers that could evaluate them further,” Tynan recalls. “So me and the, the guys, you know, we said okay this is our big chance. We’re going to go to Atlanta.”

The bait was set.

Banuelos would personally pick up the group at the airport and drive them to his home, where they were suitably impressed.

“Everything that we were told, it was kind of like what was coming true,” Titus Tynan recalls.

His son could barely believe his eyes.

“I did look for the Ferrari and I saw one,” Kaleo John Tynan recalls. “I saw an Aston Martin too.”

Ferrari Mike had them in his trap. Now it was time to pounce.

“He said that in order to make sure that you guys are actually a part of this you know there’s going to be some investment on your behalf,” Titus Tynan says.

First, they had to cough up $12,000 for a demo tape, which the group returned to Atlanta to record. But that was just the start.

With the demo tape recorded, Banuelos was able to reel the group in with some big news: legendary hip hop label Def Jam wanted to sign the group for $23 million, plus another $1 million for a 56-date concert tour with none other than Ludacris.

“Me and my partner was talking about it like this could be the moment right here, you know,” Kaleo John Tynan says.

There was just one little catch. Banuelos would need more money, $268,000 to be precise, to get the deal off the ground.

“You know that’s everything I got,” Titus Tynan recalls. But he rounded up the money anyway.

“I was behind the dream of my son and so we said we were going to go all in and, and started asking for support from you know, friends and family that you know weren’t rich. I mean this was money they couldn’t lose.”

But Titus did lose—his life’s savings, and all his friends’ and family’s investments. There was no concert tour, and there was no record deal.

Titus tries every month to return at least some of the money he raised from his friends and family. But far worse than the financial loss, he says, is what the experience did to Kaleo and his partner.

“That was their dream and I could see their eyes. They had this shine in their eyes and I saw it dull. And that just killed me,” Titus says.

As for Ferrari Mike, he’s now Federal Prison Mike, serving a six-and-a-half year sentence after pleading guilty to a single count of wire fraud totaling some $2.5 million.

Unfortunately, stories like this are all too common in a business where dreams of fame and fortune can cloud even the most level-headed musician’s best judgment—or that of their parents.

Many of the scams involve talent agencies—prompting the state legislature in California, where many agencies are based, to adopt the Krekorian Talent Scam Prevention Act in 2009. The law makes it illegal to charge an upfront fee for representation, mandates specific terms in the contract between artist and agent, and gives the artist ten days to cancel a contract after it has been signed. But alleged scams still keep popping up.

In January, Los Angeles City Attorney Mike Feuer announced criminal charges against 53-year-old Debra Baum, who allegedly was charging a 19-year-old woman who had been singing in a hair salon $10,000 a month to handle her vocal career. The singer allegedly paid Baum $70,000 in management fees, plus thousands more for services like vocal training, before finally breaking off the contract.

Baum, who declined to comment when contacted by American Greed, has pleaded not guilty. She could face up to two years in jail and $20,000 in fines if convicted. No trial date has been set.

In a statement in January, Feuer said the case is a cautionary tale.

“Thousands come to Hollywood every year to pursue their dreams in the entertainment industry,” Feuer said. “We need to protect them from those who would dash those dreams by taking unfair advantage of them.”

But not every state has such strict protections for budding entertainers, so Feuer offers some warning signs if someone is promising to make you a star. According to the list, that person might be scamming you if he or she:

• Requires you to pay upfront for representation. “Legitimate agents and managers don’t charge for services. They are paid on a commission basis only.”
• Charges you for an audition.
• Approaches you in a public place like a shopping mall, or advertises on radio, TV or sites like craigslist.
• Promises special connections, and “name drops” famous actors or musicians he or she has worked with.

Also, beware of agents who require you to use specific third parties for head shots, demo tapes, and other services. Agents can make recommendations, but the final decision should be up to you with no obligation.

If you are a parent hoping to help your child break into show business, do your homework with the help of the BizParentz Foundation, a non-profit coalition of parents, government and industry organizations.  (Be sure to spell the name correctly—ending with a “z”—or you could find yourself at a web site promoting—you guessed it—kids’ talent agencies.)

It may be a necessary evil in the entertainment business that you have to “fake it to make it,” but beware—there are plenty of people out there who are faking it just to scam you.

Learn more about Ferrari Mike and his multi-million dollar music scam on an all new American Greed, Friday July 17 at 10pm ET/PT on CNBC Prime.

By Scott Cohn | American Greed Special Correspondent | @ScottCohnTV

Wine is more than just a drink. It is a way of life. And collecting fine wines is more than just a hobby for many. The world of wine is populated by people of discerning palates. It affords an endless journey to some of the most glorious wine producing regions on earth, and through centuries if not millennia of winemaking history. It can also be lucrative for the most astute collectors, with the most expensive vintages selling for tens of thousands of dollars per bottle.

Think you have what it takes to make it in the world of wine? Wine expert Maureen Downey has some words of warning.

“Anybody who has purchased fine and rare wine at auctions or through some retailers in the United States and even in Europe, especially in Asia, in the last 15 years probably has fakes,” she tells American Greed.

That’s right. Even the best collectors get duped. Counterfeit wine is gushing through the system.

“Anybody who is buying a lot of very expensive wines that doesn’t think it’s a problem has their head in the sand,” she says.

Downey, founder of Chai Consulting, a San Francisco-based wine collector services firm, helped bring down one of the most prolific wine counterfeiters of all time. Rudy Kurniawan, 38, who had become a sensation in the wine-collecting world while still in his 20s, is now serving a ten-year prison sentence on two fraud counts. Kurniawan, who came to the U.S. from Indonesia, passed off vast quantities of relatively worthless wine—much of which he bottled in batches in his own kitchen—as rare vintages worth millions. And he got away with it for years before his arrest in 2012.

Like all of the great con men, Kurniawan succeeded by making his victims want to believe.

“Rudy Kurniawan was definitely motivated by greed but there are others that profited from this, too,” says Jason Hernandez, the former Assistant U.S. Attorney in New York who prosecuted the case. “People were bidding. They were buying. The economy was good.  So it was really the right time for Rudy Kurniawan to come onto the scene because people weren’t asking too many questions.”

It also helped that Kurniawan was good at what he did.

“Rudy did a lot of things well,” Downey tells American Greed.  “Rudy used a lot of very good materials.  He was careful in making sure that many of the details that we find on regular labels and authentic labels are accurate.  There, are a lot of things that he did right. Fortunately, there are a lot of things that he did wrong.”

And those fatal flaws in Kurniawan’s work provide some useful tips for amateur and professional collectors alike.

Downey, a sought-after advisor and speaker who claims to have developed the world’s largest database on counterfeit wine, wrote in 2012 about some of the telltale signs of a fake. Now, after helping to put Rudy Kurniawan behind bars, she is sharing more secrets exclusively with American Greed.

Truth in Labeling

The first thing wine detectives look at is the label—not just what it says, but how it looks. A label that appears to be new on a wine that is purported to be old is a dead giveaway, experts say. Even the paper itself can tip off an expert to a possible fake, since paper produced at particular times will react to light differently.

Downey says Rudy Kurniawan went to great lengths to make the labels on his counterfeit bottles look the age that the wine was supposed to be.

“One of the things that he actually did was, I believe, he toasted the labels in the oven, because I can clearly see, when I look at all of these labels, overlay marks and you can see where the ink may have seeped up on the back of a particular label,” Downey says.  “But he also did old fashioned things like tea, tobacco, dirt.”

But one of Kurniawan’s fatal mistakes was not matching the aging on the label with the aging on the bottle itself. She showed how a stain on one Kurniawan bottle somehow did not continue onto that bottle’s label.

“So he applied stains to try to make things look aged, but when you actually look at it closely or you look at it under magnification or when you look at it with other tools like blue lights or flashlights, they don’t make sense,” she explained.

Time Capsule

Experts also look closely at the capsule—the material that covers the top of the bottle and the cork. Again, experts look to make certain the capsule is age-appropriate, including checking to see what it is made of. An aluminum capsule on a wine supposedly bottled in the 1940s—when tin was the norm—is a sure sign of fraud. But even the untrained eye can spot other capsule issues.

Check to see how the capsule is applied to the bottle. If the edges don’t line up—as was often the case on Kurniawan’s bottles—it could be a warning sign.

“What he often did, what counterfeiters often do, is they reuse capsules which causes this this folding which is why they end up having to glue them on.  And you can see here this should be perfectly aligned, but it’s not aligned at all,” Downey said.

Put a Cork In It

The natural properties of cork, including its ability to expand and form a perfect seal in the mouth of a wine bottle, have made it an integral part of wine bottling for centuries. So it is somewhat surprising that fraudsters tend to overlook key details in their corks when counterfeiting a bottle of wine.

Downey says a common wine scam is to take an authentic bottle of wine, enjoy the contents, then refill it with something else and put a new cork in it.

“Corks always have a stamp, the same way that these have the stamp with the vintage,” she demonstrated. “This cork has absolutely no stamp on it.  So that tells me that there’s no way that it actually came from this famous Chateau in France.”

Another scam—one Kurniawan was especially fond of—was to alter the stamp to change a wine’s vintage, as he did with a 1964 Lafite-Rothschild that he magically turned into a 1961 vintage.

“It’s important for Rudy to continue this scam to make sure that his wine tastes somewhat like it’s supposed to so, that would make sense. But a bottle of 1964 would only be worth $4 to $500.  By changing that to a ‘1’ and putting a 1961 label on it, he can now get up to $2,000 for this bottle,” Downey says.

In Vino Veritas

Of course, it all boils down to the wine itself, which experts scrutinize as well.

In wine there is truth, the old saying goes. There should also be some sediment. An older vintage that looks completely clear may not be what it purports to be.

If you are at the point where you are finally opening your wine—and it is one bottle and not part of a case—it may be too late and you may already have been scammed. Besides, tasting the wine may be one of the least reliable ways of determining if it is fake, because taste is so subjective.

Also, even Downey admits Rudy Kurniawan’s fakes were pretty good.

“I have tasted fakes that Rudy made, and some of them were very impressive,” she says.  He did have a good palate, he figured out how to make master blends; we actually have photographs of bottles with his formulas on them.  But in the end when you compare them side-by-side against the real deal, they stick out like a sore thumb.”

Still, in the world of wine, which includes some premium egos along with the premium vintages, Downey says many people don’t want to admit to falling for a fraud.

She says one of the best ways to combat fraud—and avoid being scammed—is to set pride aside and recognize the potential that you too could get taken.

“You know, if consumers would be wise enough to recognize that when a story is too good to be true, it is, that would be great,” she says.  “But, you know we’ve been warning people of that since time immortal.”

She says the rest of the wine industry has a role to play as well.

“I think that wine retailers, vendors, brokers need to take more of an aggressive step to be part of the solution instead of part of the problem.  And that doesn’t just mean paying lip service.  It means actually getting educated about the issues and making sure that what you’re selling is not counterfeit and it’s not stolen.”

But until then, if you’re a would-be wine collector, arm yourself with information, and don’t be afraid to ask an expert. That way, you may avoid pouring your money down the drain.

Learn more about how Rudy Kurniawan fooled some of the most sophisticated wine collectors in the world on an all-new American Greed, Friday July 24 at 10p ET/PT on CNBC Prime.

By Scott Cohn | American Greed Special Correspondent | @ScottCohnTV

What good is having lots and lots of money if you can’t show it off from time to time?

Fancy cars, opulent homes, maybe a mega-yacht—those are all nice. But there’s no better way to show you really have money to burn than a giant, over-the-top party. Celebrity entertainment, an iconic location, hundreds of your closest friends—yeah, that’ll do it.

That’s apparently what David Brooks was thinking when it came time to celebrate his daughter’s Bat Mitzvah in 2005. Nothing was too good for 13-year-old Elizabeth. So David rented out New York City’s famed Rainbow Room, and hired Aerosmith, Tom Petty, 50 Cent, The Eagles, and Kenny G.

How could Brooks possibly afford the rumored $10 million it cost to stage the so-called “Mitzvahpalooza”? Turned out he was running a massive fraud at his company that sold defective body armor to the U.S. Department of Defense. Today, Brooks is serving a 17-year prison sentence for conspiracy, fraud, and obstruction of justice.

David H. Brooks threw a lavish Bat Mitzvah party for his daughter at the Rainbow Room in New York. It is said to have cost as much as $10 million dollars.

He also joins a long list of corporate crooks whose hearty parties came back to haunt them big time.

Koz He Could

Perhaps the most infamous party of all is the 40^th birthday bash that then-Tyco Chairman Dennis Kozlowski staged for his wife in 2001. No less than the island of Sardinia would do for the Roman orgy-themed event, featuring women in togas, scantily clad male models, and an ice sculpture replica of Michelangelo’s David that “urinated” Stolichnaya vodka.

As American Greed reported in 2008, the party cost more than $2 million, including $250,000 for the evening’s main entertainment, singer Jimmy Buffett.

A videotape of the party became Exhibit A in Kozlowski’s 2005 criminal trial on charges he treated Tyco as his personal piggy bank. At least half the cost of the party came from company funds, prosecutors said. Kozlowski served eight years in the New York state prison system for grand larceny, and today lives a much more modest lifestyle.

Know When to Fold ‘Em

Billionaire Galleon Group hedge fund cofounder Raj Rajaratnam departs Manhattan Federal Court during his trial March 23, 2011 in New York City. Source: 2011 Getty Images

 Sri Lankan-born hedge fund mogul Raj Rajaratnam, the central figure in the largest hedge fund insider trading scandal in U.S. history, apparently had a thing for country music—Kenny Rogers, to be specific.

So in 2007, at the height of Rajaratnam’s success, he staged a giant Western-themed clambake at his $5 million estate in Greenwich, Connecticut. The headliner: none other than Kenny Rogers himself, who reportedly collected $4 million for a night’s work.

Rajaratnam’s favorite Kenny Rogers tune, appropriately enough, was “The Gambler,” which Rogers played at least twice, according to people in attendance. But true to form, Rajaratnam always wanted more. According to reports at the time, Rajaratnam requested the song a dozen times at the party, before Rogers, exasperated, folded ‘em and called it a night.

Rajaratnam would have done well to follow the advice in his favorite song about knowing when to hold ‘em, fold ‘em, etc. Federal authorities already had their eyes on him at the time of the party, but he kept on gambling, and within two years was under arrest for brazenly collecting and trading on illegal insider tips, mostly on tech stocks. He is serving an eleven-year federal prison sentence for securities fraud.

Hef of the Heartland

Tim Durham in his office. Source: Indianapolis Monthly

Leveraged buyout king Tim Durham longed to be the richest man in the world, but he also wanted to stay true to his Midwestern roots. So when he turned 45 in 2007, he decided to turn his Indiana home into the Playboy mansion, and himself into a modern-day Hugh Hefner.

For the so-called “Pajama Party,” he flew 25 gorgeous models from Los Angeles to Indianapolis, where Durham had them transported in Rolls Royces to his castle-like estate.

One of the models, Megan Hauserman, recalled for American Greed earlier this year how the locals in Indiana had never seen anything quite like it.

“Like, where did these girls come from,” she said.

Meanwhile, amid ice sculptures shaped like dollar signs, Durham was right where he wanted to be.

“He had a huge stack of hundred dollar bills in his pocket,” Hauserman recalls. “He was walking around in silk pajamas thinking he was Hugh Hefner with, like, a girl on each of his arms.”

But now Durham has been ordered to exchange his pajamas for prison garb, sentenced to 50 years for fraud and conspiracy in one of the biggest investment frauds in Indiana history.

Hip Hop Mayor

Kwame Kilpatrick. Source: NBC

The city of Detroit, which in 2013 became the largest municipality in U.S. history to go bankrupt, was already in rough shape in 2002. But you would never know from stories about the wild party Mayor Kwame Kilpatrick allegedly threw that year at the Manoogian Mansion—the mayor’s taxpayer-funded official residence.

While never conclusively proven, stories about the party fed the growing scandals surrounding Detroit’s so-called “hip hop mayor,” and things got even worse when two police officers who had been looking into the party alleged in court that they were fired in retaliation.

Former City Council member Sheila Cockrel recalled for American Greed how scandalous the party rumors were at the time.

 “The Manoogian Mansion is not a party house. What are you guys doing?”

 There were strippers, the stories went, and calls to police and paramedics after Kilpatrick’s wife supposedly assaulted one of the women who had been giving the mayor a lap dance.

The officers were awarded $8 million in a case that would begin the unraveling of what federal authorities claimed was a criminal enterprise run by Kilpatrick out of city hall.

Kilpatrick, once considered a rising Democratic star, is now serving a 28-year prison sentence for fraud, extortion and racketeering—allegations that might never have come to light were it not for one wild party.

And that’s the thing about these swindlers’ soirees. From the Playboy mansion on the prairie to the Mitzvahpalooza in Manhattan, it always seems like fun at the time…until someone winds up in prison.

Learn more about how David Brooks’ $10 million Bat Mitzvah party helped tip off the feds on an ALL-NEW American Greed, July 31 at 10pm ET/PT on CNBC Prime.

By Scott Cohn | American Greed Special Correspondent | @ScottCohnTV

What would possess a smart, wealthy, successful business executive to lie and steal money they don’t really need from people who do? If you said greed, you only have part of the equation according to Terry Leap, a University of Tennessee—Knoxville management professor who has spent some three decades studying deviant behavior in business.

The other factor frequently found in some of the most egregious frauds: “narcissistic personality disorder,” or that close cousin of greed: ego.

“Narcissistic people have a high sense of entitlement and an abundance of egocentric, ‘the world revolves around me,’ and egotistical, ‘I’m better than anyone else’ behaviors,” Leap tells CNBC. “They are shameless self-promoters who are arrogant, haughty, and oblivious to the harm they cause others.”

Leap says a hallmark of narcissistic personality disorder is what he calls “a strong sense of entitlement.”

“When they see something they like and want, such as the hard earned money of fund investors…they believe they are entitled to take it, regardless of the damage they cause.”

In the annals of modern-day white-collar crime, few people have had a more powerful combination of greed and ego than Sky Capital founder Ross Mandell.

Even after his 2009 indictment for running a $140 million investment scam, Mandell refused to be humbled.

“Conventional wisdom for people in my situation is to lay low, get small, lawyer up,” he said at the time.

Ross Mandell

But not Ross Mandell. The statement is part of a video to pitch a new reality show he hoped to produce, chronicling his fight with the feds to stay out of prison. The working title: “Facing Life.”

“My name is Ross Mandell and I have the perfect life. I’ve worked on Wall Street for twenty-five years. I’ve made millions of dollars. I have a gorgeous wife and two amazing little girls,” Mandell confidently declares in his gravelly, Long Island-accented voice.

“I’ve just got one small problem. I’ve been indicted by the United States government for conspiracy and securities fraud and I’m facing 25 years in prison.”

The reality show pitch promised an inside look at Mandell’s real-life drama. He also envisioned the show as a vehicle to help clear his name.

“We’re prepared to reveal all. Let the public make up its own mind. Whatever the outcome,” he says in the video.

The series never did get made, and today Ross Mandell is serving a 12-year prison sentence for fraud and conspiracy. But the fact that he believed he could make a TV show out of something most people would consider the most humbling experience of a lifetime is a prime example of Ross Mandell’s massively inflated self image. It is a trait he apparently possessed nearly all his life, according to people who grew up with him on Long Island.

“Ross was a very interesting character. He was very aggressive. He was very loud. He wanted to be the center of attention,” childhood friend Norman Chess tells American Greed.

Mandell’s business career was a reflection of that.

Created at the end of the technology bubble in 2001, Mandell’s Sky Capital was supposedly an investment vehicle to take promising new companies public. But in 2011, a federal jury agreed with prosecutors that the real purpose of the firm was to enrich Mandell and his cronies. After the tech bubble burst and the market for IPOs dried up, Mandell instructed his brokers to lie to customers to keep the money rolling in.

Yet even the jury verdict wasn’t enough to curb Mandell’s delusions.

His plans for a reality show dashed, Mandell nonetheless started producing motivational videos while his appeals played out.

“I know what you’re thinking. Man, that dude looks handsome today,” Mandell says to the camera in a video called “Dress for Success.”

Today, he has traded the suit, power tie and the sunglasses he wears in the video for prison khaki, growing old in a federal correctional system that houses plenty of other ego-driven crooks.

‘My ego was too big’

One of the few corporate crooks to actually admit the role of ego in his crimes is Russell Wasendorf, the founder of Peregrine Financial Group, a defunct Iowa-based commodity brokerage. His $200 million scam is detailed in a 2014 American Greed episode, “The Falcon and the Con Man.”

The admission comes in a suicide note written by Wasendorf in 2012. His attempt to take his own life as regulators were moving in failed. But the note offers a frightening look inside Wasendorf’s twisted mind, and into the psyche of a narcissist.

“When a narcissist is backed into a corner,” Leap says, “the wheels usually fall off. Their egos are extremely fragile.”

Wasendorf explains in the note how in 1993 the firm did not have enough capital to meet regulatory requirements.

“I had no access to additional capital and I was forced into a difficult decision: should I go out of business or cheat?” he writes. “I guess my ego was too big to admit failure. So I cheated. I falsified the very core of the financial documents of PFG, the bank statements.”

For nearly 20 years, Wasendorf created phony bank statements, sending them to a post office box that he controlled, then presenting them to regulators as proof that his firm was financially sound. But all the while, he was stealing millions of dollars in customer funds.

Today, Wasendorf is serving a 50-year prison sentence after pleading guilty to four felony counts including fraud, larceny, and embezzlement.

Under a plan recently approved by a federal judge, PFG customers will receive less than 14 cents for every dollar they invested, the rest of their money consumed by Russell Wasendorf’s massive ego.

The Dark Knight

Robert Allen Stanford brought a Texas-sized ego to one of the largest financial frauds of all time. The $7 billion global Ponzi scheme, profiled in a 2012 episode of American Greed, fittingly involved the firm that bore the fraudster’s name: Stanford Financial Group.

Born in rural Mexia, Texas, where his grandfather ran a local insurance business, Allen Stanford set out to prove he was bigger than all that. He ran a failed bodybuilding gym in the 80s, then enjoyed some modest success investing in distressed Texas real estate during the oil shock. Eventually, he found his fortune in offshore banking in the Caribbean.

He co-opted the regulatory system in the island nation of Antigua and Barbuda, and launched Stanford International Bank, which sold certificates of deposit around the world.

Stanford himself became a key selling point for the CDs. He portrayed himself as an international man of mystery, nurturing rumors—never proven—that he was an operative for the CIA. He falsely claimed he was related to Stanford University founder Leland Stanford, until the University sued to make him stop. And he created a $20 million international cricket tournament—funded with his investors’ money—with dreams of bringing the high-brow sport to the masses.

As his fortune grew, Stanford convinced the Antiguan government to award him a knighthood, which ‘Sir’ Allen Stanford would falsely claim was bestowed upon him by the Queen of England.

It all collapsed during the depths of the financial crisis in 2009, when the Securities and Exchange Commission alleged that the CDs were not backed by the sound investments Stanford claimed, but rather were used to fund his lavish lifestyle.

Today, Stanford is serving a 110-year federal prison sentence, a federal appeals panel recently upholding his 2012 conviction on 13 criminal counts.

Somewhere along the way, the Antiguan government stripped Stanford of his knighthood. Cold comfort to his 28,000 investors—many of them retirees—who have lost nearly everything.

Mother of All Scams

The most notorious fraud of all time, Bernie Madoff’s $65 billion swindle, was also supercharged by ego.

In his final statement to the court prior to his 2009 sentencing for the giant Ponzi scheme, Madoff claimed he started the fraud to cover a rough patch in the markets in the 1990s.

“I refused to accept the fact, could not accept the fact, that for once in my life I failed,” he said.

But while he famously apologized to his victims that day—“I am sorry. I know that doesn’t help you.”—most of the statement was about Madoff, and all he was feeling as he prepared to head to prison for the rest of his life. The nearly 600-word statement used the words “I” or “me” more than 40 times.

In multiple e-mails from prison to CNBC since then, Madoff has claimed he helped authorities recover billions of dollars for investors by pressuring those he claims were “complicit” in the scam, including large investors and big banks. Federal prosecutors and a court-appointed trustee deny that Madoff has been of any assistance. In his most recent e-mail on October 28, Madoff claims his clients earned more than 4 percent per year on their investments, even though he has previously admitted fabricating investment returns for years.

Professor Leap says Madoff is a prime example of what he calls “major league offenders.”

“These guys had way more money than they could ever hope to spend, yet they seem to get a perverse pleasure out of living on the edge and stealing even more money, while getting a rush from outsmarting shareholders, prospective investors, employees, and even the FBI,” he says.

Ego Proofing

How do you spot the narcissist in your portfolio? Leap suggests looking at the types of narcissism we all encounter in daily life—the person who displays excessive wealth, talks but doesn’t listen, or is constantly grabbing the center of attention.

“Most narcissists are annoying, but they are not dangerous,” Leap says. But that may not be the case when you are considering giving a narcissist access to your money.

While many investment firms bear the name of their founder and the vast majority are honest, a firm in which the founder is the pitch man (or woman) deserves some extra scrutiny. That’s especially true if those pitches promise great wealth or above-market returns.

You should also be conscious of your own ego when making investment decisions. Admitting failure is never easy, but sometimes it makes the most sense to cut your losses and move on. Don’t let cousins ego and greed get the better of you.

Learn more about Ross Mandell and the ego that just wouldn’t quit, on an ALL NEW American Greed, Friday November 6 at 10pm ET/PT on CNBC Prime.

By Scott Cohn | American Greed Special Correspondent | @ScottCohnTV

Absolute power corrupts absolutely. But for an American politician looking to make some money, even a little power will do quite nicely.

The history of American politics is lined with public officials lining their pockets.

To create a truly elite list of America’s most crooked politicians, we limited our search to financial scandals (if we added sex scandals, you’d be here all day). And because practically every public official has at some point battled allegations of corruption, our list—ranked by the money stolen in 2016 dollars—includes only proven or admitted misconduct.

Prepare to be outraged as you enter our Hall of Shame.

Source: Getty Images

#10

Ray Nagin

Scandal: New Orleans Shakedown (2004-2010)

Money: $500,000 / worth $600,000 today

He became the public face of a battered city after Hurricane Katrina hit New Orleans in 2005. But when the city recently marked the tenth anniversary of the storm, Ray Nagin was nowhere to be seen. That’s because the former mayor is serving a ten-year federal prison sentence for corruption before, during, and after Katrina. What his scam lacks in dollars compared to some of the other Great American frauds, it makes up for in audacity. At a time when his city needed help the most, Nagin used the disaster as a revenue source. He installed an associate as the city’s “chief technology officer,” gaining control over millions of dollars in no-bid city contracts for things like computer systems and crime cameras. And Nagin used his position as mayor to steer redevelopment business to a granite company he owned with his sons. Perhaps worst of all, he let his city down during its darkest hour.

Learn more about Ray Nagin’s “New Orleans Shakedown” on an ALL NEW American Greed—March 31 at 10p ET/PT on CNBC Prime.

A disaster can be a prime breeding ground for corrupt politicians. Some disasters, like hurricanes, are natural. Others, like the $160 billion savings and loan crisis in the 1980s, are manmade. Taking advantage of that disaster were five politicians, but they’re almost universally referred to as one, and that’s next on our list.

Source: Getty Images

#9

The Keating Five

Scandal: Savings and Loan Crisis (1989)

Money: $1.3 million / worth $2.5 million today

Far from the warm and friendly institutions depicted in It’s a Wonderful Life, savings and loans by the 1980s had become cesspools of risky investments and corruption. None was worse than Charles Keating’s Lincoln Savings and Loan in California, which collapsed in 1989 leaving thousands of investors penniless. How did Keating get away with it for so long? Five U.S. senators intervened with regulators on his behalf in exchange for lavish campaign contributions. The Senate Ethics Committee issued a formal reprimand to California Democrat Alan Cranston, and criticized Democrats Dennis DeConcini of Arizona and Donald Riegle of Michigan for acting improperly. Democrat John Glenn of Ohio and Republican John McCain of Arizona were cleared of wrongdoing but the committee formally criticized them for poor judgment. McCain, the only member of the Keating Five still in office, has said the affair taught him a painful lesson about conflicts of interest.

The Keating Five were all Senators. But the other side of the capitol—the House of Representatives—is hardly free of crooks.

Source: Getty Images

#8

Randy “Duke” Cunningham

Scandal: Bribery and Corruption (2004-2005)

Money: $2.4 million / worth $3 million today

A decorated Navy flying ace with dashing good looks and the nickname “Duke,” it seemed like Randall Cunningham of California had it all when he came to Congress in 1991. But like so many crooked politicians, it wasn’t enough. As a member of the House Defense Appropriations Subcommittee, the Republican congressman had a line on some of the most lucrative government contracts, and he used that to his advantage—big time. There was the defense contractor who purchased Cunningham’s San Diego home for nearly twice its market value, then allowed him to live rent-free on a yacht. There were other favors, cash payments, a Rolls Royce, and more. In 2005, Cunningham pleaded guilty to accepting $2.4 million in bribes, making him arguably the most crooked congressman in history. He served an eight-year prison sentence and today reportedly lives in Arkansas.

While Washington may be teeming with crooks, some of the wildest scams occur in state capitals. Our next two crooked politicians hail from states that have raised graft to practically an art form.

Source: Getty Images

#7

Edwin W. Edwards

Scandal: Racketeering and Extortion (1991-1997)

Money: $3 million / worth $4.6 million today

The four-time governor of Louisiana once famously boasted that the only way he could lose an upcoming election was “if I’m caught in bed with either a dead girl or a live boy.” He seemed equally invincible in the courts, beating 24 different corruption cases against him since the early days of his career in the 1970s. But on the 25^th case, his luck ran out. In 1998, a federal grand jury indicted him for a scheme to extort millions of dollars in payments for casino licenses in the state. Edwards was convicted on 17 counts and spent more than 8 years in prison. But he wasn’t done with public life just yet. In 2014, at age 87, he tried to stage one more political comeback. With his 35-year-old wife Trina and their one-year-old son by his side, Edwards announced he was running for Congress. It wasn’t meant to be however, and with his loss, the most colorful career in Louisiana politics came to an end. Or did it?

#6

Paul Powell

Scandal: Shoebox Scandal (1965-1970)

Money: $800,000 / worth $4.8 million today

No list of crooked politicians would be complete without a visit to Illinois, where four governors since 1968 wound up in prison. But perhaps the most brazenly corrupt Illinois public official was Secretary of State Paul Powell, once quoted as saying, “There’s only one thing worse than a defeated politician, and that’s a broke one.” For Powell, those were words to live by. Illinois residents applying for driver’s licenses in the 1960s would make their checks payable not to the state, but to “Secretary of State Paul Powell.” Naturally, Powell took that literally. Add in a healthy dose of Illinois patronage, and Paul Powell was set for life. When he died of a heart attack in 1970, investigators found $800,000 in cash in his Springfield hotel room, much of it stuffed in shoeboxes. A few months later, Illinois Senator Adlai Stevenson III famously quipped, “Paul Powell left behind some pretty big shoeboxes to fill.”

While people in Illinois may have come to expect that their elected officials may turn out to be crooks, voters in many other parts of the country still have high expectations for the people they elect. That can make a fall from grace all the more stunning. Next on our list is a case in point.

Source: Getty Images

#5

Kwame M. Kilpatrick

Scandal: Detroit’s Crime Boss Mayor (2002-2008)

Money: $4.5 million / worth $5 million today

Considered a rising Democratic star and celebrated as the “Hip Hop Mayor” after he took office as Detroit’s 68^th mayor in 2002, Kwame Kilpatrick quickly set about building a criminal enterprise in City Hall. Some of his antics may have even helped set the stage for Detroit’s historic bankruptcy in 2013. Profiled in a 2014 episode of American Greed, Kilpatrick was dogged by scandal almost from the start, from rumors of a wild party at his taxpayer-funded residence, to hundreds of thousands of dollars in unexplained deposits to his personal bank account. In 2013, a federal jury in Detroit convicted Kilpatrick on 24 counts in what prosecutors called an “astonishing” scheme to establish a “pay-for-play” system, fleecing city contractors and taxpayers for his personal gain. Kilpatrick, who is serving a 28-year prison sentence, has appealed his case to the Supreme Court.

The next three crooked politicians on our list were all presidents. After all, the highest office in the land can offer some pretty high returns for a president willing to go that route.

Source: Getty Images

#4

Warren G. Harding

Scandal: Teapot Dome (1921)

Money: $400,000 / worth $5.3 million today

Warren Harding was never personally implicated, and most of the details emerged after his death. But Teapot Dome forever sullied the reputation of America’s 29^th president. Widely considered the granddaddy of American political scandals, the scheme was fairly tame and straightforward by today’s standards. The real villain is Harding’s Interior Secretary Albert Fall, a member of the so-called “Ohio Gang” of confidantes Harding brought with him to Washington. Accused of accepting nearly $400,000 in bribes in exchange for oil leases in Wyoming, Fall became the first former cabinet member in history to be sent to prison for crimes committed while in office.

Source: Getty Images

#3

Richard M. Nixon

Scandal: Watergate (1972-1974)

Money: $500,000 to $1 million / worth $2.8 million to $5.6 million today

Legend has it that when Washington Post reporters Bob Woodward and Carl Bernstein were investigating the burglary at Democratic National Committee headquarters in Washington’s Watergate complex, the confidential source known as “Deep Throat” told them to “follow the money.” Deep Throat—who turned out to be Associate FBI Director Mark Felt—never actually uttered those words. But Watergate, the only scandal to topple a U.S. president, definitely had money at its heart—along with a dizzying array of dirty tricks. To cover up the break-in, President Nixon funneled as much as half a million dollars in campaign funds to the Watergate burglars. And he is heard on one of the infamous White House tapes barely flinching over the prospect of raising another million in hush money. “You could get it in cash,” he says. Nixon resigned in 1974, days after the House Judiciary Committee approved the first of three articles of impeachment. Among other things, it accused him of authorizing payment of “substantial sums of money” to silence witnesses.

Source: Getty Images

#2

Ulysses S. Grant

Scandal: Whiskey Ring (1871-1875)

Money: $3 million / worth $63.7 million today

Corruption was so rampant in the 18^th U.S. president’s administration that it came to be known as “Grantism.” That means there are plenty of Grant scandals to choose from. But the most notorious one—and the one that came closest to the President himself—involved a scheme to siphon millions of dollars in whiskey tax revenues from the U.S. treasury. The conspiracy was vast, involving revenue agents, distillers, and politicians. The president was not directly involved—in fact he ordered the raids that eventually broke up the ring. But he conveniently waited until after his 1872 re-election to do so. He may also have lied to cover up the actions of his personal secretary, Orville Babcock, who was one of 350 people indicted in the scandal but was eventually acquitted, in part because the President personally vouched for him.

While the presidency can offer seemingly unlimited opportunities for the committed crook, the top name on our list proves once and for all that just like all politics, all fraud is local. In fact, when adjusted for inflation, no politician in American history—from presidents on down—has come even close to this one’s take. So without further ado, here is America’s most crooked politician.

Source: Getty Images

#1

William M. “Boss” Tweed

Scandal: Tammany Hall / The Tweed Ring (1869-1877)

Money: $6 million to $200 million / worth $129 million to $4.3 billion today

William Magear Tweed was a prodigious crook, elected to Congress before he turned 30. But the real money was at home in New York, where he would soon return to begin his climb to the top of the city’s powerful Democratic machine known as Tammany Hall. Boss Tweed became a wealthy man—and one of the city’s biggest land owners—thanks to some fairly basic scams, such as allowing overbilling by favored contractors, rampant patronage, and accepting plenty of well-placed bribes and kickbacks. But in one of the early triumphs of investigative reporting, a series of reports by the New York Times beginning in 1871 helped bring down the Tweed Ring. Tweed was eventually convicted on hundreds of criminal charges, and New York City successfully sued him for $6 million. But the money, believed to be a fraction of what he and his cronies actually stole, was long gone. He died in jail at age 55, secure in the knowledge that he stole more than any American public official before…or since.

Learn more about Ray Nagin’s “New Orleans Shakedown” on an ALL NEW American Greed—March 31 at 10p ET/PT on CNBC Prime.

By Scott Cohn | American Greed Special Correspondent | @ScottCohnTV

From fraudsters who fake their own deaths, to cowardly crooks who sneak away to offshore havens, to the guy who reportedly jumped out of an airplane with his loot, some white-collar criminals will go to amazing lengths to take the money and run.

On the next ALL NEW American Greed—Thursday, April 7, 10pm ET/PT—meet a California surfer dude whose path to freedom turned deadly. He joins this long list of vanishing villains.

Aviv Mizrahi and Aryeh Greenes

Vanished: 2014

Loot: $33 million

Aviv Mizrahi ran a California-based chain of electronics wholesalers. Aryeh Greenes—a rabbi who allegedly did not practice what he preached—was the money man. After their indictment in an alleged $33 million bank fraud, the pair may have fled to Israel, according to the FBI.

Joseph Wayne McCool

Vanished: 2006

Loot: $10 million

Joe McCool’s alleged Ponzi scheme was decidedly uncool according to authorities, who claim he and two associates used their Arizona-based company, The Brixon Group, to scam investors out of $10 million. The FBI says Joe may be cooling his jets in the Philippines.

Eric Bartoli

Vanished: 2003 | Captured: 2013

Loot: $65 million

Eric Bartoli allegedly scammed hundreds of investors—many of them retirees—by selling bogus certificates of deposit through his Ohio-based firm. Authorities caught up with him in Peru soon after he was featured on American Greed: The Fugitives. He is awaiting trial on ten felony counts, and has pleaded not guilty.

Spiro Edward Germenis

Vanished: 2006

Loot: $8 million

Authorities allege that at the height of the housing bubble, Germenis ran a Ponzi scheme through his Long Island, NY-based group of hedge funds. Many investors lost their life’s savings. The FBI says Germenis told his family he was going to a baseball game, but instead he boarded a flight to Greece and hasn’t been seen since.

Dan “D.B.” Cooper

Vanished: 1971

Loot: $200,000

If he survived it, D.B. Cooper pulled off a vanishing act for the ages. On Thanksgiving Eve, he hijacked a flight from Portland, Oregon to Seattle, and demanded $200,000 and four parachutes, which he received. Once back in the air, he parachuted from the plane loot in hand, and was never seen again.

Marcus Schrenker

Vanished: 2009 | Captured: 2009

Loot: $1 million

Perhaps he was trying to emulate D.B. Cooper when he parachuted from his private plane en route to Florida, but Indiana financial advisor Marcus Schrenker only managed to vanish for a couple of days. As told in a 2010 episode of American Greed, Schrenker eventually admitted trying to fake his own death in order to evade investors and investigators. He served a 4-year prison sentence.

 Craig John Oliver

Vanished: 2005

Loot: $2.5 million

If you’ve ever had trouble with a contractor, at least be glad you weren’t a customer of Craig John Oliver, who ran a fraudulent home renovation business in northern Virginia. He vanished just weeks before his sentencing for the scam, which targeted dozens of homeowners in the DC suburbs. If caught, he’ll have a new home for the next 20 years.

Victor and Natalia Wolf

Vanished: 2006

Loot: $20 million

Want to make money in real estate? Don’t just sell a property once. Sell it multiple times. Authorities say that was but one facet of a massive fraud by this husband and wife team, who ran some two dozen companies in Florida. Believed to be German citizens, the Wolfs may have fled to Russia as the feds were closing in.

John Anthony Porcaro

Vanished: 2003

Loot: $5 million

Currency speculation was a big deal in the late 1990s, so Porcaro and his associates set up a pair of Florida telemarketing companies—Sheffield Group and Trump Financial (no relation to the eventual presidential candidate)—allegedly promising 700 percent returns that never materialized. After his indictment in 2003, Porcaro didn’t materialize either, and he remains at large.

Jason Derek Brown

Vanished: 2004

Loot: $56,000

A Mormon missionary-turned California surfer dude, Jason Brown lived the high life—even though no one was ever quite sure how he made his money. Then in 2004, he allegedly shot and killed an armored car guard near Phoenix, took the money and rode away on a mountain bike. He is now on the FBI’s Ten Most Wanted List.

Learn more about alleged “Surfer Slayer” Jason Derek Brown on an ALL NEW American Greed, Thursday April 7 at 10p ET/PT on CNBC Prime.

By Scott Cohn | American Greed Special Correspondent | @ScottCohnTV

Philadelphia TV meteorologist John Bolaris had an annual ritual after a long winter forecasting ice and snow: a trip to sunny Miami Beach to relax and recharge. But his 2010 trip would cost far more than airfare, hotel, and incidentals. Bolaris would be stripped of tens of thousands of dollars—and quite possibly his entire career—after falling victim to a surprisingly common scam that targets a man’s ego and his wallet.

“They exceeded the greed limit, whatever there is on a greed limit, you know,” Bolaris tells American Greed.

The scam, detailed in this week’s episode of American Greed, employs beautiful and exotic “bar girls,” also known as “B-girls,” to con unsuspecting male travelers into signing for thousands of dollars in credit card charges by getting them drunk or drugging them.

As a high-profile TV personality with stints in Philadelphia and New York, Bolaris’ case was tabloid fodder for months. It eventually cost him his job, and he believes it left him blackballed from the industry. But lost in all the hype was the fact that this crime is hardly limited to TV stars. Thousands of regular guys every year get stung by B-girls, and most victims are either too embarrassed or don’t have the wherewithal to do anything but pay the massive credit card bills.

The scam is one of several traveler traps in vogue these days. The U.S. State Department Bureau of Consular Affairs website—which is a smart place to visit anytime you are traveling abroad for business or leisure—allows you to search country by country for tips on guarding yourself during your visit. Click on the “safety and security” link in your destination’s profile. Here are some of the top scams we found, most of which are also risks if you are traveling within the U.S.

Identity Theft

In a world riddled with human trafficking and identity theft, your U.S. passport can be golden. Thousands of passports are stolen every year from Americans and citizens of other developed countries. In addition to simple theft by pickpocketers, a corrupt hotel clerk or border control agent could steal your passport or the information on it.

Identity thieves can also do plenty of damage without your physical passport in their hands. In a scam that the State Department says is common in Eastern European countries like Latvia, American travelers are recruited to earn a little extra money by agreeing to be the U.S. agent for a local company. But the company is nonexistent, and the whole pitch is a ploy to get your personal information—particularly your Social Security number.

Remember to treat your identity like it is one of your most valuable possessions, because it is. Never give your Social Security number to anyone, let alone a stranger or an online job board overseas. Crooks can use it to claim your tax refund, obtain government benefits, even get a job or apply for credit, while ruining your finances.

Always be aware of the location of your passport, even when you are not traveling overseas. Never let it out of your sight when checking into a hotel or crossing borders. If you need to obtain a visa before you go, use one of the many reputable visa service companies that will handle your application and monitor the whereabouts of your passport throughout the process.

Then, make color copies of the ID page of your passport, the visa, and your travel documents. Leave one set with a friend or relative at home, and carry the others separate from your actual passport. If your passport is stolen or lost, the copies will help you obtain a replacement quickly so you can get back home. Be sure to report the theft immediately using the State Department’s special web site.

Credit Card Skimming

It’s hard to beat the convenience of a credit card when you’re on the road. Even in some of the most remote locations, merchants and restaurateurs can process your transaction with a small, handheld device brought directly to your table or passed across the counter. But in a crime that the State Department says is increasingly common in, for example, Namibia in southern Africa, that convenient handheld credit card machine is actually a skimming device that steals your account information.

The State Department says that wherever possible you should try to pay with cash. Of course, that carries its own risks. So if you are going to use plastic, pay close attention.

“If you must use a credit card, it is best to observe the transaction closely as it is processed, and to ensure that the card is not taken out of your sight,” the agency advises.

If you are using ATMs, try to stick with name-brand machines in well-lit, enclosed locations. Cover the keypad with your other hand while you are putting in your information, and beware of strangers approaching you to offer help.

Many banks and credit card companies offer a service that will send you an e-mail or text message every time your card is used. Get the service, and read the messages carefully to make sure you don’t get ripped off.

Cop Con

Rome is the Eternal City, and its scams targeting travelers are never-ending as well. One of the latest in Italy involves thieves posing as plainclothes police officers. They will demand to see identification in order to resolve some supposed crime. Of course, what they really want is your wallet, either for your money or your personal information.

No matter how insistent or authoritative the “officer” may seem, you have a right to ask for his or her badge or ID card (“documento” when in Rome). A legitimate officer will comply. Ask for a uniformed officer, and get his documento as well.

In addition, try to keep your wallet out of sight in a front pocket or someplace not easily accessible to pickpockets. If you’re waving your money around or otherwise displaying your wealth, you’re basically advertising to thieves that you are a potential victim.

Fare and Fare Alike

Once you arrive at your destination, chances are you’ll need someone to drive you to your hotel. Taxi scams are prevalent around the world, and they are only getting trickier.

The State Department says one scheme is especially common in Buenos Aires, Argentina, though in theory it might as well be in Buffalo. It involves a person posing as an official “handler” who demands an upfront fee to hail a licensed taxi. The traveler is led to believe that the fee is a flat fare paid upfront, only to be charged again by the driver at the end of the ride.

In another version of the scam, the taxi driver himself asks for the fee upfront. Then, when you are halfway to your hotel, his cab mysteriously breaks down. He calls for another driver who takes you to your destination, then demands to be paid as well.

Consider arranging your transportation from the airport ahead of time, through your hotel or a reputable provider. If that is not possible, stick with the official taxi line at the airport, and avoid paying upfront. Once in town, try to use only radio-dispatched cabs, or arrange rides through your hotel’s doorman or front desk.

Stung by a B

The B-girl scam that devastated John Bolaris occurred in South Beach, but the concept may have originated in Estonia. That also happens to be where the B-girls told Bolaris they were from, and where the scam remains prevalent today according to the State Department.

The B-girls are not working on their own. They are part of an elaborate scheme that typically includes the bartenders, the management, even the club owners. In Bolaris’ case, the racket had ties to the Russian mafia.

Playing to the malleable ego of the usually middle-aged men, it is not difficult for the B-girls to convince the traveler that he is a player—maybe about to get lucky if he plays things right.

They ply him with alcohol, getting him to drink shots of vodka with them. He thinks he is going drink for drink with the B-girls, not realizing that while he is pounding shots of Stoli, they’re drinking water. In some cases, and Bolaris believe his is one, the victim is drugged.

Soon enough, the woozy traveler is signing credit card receipts for purchases like bottles of champagne marked up by ridiculously high amounts—like a $5,000 bottle of wine that runs about $5 wholesale, according to one example in the criminal complaint from Florida. Gratuities run into the hundreds of dollars for every purchase. By the time the traveler knows what hit him it’s the morning after, the B-girls are long gone, and it is nearly impossible to dispute the credit card charges because he personally signed for them.

To ward off the B-girls, never let your guard down. Beware of any drink that you did not personally see being poured. Remember those credit card alerts you set up with your bank before your trip? Pay attention to them, and if you see anything unusual, report it right away to the credit card company and local police.

John Bolaris paid a terrible price for his run-in with the B-girls, but he did get somewhat lucky when they became a little bit too greedy. That allowed authorities to crack the crime ring, and Bolaris to salvage at least a shred of dignity.

But make no mistake; there will always be B-girls waiting to pounce on another lone wolf traveler, leading him like a lamb to slaughter.

Learn how the feds finally busted the Miami Beach B-girls on an ALL NEW American Greed, Thursday May 19 at 10pm ET/PT on CNBC Prime.

By Scott Cohn | American Greed Special Correspondent | @ScottCohnTV

For almost as long as people have been dying, con artists have been trying to make a living off of it, but Doug Cassity’s scam was among the most diabolical of all.

Based outside St. Louis but operating nationwide, Cassity’s business, National Pre-Arranged Services or NPS, targeted a basic human anxiety.

“What is being exploited is Grandma’s fear of death, Grandma’s fear of what her death will do to the family,” Joshua Slocum of the Funeral Consumers Alliance tells American Greed.

It was a winning strategy for Cassity, who played those fears to the tune of $450 million. But the money came from grieving families, and from small, family-owned funeral homes across the country.

NPS sold pre-paid funeral contracts that functioned like insurance policies, allowing Grandma or anyone else to arrange their funerals in advance and pay upfront. The contracts were sold as a way to provide peace of mind. But it turned out Cassity was skimming millions of dollars, hiding his crimes by simply having employees white out the payment information on the contracts and fill in different numbers.

By the time Grandma died and the family sought to cash in the contract, the money was long gone, leaving funeral directors like Carmen Hughey-Deichman of Mount Vernon, Illinois, on the hook. She says she is still honoring NPS contracts to this day, at a huge loss to her small family business.

“It’ll be maybe five million before it’s over. I mean, that’s a rough estimate, but I would say it would be close, and I will probably not be here when the last one goes through the office,” she tells American Greed.

Cassity, now 70, is serving a nine-and-a-half year sentence at a federal prison in Southern Illinois after pleading guilty to seven felony counts in 2013. His son Brent, 49, is serving a five-year sentence after pleading guilty to his role in the scam.

Still, funeral fraud lives on, despite a federal crackdown that dates back more than 30 years.

Know Your Rights

Alarmed by the prevalence of fraud, the Federal Trade Commission enacted its Funeral Rule in 1984.

“The core of the rule is really to make sure that people have accurate price information and know exactly what they are buying when they make funeral arrangements for a loved one which can be an incredible stressful and trying thing to do,” says Lois Greisman, Associate Director in the FTC’s Marketing Practices Division.

The rule includes a bill of rights for consumers, guaranteeing your rights to, among other things:

• Buy only the funeral arrangements you want.
• Get price information on the telephone.
• Get a written, itemized price list when you visit a funeral home.
• See a written casket price list before you see the actual casket.

The FTC has been known to conduct sting operations, “test shopping” funeral homes to see if they comply with the law. Penalties for violators can be stiff.

“They can be subject to a civil penalty in a federal district court action. And civil penalties can range as high as $16,000 dollars per violation,” Greisman says.

Pay Now, Die Later?

Just outside Chicago, the Simkins Funeral Home in Morton Grove, Illinois takes pains to comply with the law, not just out of fear of getting in trouble with authorities, but to protect a reputation built over more than 75 years in operation.

“I would certainly recommend going to a family-owned funeral home. An independent family owned funeral home,” Michael Simkins, part of the third generation of his family in the funeral business, tells American Greed.

“The way we run our operations here, were going to be in front of you the whole time,” he says. “Whether that’s from the removal, through the arrangement conference, through the service where everything concludes. We like to have that family feel here and families seem to appreciate that.”

Simkins encourages families to plan for funeral expenses so there are no surprises later. A reputable funeral director will walk you through the expenses with no obligation.

“My advice would be if you’ve ever thought about burial or cremation, or where you might want to be buried, that you’ve already started your funeral arrangements,” he says. “And I would just suggest that when it’s convenient for you, come and see me. Come and see a local funeral director. Finish those arrangements.”

But he says while pre-planning is a good idea, pre-paying rarely is, because the savings vehicle—typically limited by law to a trust or insurance company—normally offers very low returns. About the only time it does make sense, he says, is when a person is trying to spend down assets in order to qualify for public assistance such as Medicaid—a frequent scenario when someone is going into a nursing home.

Simkins says his funeral home did some business with Doug Cassity’s NPS, but realized fairly quickly that something wasn’t quite right.

“As their contracts were coming in and people had an NPS-funded funeral, I was consistently getting underfunded. And underfunded by a good deal,” he recalls. “So before I committed more contracts with that company, I simply stopped using them and explored other companies that would better serve our purpose.”

Hundreds of other funeral homes and grieving families were not so lucky.

See how Doug Cassity made a living off of people dying on an ALL NEW American Greed, Thursday, June 23 at 10pm ET/PT on CNBC Prime

 ###

Source: FBI

By Amanda Winograd | American Greed Special Correspondent

White collar crooks are on the loose all over the United States and around the world. The FBI’s current White Collar Most Wanted list contains 33 accused criminals who are on the run for alleged offenses ranging from wire fraud to mortgage schemes and money laundering. They’re accused of swindling hundreds of millions of dollars and assets from thousands of victims.

The FBI is offering rewards for eight of the people on their Most Wanted List for White Collar Crimes. If you have the right information, you could be eligible for rewards of up to $20,000. Each FBI field office investigating a particular case determines whether they’ll offer a reward and how big the reward will be. An FBI spokesperson says that they hope people will come forward with information with or without a reward, but they offer rewards when they believe it “would assist in the resolution of a case.” She also notes that in determining the reward, “it is not dependent on the type of crime committed” and “the amount offered does not necessarily correlate to how dangerous a fugitive is perceived to be.”

American Greed viewers have provided tips to law enforcement that led to the capture of fugitives on the Most Wanted list, but plenty are still out there. Depending on the information you provide, you could be eligible for the full or partial reward. It could also be split among multiple tipsters.

Here are the eight wanted fugitives with the biggest prices on their heads:

8. Baffour Edusei Opoku

Reward for information leading to his arrest and conviction: $5,000

The FBI is offering $5,000 for information leading to the arrest and conviction of Baffour Edusei Opoku. He was indicted in 2014 for conspiracy to commit health care fraud after the Feds say he planned to defraud Virginia’s Medicaid program. The FBI says he has ties in New York and Michigan. Opoku is a black male, 5’11”, 260 lbs, with black hair and black eyes. If you have any information, contact your local FBI field office, the nearest American Embassy or Consulate, or call the Norfolk FBI Office at (757) 455-0100.

7. Orit Tuil

Reward for information leading to her arrest: $10,000

Orit Tuil is charged with conspiracy to commit wire fraud for her alleged participation in a real estate scam in the notoriously pricy New York City market. She’s accused of taking advantage of New Yorkers whose homes were in foreclosure. She’d allegedly have the owners transfer the deed to her. Then, the Feds say she’d get mortgages and resell the homes to straw buyers. She used to live in Queens, New York, but the FBI believes she may also be living in Israel. Tuil is a white female, 5’5”, 125 pounds, with blonde/brown hair and hazel eyes.

6&5. John Michael Dimitrion & Julieanne Baldueza Dimitrion

  
Reward for information leading to their arrest: $10,000 each

This crooked couple took advantage of the housing bubble in 2008 to feed their greed. In an elaborate scheme, they’re accused of having straw buyers buy homes that were going into foreclosure. While the original owners thought they were making payments on the new mortgage to buy the homes back, the FBI says the Dimitrion’s were really pocketing the money while squeezing the equity from the homes. With disregard for the original homeowners and the straw buyers- who were sometimes their friends- the Dimitrion’s lived a luxurious lifestyle, driving his and hers Maserati’s and buying high end clothes. When one straw buyer, Laura Cristo, got a foreclosure notice because the Dimitrion’s never fulfilled the payments, she went to the FBI. In 2009, the Dimitrion’s pled guilty to operating a fraud scheme, and it seemed like they would pay the consequences. But they disappeared without a trace. One theory is they may have joined an extremist anti-government group called Sovereign Citizens. The FBI says the Sovereign Citizens may have helped them to get out of Hawaii and possibly into Alabama. There’s $10,000 on the line for each of them. They’re likely somewhere in the mainland United States. John Michael Dimitrion is a white male, 5’7”, 185-200 lbs, with black hair and brown eyes. Julieanne Baldueza Dimitrion is an Asian female, 4’11”, 120-140 lbs, with black hair and brown eyes.

*Greed Alert! Find out more about this couple on American Greed

Who exactly are the Sovereign Citizens? An FBI Special Agent explains:

4. John Anthony Porcaro

Reward amount undisclosed

This fugitive is one of only two on the White Collar Most Wanted list who is considered by the FBI to be armed and dangerous. The FBI says he may have connections to an organized crime family in New York. As always, submit any tips directly to the FBI. Porcaro is accused of defrauding more than 400 victims out of more than $5 million. His co-conspirators were caught, but Porcaro is still on the loose. The FBI says that he was involved in a scheme in which a telemarketing firm took investments, promised returns, and instead took the money for personal use. Porcaro may have connections in New York, but the scheme took place in South Florida. Porcaro is a white male, 5’8”, 197 lbs, with brown hair and brown eyes. Porcaro has an artificial right eye and a scar above his left eye.

3. Spiro Edward Germenis

Reward for information leading to his arrest: $20,000

Spiro Edward Germenis is accused of setting up a Ponzi scheme in which he lured people into his investment company, Oracle Evolution LLC, but then spent their contributions on his own lavish lifestyle. He’s also accused of sending his clients false information about the returns on their investments. Overall, he allegedly lost $8 million for more than 25 victims. His investors aren’t all wealthy, seasoned investors; he allegedly took almost the entire retirement savings from one victim. Another investor, a quadriplegic, was hoping to use his returns on clinical trials in the hopes of walking again. It seems that after one major investor asked for his money back, Germenis realized the jig was up. The FBI says he boarded a plane to Greece and hasn’t been heard from since. The FBI has high hopes that an American Greed viewer might recognize him and be able to pinpoint his location. That person would be eligible for up to $20,000 as a reward. Germenis is a white male, 5’10”, 200-220 lbs, with brown hair and brown eyes. Germenis has scars on his arm and may also have facial hair.

*Greed Alert! Check this guy out on American Greed

Hear from one of Germenis’s victims:

2. Farhad “Fred” Monem

Reward for information leading to his arrest: $20,000

This one’s a doozy. The US Attorney’s Office alleges that Monem pocketed at least $1.2 million in a money laundering and bribery scheme during his employment as a prison food buyer and salesman for the Oregon Department of Corrections. Monem was indicted on twenty counts including conspiracy, bribery, mail fraud, wire fraud, money laundering, and interstate travel in aid of racketeering charges. The Feds say he also may be a marijuana user as well as a drinker. He’s also known to gamble. Monem speaks both Farsi and English. The FBI says he has connections in California, Canada, and Iran. He’s known to have travelled to Buffalo, NY in July of 2007. Monem is a white, Persian male, 5’10”, 210 lbs, with black hair and brown eyes.

*Greed Alert! Check Fred out on American Greed

1. Afzal “Bobby” Khan

Reward for information leading to his arrest: $20,000

Khan is wanted by the FBI for an alleged fraud scheme that took place while he was running a New Jersey car dealership called Emporio Motor Group. Allegedly, part of his business was selling luxury cars on consignment; he set up agreements with luxury car owners to sell the cars on their behalf and share the profit. But the car owners claim that they never received payment for cars they sold through Khan, and the buyers claim that they never received the titles to cars they purchased. It seems like Khan may have gotten greedy and tried to keep the full profit for himself. According to the victims’ accounts, the alleged scheme came to a head when the owners came knocking to find out where their money was, and the buyers came to demand their titles. “A lot of dealers might perpetrate fraud when they know their business is circling the drain and going out of business. In this case it looks like it was his business plan from the get-go,” said the victims’ attorney, Anthony Bush. When the case against him started mounting, Khan disappeared without a trace. The FBI says that Khan has ties to Pakistan, Dubai, Scotland, and Canada. If you have information that leads to his capture, you could be eligible for the FBI’s $20,000 reward. Khan is a white male, 5’10”, 180 pounds, with black hair and blue eyes. He has a scar on his right arm.

*Greed Alert! Watch Khan’s full story on this week’s all-new American Greed

Have you seen any of these fugitives? They could be hiding in plain sight. Keep your eyes open, and watch premiere episodes of American Greed to see if you recognize any of the featured fugitives.

Keep in mind that the FBI is only looking for information. They do not encourage anyone to put themselves in danger to find any wanted fugitives. You can also keep your information anonymous (but you won’t be eligible for the reward).

Remember, withholding information or helping to hide a fugitive can also land you behind bars. Come forward as soon as possible with any tips. Contact your local FBI field office or the nearest American Embassy or Consulate, or visit www.tips.fbi.gov. For the full White Collar Most Wanted list, go to www.fbi.gov/wanted/wcc.

Don’t miss an all-new episode of American Greed on Thursday, June 30, 2016 at 10p ET/PT on CNBC.

By Scott Cohn | American Greed Special Correspondent | @ScottCohnTV

A New York businessman who shocked the world with claims that he was the rightful owner of half of Facebook, only to be charged with criminal fraud and then flee, has been on the run for so long that the judge in the case is demanding answers from federal authorities—which so far, they are not providing.

But investigators insist the trail of Paul Ceglia has not gone cold, even as they appeal to the public for help.

Ceglia, a former heating fuel dealer from upstate New York, came out of nowhere in 2010 to claim he had a contract signed by Facebook founder and CEO Mark Zuckerberg to prove the ownership stake. But after investigators from Facebook convinced a federal judge that the contract was a fake, prosecutors followed up with criminal fraud charges.

Then last year while awaiting trial, Ceglia vanished, having briefly fooled authorities by rigging his home monitoring device Ferris Buehler-style to make it look like he was still living under house arrest. Ceglia’s wife, two young children, and the family dog have gone missing as well.

But a deputy United States Marshal working the case says the investigation is still active, even though prosecutors missed a court-imposed deadline earlier this month for a progress report on the manhunt.

“I can’t get into all the details of the investigation, but we are continuing to work on all the leads that have come in, both domestic and international,” Deputy U.S. Marshal Scott Baryza tells American Greed.

After Ceglia skipped bail in March 2015, United States District Judge Vernon Broderick in Manhattan ordered the U.S. Attorney’s office to update him every four months on the progress of the search. But in a filing on June 9, the judge noted that the government has not provided an update since December.

In that letter, prosecutors only say that Ceglia remains a fugitive, and that investigators are “using a variety of law enforcement tools and following up on leads from those responding to requests for information.”

In his most recent order, Judge Broderick told prosecutors to file another update no later than June 24, but they have not yet done so.

If authorities have narrowed down their search for Ceglia, they are not saying much.

“We know he’s had ties in the past with Florida, Texas, California, and the state of Washington,” Baryza says.

But with more than a year on the run, Ceglia has had time to travel farther than that.

“We know his family is from Ireland, so there’s also the possibility that he could be outside the U.S. too,” Baryza says.

In fact, Ceglia has dual citizenship in Ireland, though he surrendered both his U.S. and Irish passports following his arrest in 2012.

Perhaps it should come as little surprise that Ceglia, 42, is proving to be a slippery character. His high school classmates in Wellsville, New York, voted him “most corrupt,” according to the 1991 school yearbook.

“A lot of his high school friends were saying he always had some kind of a scheme going or some kind of a make-money-quick business idea, and that was kind of his M.O.,” says John Anderson, regional editor at the Wellsville Daily Reporter.

The scheme to claim half ownership of Facebook—a stake that would have been worth $11.5 billion in 2010 and more than ten times that today—was the wildest of all.

Ceglia claimed that he had hired Zuckerberg to write some software for him while Zuckerberg was still a student at Harvard. Ceglia said he later agreed to allow Zuckerberg to use the software as the source code for the new social network he was developing—a network that would become Facebook—in exchange for half interest.

Zuckerberg has acknowledged that he worked with Ceglia, but he and Facebook have denied everything else. They hired forensic experts to show the Ceglia had altered the actual contract the two had signed for the software job to make it look like Zuckerberg was signing over half interest in Facebook.

A federal judge dismissed Ceglia’s civil claims, and a federal grand jury indicted him for mail fraud and wire fraud.

He could face up to 40 years in prison if convicted, but first authorities have to find him, and they are asking for the public’s help.

“It’s really any information,” Baryza says. “You know, the public may think it’s a small piece of insignificant information but as the case goes on as a whole it could be a significant piece in finding him.”

You can e-mail the U.S. Marshal Service at usmswanted@usdoj.gov, call them at (800) 336-0102, or send an anonymous text to “TIP411” (847411) with “USS Ceglia” as the first line.

Find out more about Paul Ceglia’s “Facebook Face-off” on an ALL NEW American Greed, tonight at 10pm ET/PT on CNBC Prime.

###

Jeff George’s supplement to his 2011 plea agreement, in which he describes how he and his brother Chris first got into pain management. Jeff also provides details about a riff in their partnership which caused him to start his own series of clinics, as well as how the George brothers handcuffed a friend suspected of stealing money and fired a weapon as a threat.
Source: United States District Court, Southern District of Florida, Public Domain

By Scott Cohn | American Greed Special Correspondent | @ScottCohnTV

The tragic case of Edna Schmeets is not hard to understand, and is alarmingly common.

The Harvey, North Dakota woman turned over some $400,000 to telephone con artists who convinced her that the money would allow her to claim a $19 million Jamaican lottery prize. Of course, there was no prize, no lottery, and Edna’s money went straight to a bunch of crooks. Think you are too smart to get roped into a scam like that? Then the fraudsters already have a leg up on you. In fact, you may have already supplied them the tools they need to begin ripping you off.

The fraudsters who ripped off Edna got her name from a list they had purchased from a Jamaican man, Sanjay Williams, who also had ties to Charlotte, North Carolina. Williams had started out on the front lines of the ubiquitous Jamaican lottery scams, as a telemarketer calling unsuspecting victims. But he found his skills more suited to gathering the victims’ names and numbers to begin with.

Not that gathering the information required a whole lot of skill.

According to a 2013 criminal complaint, Williams operated a web site called “gamblersleads.com,” selling lists of potential victims—complete with contact information—to telemarketers, raking in hundreds of thousands of dollars. Compiling lead lists for telemarketers is not a crime in itself, of course. But Williams was creating what fraudsters call “sucker lists.” And it was as easy as shooting fish in a barrel.

Williams’ weapon of choice was direct mail—a common tactic, according to U.S. Postal Inspector Scott Horne.

“The scammers may draft a letter and say if you want to enter into a lottery, then the only thing you need to do is send a payment of $19.99,” he tells American Greed.

Most people consider it junk mail and throw it away. But the ones who comply are perfect candidates for a sucker list. By sending back the post card, the victim has supplied the crooks not only with their identity, but also their contact information and in many cases their bank details. Plus, they have identified themselves as someone who is eager to win the lottery—and believes they really might have a shot.

“It’s not a coincidence that it’s seniors who are so often targeted,” says Steve Weisman, a senior lecturer of law, taxation and financial planning at Bentley University in Boston, and author of the new book Identity Theft Alert: Ten Rules You Must Follow to Protect Yourself from America’s #1 Crime.

“Scam artists are the only criminals we call artists, and they prey on fear and greed,” Weisman says.

But even if you are not a senior, or you think you couldn’t possibly fall for such a scam, don’t let your guard down. That means don’t give your phone number to strangers—even if you think it might give you the inside track on a multi-million dollar lottery prize, which, by the way, it won’t.

Of course, there are plenty of other ways for crooked telemarketers to get your phone number, which explains many of the calls that practically everyone gets every day. Answering those calls is, in many cases, not much different from filling out that direct mail lottery card and sending it in. Just by picking up the phone and saying “hello,” you have informed the crook that your phone number is real and someone is home. And you’ve probably won yourself a spot on one of those sucker lists.

Experts say you should never pick up a call from a number you do not recognize.

“If you get a call and it’s from an 876 area code, that’s from Jamaica,” Weisman cautions. “Unless you’ve got a relative that’s vacationing there, you don’t even pick it up.”

Jamaica is a hotbed for the lottery scams, to the embarrassment of the Jamaican government, which values the country’s ties to the U.S. and would prefer to be welcoming to American tourists. So since 2009, Jamaican police and U.S. authorities have partnered on an anti-lottery task force.

The case of Sanjay Williams—the man who peddled the sucker lists—was a milestone: the first list seller successfully prosecuted in the U.S. He is serving a 20-year sentence for conspiracy, fraud, and money laundering.

His 2013 arrest also led authorities to a fraud ring including the people who carried cash to and from Jamaica. Eleven people pleaded guilty.

But authorities say none of that will do any good until people stop taking the bait.

“Have you tried to talk to your elderly loved ones or your parents about their finances? It’s not easy,” says Jim Stitzel, Jamaican Attaché with the U.S. Department of Homeland Security, but it is vital. “Have that tough financial conversation because it’s better to have it and have a small dustup now than have it when they’ve lost their life savings.”

Edna Schmeets lost almost everything, until her children intervened.

“What in the hell was I thinking? I wasn’t thinking. I can’t even believe it. I mean, could you actually be that stupid,” she asks.

But in the end, Schmeets helped the authorities bust a multi-million dollar fraud ring.

Trouble is, there are plenty more where it came from.

Explore the shadowy world of Jamaican lottery scams, and learn more about how to protect yourself, on an ALL NEW American Greed—Thursday, July 14 at 10pm ET/PT on CNBC Prime.

###

By Scott Cohn | American Greed Special Correspondent | @ScottCohnTV

The statistics are startling, particularly in light of a multi-year federal, state, and local crackdown on prescription drug abuse.

Each day, at least 40 people in the U.S. die from an overdose of prescription painkillers.

Yet in 2014—the latest figures available from the Centers for Disease Control and Prevention—health care providers wrote 245 million prescriptions for painkillers. That is nearly enough for every American adult to have a bottle of pills.

And the figures come even after several high-profile busts, like the 2010 takedown of Florida brothers Christopher and Jeffrey George, who ran what’s believed to be the nation’s largest pill mill operation. The business employed corrupt doctors who rubber-stamped prescriptions for thousands of addicts who paraded through their clinics every day. Those clinics dispensed some 20 million pills, meaning the Georges made $40 million in just two years.

The brothers are in prison for a raft of felony counts, including a guilty plea by Jeff George to second-degree murder involving a clinic customer who died from an overdose.

The bust was designed to send a message to those involved in the painkiller trade, says FBI Special Agent Kurt McKenzie, one of the lead investigators in the case.

“You’re going to catch heat. There’s going to be an investigation. If you’re the doctor, you could go to jail. If you’re the clinic owner you could go to jail,” he tells American Greed.

He says the George case represented an important change in how law enforcement is tackling the issue.

“A standard practice down here had been to address the junkies. Or maybe a doctor from time to time. Nobody had addressed these types of issues as an operation of organized criminal conspiracy, until we got involved and we treated it the way we did,” he says.

And yet the problem persists. McKenzie admits that law enforcement can only do so much.

“My opinion is the best solution for this is not just investigative, it is legislative,” he says.

“The manufactures are allowed to produce these drugs. They’re allowed to distribute these drugs. But the volume and the distribution and the frequency at which these things are prescribed by the physicians on the ground level are the problem too.”

Pretty much everyone—including the pharmaceutical industry’s main trade group—agrees the most effective tool is a prescription drug monitoring program (PDMP) that can allow law enforcement to track where the painkillers are going and whether they are being overprescribed.

Following a multi-year push, 49 states have established prescription drug monitoring programs. Only Missouri is without one. Legislation there has repeatedly stalled over privacy concerns.

The industry trade group, Pharmaceutical Researchers and Manufacturers of America (PhRMA), says the next step should be making sure the various state programs can talk to one another, sharing information while protecting patient privacy.

McKenzie notes that Florida did not have a PDMP when the George investigation began, but it did by the time it ended.

“That is the biggest tool and best way to curb this problem. It won’t make it go away, but it will make it easier for law enforcement to track the activity,” he says.

Meantime, the enforcement crackdown is picking up steam.

A four-state sweep last year known as Operation Pilluted resulted in 280 arrests including 22 doctors and pharmacists. The U.S. Drug Enforcement Administration says it was the largest such operation yet.

But just like the bust that took down the George brothers and their massive pill mill in Florida, it won’t be the last.

See how the George brothers combined addiction and greed to concoct a prescription for disaster on an ALL NEW American Greed—“Pain Killers Profits”—Thursday July 7 at 10pm ET/PT on CNBC Prime.

###