Risky Business: A Teen, A Nightclub, and a Ponzi Scheme | Ian Bick - Part 1

[00:00:06] Wow, I mean this guy has a story. First off, I've never met someone so young who

[00:00:13] went to jail for fraud. Well, you'll hear the whole story, but also

[00:00:21] after spending several years in jail and all the

[00:00:25] experiences of that plus all the events leading up to jail, he has

[00:00:30] totally

[00:00:32] transformed his life.

[00:00:33] I'm talking about Ian Bick. You could check out his very popular YouTube and TikTok clips about his experiences in jail and his podcast.

[00:00:41] I highly recommend you check out his podcast. That's how I first learned of him, but let's hear a story. How did he get in jail?

[00:00:49] What happened to him in jail and what happened afterwards? Here's Ian.

[00:00:53] This isn't your average business podcast and he's not your average host. This is the James Altucher Show.

[00:01:13] Ian Bick, I was watching some of your YouTube videos and then I watched the Max Show, the HBO show

[00:01:20] Generation Hustle which featured you. An incredible story. I was like blown away by your story. Well first off welcome to the show.

[00:01:27] Thank you man. I appreciate it man. I'm glad we can make the time to make this happen.

[00:01:32] Yeah, so

[00:01:34] you basically

[00:01:36] went to jail at this young age

[00:01:38] and now you've been telling the story and it was like an incredible story.

[00:01:42] So I don't know how really to do this. Just what happened? Why'd you go to jail?

[00:01:46] I mean, I know the story but let's go through it.

[00:01:49] Yeah, I mean it's a crazy story. I mean in a nutshell

[00:01:53] I started promoting teen nights and doing house parties at 16.

[00:02:00] Oh, you should go to jail for that.

[00:02:02] Yeah, well that's how it started. I started as a sophomore in high school doing these things and I turned it into a business, a party promotion business

[00:02:10] and 16 years old making $10,000 in one night and that's all cash.

[00:02:15] So can you walk me through that? So you're a sophomore, you've got some space and this is all on the various videos and stuff

[00:02:25] but I'm just describing it. You got a party space to do this in

[00:02:30] and were you filling up every party? And I assume you charged?

[00:02:35] Yeah, so it was like this local historic rock club in Danbury, Connecticut called Tuxedo Junction.

[00:02:40] It had like Oasis play there. It had all these big bands.

[00:02:44] It had deteriorated in later years and then it was becoming just like a regular nightclub

[00:02:50] and they did these things called teen parties

[00:02:52] and I had seen them in past years and I had gotten the idea to kind of bring them back and put a spin on it

[00:02:59] so I would rent the place from the owner.

[00:03:02] $1,500 at first he let me rent the small room then I escalated to the big room

[00:03:07] and total expenses were anywhere from like $2,000 to $3,000 between security, the venue,

[00:03:13] like sodas, flyers, anything like that and then

[00:03:17] it turned into like say we would sell a ticket for 10 or 12 bucks.

[00:03:23] You get 1,000 people minus your expenses and that's your profit.

[00:03:28] Wow, I was a paper boy when I was a sophomore in high school.

[00:03:32] I didn't make any money at all. I made like $30 a week but first off

[00:03:39] I saw in one of the videos were in Generation Hustle

[00:03:43] part of the reason you did this was not just for the money but people knew who you were when you

[00:03:47] were doing this. They were going to Ian Big Party's, you were a celebrity at the school.

[00:03:52] Yeah, I always say like so I was never like a drug addict or addicted to alcohol or anything

[00:03:58] like that and my addiction was always chasing popularity and wanting to be liked

[00:04:05] and that like fed off of it and I guess in a way it's kind of what I do now in that

[00:04:09] sense but it's just fueled in a positive direction. I think that's kind of like always there but it

[00:04:16] expanded and matured as I got older. But these throwing these parties, this seems like a positive

[00:04:21] direction. Like you were running at that point a legit business as a sophomore.

[00:04:26] Yeah, it was a legit business but I think that the next steps I took were fueled just on

[00:04:32] wanting to be more and more liked and wanting to be out there and to be famous.

[00:04:36] I guess I valued fame way more than I value it now which is it's funny in a way because now

[00:04:43] I guess you could say I'm actually well known whereas before only like a thousand kids at

[00:04:48] a local high school knew me. Now millions watch the content but I'm just not motivated the same

[00:04:54] way as I was before and I think that's where the negative aspect comes about it being that

[00:04:59] young kid chasing fame, celebrity status, the money and that just propelled me to make a lot

[00:05:06] of bad decisions. Now was the popularity like were you getting girlfriends? Like what was going on

[00:05:12] in your personal life while this was happening? So the thing with me is I'll always tell people

[00:05:16] like I'm very, I'm extroverted but I'm introverted in a way I've always been shy when it came to

[00:05:22] like women in high school. I wasn't necessarily good looking. I was like the chubby, nerdy kid

[00:05:33] with the glasses and I wasn't comfortable in my own skin. I think it wasn't until really like

[00:05:38] after prison when I had a new body and I started valuing going to the gym that mindset really changed

[00:05:45] but for someone that was like the king of the house parties and was like one of the most popular

[00:05:50] kids in school, I wasn't the one getting all the girls. And so like okay so what happened next?

[00:05:56] You're making a ton of money for what were you spending the seven thousand a month on? Like

[00:06:01] what could you even spend it on? So I bought a my first car was a Honda Del Sol which I did not

[00:06:08] know how to drive because it was stick. It was a two-seater coupe like a convertible. I thought

[00:06:13] it was the coolest car ever. It was like the cheapest thing to a sports car but I couldn't

[00:06:17] drive it because I couldn't learn stick so my dad, I gave it to my dad and then I wanted an

[00:06:24] Audi and because I had friends that had an Audi but I didn't have that much money. You know

[00:06:30] I had like 10 or 15 grand cash so I go and buy this Audi for like seven grand and any Audi you buy

[00:06:35] for seven grand usually going to be like a piece of shit. So I bought this black one that was in

[00:06:40] nice condition but I got halfway home and the check engine light went on and the hoods started

[00:06:46] steaming and the person that I bought it from blocked me. So I would spend money on stuff

[00:06:52] like that and then there would be I would always take my friends out for dinner. I would take them

[00:07:00] out to dinner, we would do like no one ever had money to go out because they were either not working

[00:07:06] or their parents would give them 20 bucks to go out or whatever and I would pay for the movies,

[00:07:11] I would pay for dinners, I would pay for whatever. I was the one that paid for it.

[00:07:16] And I bet your parents were proud of you? Yeah they were definitely proud of me. Always

[00:07:20] very supportive. My dad had a catering company so I worked for him. I grew up like going to

[00:07:24] like the premiers for Harry Potter because he was like one of the caterers for the Goblet of Fire

[00:07:29] when that movie came out. I got to do cool things and I was involved in the business through him.

[00:07:35] And so okay so now you're trying to get bigger what happens next?

[00:07:40] So I get like in my mind I figured the next step from throwing these club parties well two

[00:07:48] things were happening, one the market was getting oversaturated because everyone wanted to start doing

[00:07:53] these parties and to make the money so the market gets oversaturated and they kind of fizzle out

[00:07:58] and two I figured the next step up would be doing concerts being like a concert promoter kind

[00:08:04] of like mimicking what like Live Nation did who was like the leading concert promoter at the time

[00:08:09] and that that was my plan to do large-scale concerts at local colleges and arenas.

[00:08:17] And by the way when you say you got saturated were kids available all the time to go to parties or

[00:08:22] eventually like you say there's so many parties how many parties could a K go to?

[00:08:26] I think that what happened was that the nightclub business for teens was getting a bad rep

[00:08:32] because so many kids were doing parties that kids would go to one and there would barely be

[00:08:38] any people there. So it was hard to differentiate who was throwing the parties and kids weren't

[00:08:43] the thing about the teen nights is we did it once a month. It wasn't something where you could

[00:08:48] do it every weekend so when they start popping up every weekend it kind of loses the fizzle and

[00:08:52] the spark to it and kids just got tired of it and it just like died out and it didn't

[00:08:59] they weren't happening. Now concerts taking into a new level because you got to get a bigger

[00:09:05] space, you got to secure the space, you got to get the talent to perform and then you

[00:09:10] got to promote it. So it's an added couple dimensions.

[00:09:15] Yeah it's definitely like it's a big league you're working with you go from teen parties

[00:09:19] which cost a few thousand to a concert that can hold five thousand people in the budgets you

[00:09:24] know 120 thousand dollars and the very first show I remember doing was Big Sean at the

[00:09:31] college Western Connecticut State University in Connecticut in Danbury where I was living

[00:09:37] and my business partners at the time had actually went behind my back to put this show together

[00:09:44] with another guy from Rhode Island that was in the concert business and they came to me after

[00:09:49] they booked it and paid for everything realizing they kind of needed my help to promote it. So

[00:09:55] luckily thank god down the road I didn't end up putting any money into this concert because

[00:10:00] the concert ended up losing but that was like my first foray into the the big concert business and I

[00:10:08] got to work with Big Sean, I got to meet him and see how like a production of that caliber gets put

[00:10:12] together. And it did lose money though like what made you think you could make money in the business?

[00:10:20] I was just I was very naive I just always so like me like I always think best case scenario

[00:10:26] or at least at that time I was never considering the worst so in my mind like when I was drafting

[00:10:30] up budgets and thinking how things would go I'm looking at okay the capacity is five thousand people

[00:10:36] I'm always thinking it's going to sell out at five thousand people I'm not looking at what the

[00:10:41] minimum is that you need or what's worst case scenario or anything like that it was always

[00:10:46] okay it holds five thousand people are going to get five thousand people to go and this

[00:10:50] is how much we're going to make so it was never even a thought of what could go wrong.

[00:10:55] And so what was the first concert where you were like you had money at risk or you had

[00:11:01] investor money at risk? So after that Big Sean concert failed me and my partners kind of worked

[00:11:07] things out together because that concert was a flop they lost some of their money and we came

[00:11:12] together and we're like we could do this better on our own working together and that's when we

[00:11:17] start raising funding from like friends and family raising investor money and I go to like

[00:11:25] legal zoom.com and I print out an investor contract because in my mind you know I'd watch movies and

[00:11:30] TV shows that if you're going to run a business one you need an LLC so we made an LLC got a

[00:11:36] business bank account and I'm 16 years old at the time 17 years old and you need those things

[00:11:42] and you need contracts any deal you need needs a contract so I go start like handing out these

[00:11:51] investment agreements at the high school meeting up with kids connecting with them and I'm saying hey

[00:11:56] do you want to put money into this because before that I had gotten some investors like a few hundred

[00:12:01] bucks into the teen nights and they had seen good returns but now I'm asking people for like

[00:12:05] 10 or 15 thousand dollars because we wanted to do a Wiz Khalifa show and that would cost like 120

[00:12:11] thousand and very how much would it cost to book Wiz Khalifa? So one of our partners was saying at the

[00:12:17] time it was going to be about 60 grand to book him which turned out to be false. He never actually

[00:12:23] had the connection to book him but we were operating under the assumption that he could get us a

[00:12:28] Wiz Khalifa for 60 thousand dollars and that the show cost 120 thousand dollars with the venue

[00:12:34] security production everything like that and we needed to show proof of funds that we could

[00:12:39] actually get him and so I start going out with these investment agreements and no one's

[00:12:46] biting no one wanted to risk that much money so what I do that kind of like defines the rest of my

[00:12:52] future is I edit one of the lines in the contract to say you'll be guaranteed your initial

[00:12:59] investment back not a profit or anything just you'll be guaranteed your initial investment

[00:13:04] back so and you'll get a percentage of the show if it makes money so to simplify it if the show cost

[00:13:09] 100 100 thousand dollars if they put up 10 thousand dollars they would get their 10 grand

[00:13:15] back whether the show lost or not and they would get 10 percent of any potential profits so if

[00:13:20] it made 110 thousand dollars you'd get 10 percent of 10 thousand. So now did anybody or did you

[00:13:42] think do you think yourself when you wrote that it was a guarantee you get your money back

[00:13:47] do you think there was a risk that they wouldn't get did you have like a plan B if they didn't get

[00:13:51] their money back and second did any parents of these kids come to you or your parents look at

[00:13:58] this line and say you know Ian how can you make this guarantee that doesn't sound right.

[00:14:02] Well I never showed my parents the contract but the other parents no no one said anything

[00:14:08] it was just it was just so random you know I would like I guess it was luck that no one asked or

[00:14:19] anything I think another part was that people saw that I was already successful people saw

[00:14:27] that I was already promoting parties so that there was that element there was news articles

[00:14:32] coming out that I was like a local entrepreneur because I just did like this charity thing for

[00:14:36] the local homeless shelter these things were happening and I didn't think that there was that

[00:14:44] there was even going to be an option of how I would pay them back if they lost money because

[00:14:48] I was just sold that Wiz Khalifa would sell 5000 tickets. Right. So that's just what I based it

[00:14:55] on and at that time the break even for this whole concert was like 2200 at the lowest ticket so I

[00:15:02] was like okay at the very least we're going to get 2200 people so there was no discussion and

[00:15:07] like throughout my whole story up until I would say until I start my new business now

[00:15:13] that I would actually consider well what happens if it loses what are the what are the negatives

[00:15:19] to this. Yeah so you go out and like do kids have money to invest? Yeah see I guess that's

[00:15:26] one of the shocking things about this whole story is that I was able to get kids to give anywhere like

[00:15:34] the lowest investment was 500 some kids were putting up a thousand others 3000 some the most we got was

[00:15:40] like 12 five from someone and it's kids and their parents and they would be coming to school with

[00:15:45] like checks made out to my business for like 10 grand and after like a week I had a you know

[00:15:51] 125 thousand dollars in this bank account in the business bank account. That's you know there's some

[00:15:58] Silicon Valley companies out there that can't raise money that fast. And this is no business plan

[00:16:05] no business plan nothing just like a one Excel spreadsheet showing the budget of the concert

[00:16:11] it was very straightforward artist cost venue cost security yada yada yada at the bottom

[00:16:18] gross revenue potential at this ticket price there was like three tiered ticket prices

[00:16:23] if it sells 5000 tickets this is how much we're making. So yeah so if someone had put in 3000

[00:16:29] dollars what were you telling them was the potential they could make? So on 3000 dollars if

[00:16:34] the show cost 120 thousand dollars they would get whatever that percentage was of that they put in

[00:16:39] towards it that's how the pot was split up. So like what did you what did you think was

[00:16:44] the profit was going to be? I think it was going to gross like 250 or 300 thousand

[00:16:51] so they could potentially double their money. Yeah if the thing sold out I mean that's the

[00:16:54] thing with the concert business there's a huge return to if you have a sell out you know there's

[00:17:00] you can make a lot I mean I had already seen it firsthand I was investing three grand four

[00:17:05] grand into the team club business and I was tripling that so I knew that it was legitimate

[00:17:11] in that sense that it was it was possible to do just not on that level I was just trying to get too

[00:17:17] big too fast. And how are you going to pay yourself like what percentage were you going to get of the

[00:17:23] profit? So I at that time I had personally invested 10 grand into it so that was my like

[00:17:30] share of it too I had money into it because I was making money through the team nights I had

[00:17:34] invested money and then like my company was going to get like a like a small percentage of

[00:17:39] like 10% or whatever that we shaved off the top for like organizing the whole thing. The main thing

[00:17:44] was just for like exposure getting us out there and getting a show under our belt. Okay and then

[00:17:50] Wiz Khalifa didn't happen what'd you do? So Wiz Khalifa doesn't happen show blows up our business

[00:17:56] partner ends up lying and was not able to ever get him and so we go to the investors

[00:18:02] and we tell them the truth we had like this meeting this famous meeting in my living room

[00:18:06] in my parents house and all the kids showed up and we just said hey it's not going to work out you

[00:18:13] guys can have your money back or we have a new idea to invest the money into a bunch of shows

[00:18:18] and Connecticut and Rhode Island and Massachusetts and split the money so it'd be even less risk

[00:18:23] money still guaranteed but you know this is what we would do and and half took out their money

[00:18:29] and the other half stayed and you know looking back on it now I really wish everyone just took

[00:18:35] out their money because that probably would have been the end of it but half stayed and there was like

[00:18:40] 60 grand left give or take and we put that into like six shows spread out over like six months.

[00:18:47] And these were just what kind of shows were these? These were EDM shows, electronic dance music,

[00:18:53] these were hip hop shows, these were yeah those were the two types of shows that

[00:18:59] there were there and it ranged from small capacity nightclubs to an arena to arena size shows.

[00:19:07] The issue became is that $60,000 doesn't cover six full shows you know like six full scale productions

[00:19:15] so we were investing in basically the way I'd best describe it is I was like the hedge fund

[00:19:22] investing into other people so I raised the money took all the risk and now I'm investing

[00:19:27] into other concert promoters who are in charge of the finances, the artists, the marketing and it's

[00:19:33] out of my control and something I realized now is that every time I was always out of control

[00:19:39] not doing it myself not promoting it it always failed so I was giving these individuals money

[00:19:45] other promoters and stuff and just every single one of them tanked lost money.

[00:19:50] And how did they lose money or were they kind of scamming you?

[00:19:53] I got scammed a couple times like never got the money like I gave 15 grand to this foam show at

[00:19:59] the University of Massachusetts and to this day I never got the money I had gotten a lawyer

[00:20:04] when it first happened and I spent five grand legal fees so at that point I'm already five

[00:20:09] grand in what am I going to spend 10 more and then I'm breaking even if that it was

[00:20:15] still going to be a loss either way. What happened was this was like this string of shows

[00:20:21] was the the determined basically the changer for the rest of my life because on the first show

[00:20:28] I was getting reports from the guys we were partnered with and they were saying how well

[00:20:33] the show was selling and everything was coming together and then the night of the show and I'm

[00:20:39] relaying this to my investors the night of the show I went with my friends that had invested

[00:20:44] we got a limo we got hotels we're at the University of Rhode Island watching this

[00:20:48] whole thing and I'm thinking we're making money and one of the guys that was partners in the show

[00:20:54] from the other team comes up to me and he's like dude we took a wash on this show and I'm like what

[00:20:59] do you mean he's like we lost all this money and it was in that moment where I'm like fuck like

[00:21:04] I lost all this money I didn't know we lost this money and I had the decision to make whether

[00:21:10] I tell the truth to the investors these were my friends and stuff and then they're

[00:21:15] going to end up not liking me after or two or and if I tell them the truth as a part to number one

[00:21:22] is that they might think I'm trying to screw them because the place looked packed and what I

[00:21:26] didn't realize at the time is that looks are deceiving in the concert business you could have

[00:21:30] a room that looks packed but it's really not that packed it just it's all the optics and

[00:21:38] the second option was to lie to cover it up and hope the next show would make money

[00:21:41] to cover up that lie so I chose to lie and it ends up none of those shows make money and I just

[00:21:48] kept getting into a hole and a hole and a hole so on this first 60,000 how much do you think you

[00:21:53] were in the hole but the entire 60,000 so on the 60,000 I think I got back about 20,000

[00:22:02] like revenue from the event so I should have been in a perfect world down about 40,000

[00:22:08] but I guaranteed everyone back their money so I'm out the 40,000 regardless right there that I owe

[00:22:14] then the second aspect to this is that each show I'm hoping the next show is going to cover the

[00:22:20] losses I'm not telling them that they're making money or that they're losing money so I'm imagine

[00:22:25] I'm creating an imaginary profit so if a show lost five grand I'm saying it made

[00:22:32] you know five grand so that's already 10 grand split right there that I'm down so all in all

[00:22:39] I was down probably I think I created 20,000 a fictitious profit so I think I was at about

[00:22:47] 60,000 on this whole thing that I owed investors. So at this moment were you like

[00:22:53] like were you able to sleep were you stressed like were you nervous going to school and

[00:22:57] talking to people or were you kind of confident that this was going to work out?

[00:23:01] The first few months I was fine because there was always another show so the way my mind works is that

[00:23:08] as long as there's something planned I'm okay but when there's not something planned like in the

[00:23:14] horizon that gives me hope like if there's no hope then I get worried then I get anxious

[00:23:21] like in prison for example if you have an appeal it could be five years out an appeal date

[00:23:28] you're okay for those five years because you have hope like if you have a 20 year sentence and your

[00:23:34] appeal court hearing is in five years you're okay mentally you're at peace for a little bit

[00:23:40] it's when that last option is gone that's when you know you're in anxious mode and you're like

[00:23:48] you know you don't know what to do so I think that's when the stress started

[00:23:52] but that was like months down the line into it. And what year were you into this point

[00:23:56] were you a junior or a senior? This was senior year 2013 I had left high school I was supposed

[00:24:04] to graduate a semester early but they ended up holding me back over a 0.5 credit literally

[00:24:10] 0.5 credits and I had to get a lawyer and end up suing them to get my diploma they didn't let

[00:24:16] me walk at graduation it was a whole big thing they didn't like that I was doing the house

[00:24:20] parties and the club nights because they were getting a bad rep for like the inappropriate

[00:24:24] music and the girls grinding on the guys and this and that what I realized is like public high schools

[00:24:30] are very like anti you know like going off the establishment making like you have to go to college

[00:24:36] you have to do this you have to do that and they and I was everything but that I was not believing

[00:24:40] in college I was not at that point I knew I wasn't going to college I went to Johnson

[00:24:45] and Wales for a weekend in Miami that my parents were like listen you don't have to go

[00:24:50] to college but you got to at least go to this to see if you like it and they sent me and you know

[00:24:56] it was cool and all but the people at Johnson and Wales they they give us this tour around their

[00:25:03] huge campus how great it is and they're like yeah but you're not going to use any of the facilities

[00:25:07] here for the first two years you're going to be stuck in the classroom doing the academic part

[00:25:11] so that was a turn off and then the biggest turn off of my life on the college aspect

[00:25:16] was they brought us to the fountain blue Miami hotel and they were introducing us to interns

[00:25:23] that had gotten jobs there after they graduated because they were like this is where you could

[00:25:27] work and I thought that was really cool and then I see what one of the interns doing

[00:25:31] and she's folding and polishing silverware folding napkins polishing silverware with a

[00:25:36] college degree and at that point I had already had a corporate job working at a conference in

[00:25:41] Banquet Center in Danbury I was helping them book proms and weddings and stuff so I was way

[00:25:46] above that at that level so that was like my decision I'm never going to college after seeing that

[00:25:54] I totally agree with you by the way I mean college is a total scam I mean well

[00:26:00] college presidents should probably all go to jail but that's a whole other topic

[00:26:04] I mean they just keep raising tuition and because the government backs all the loans

[00:26:07] they know they're going to get their money if they keep raising it more more

[00:26:10] and 18 year olds are the ones that get screwed borrowing all the money this is a whole other

[00:26:14] topic so but did you think maybe oh when I graduate high school I could maybe forget about

[00:26:21] all the debt that I owed everybody I could just confess to everybody hey we ended up not making

[00:26:26] any money sorry next time no never I always I always just wanted to so like all of my lies

[00:26:33] like over time I've always stemmed from just wanting to pay people back and just buying time

[00:26:39] so it was always just like a stalling tactic to try to figure out the next thing to make people

[00:26:43] money back that's all it ever was so after this 60 grand what was what was next so next what happened

[00:26:50] was my one of the kids that invested was starting to become my best friend and he came up to me

[00:26:59] and he kind of figured what was going on and he gave me a business idea that he was doing to resell

[00:27:05] electronics he was getting like beats by Dre and beats pills and Otter boxes and all these things

[00:27:12] that he was saying you know was coming off the back of a truck that was like dented and it was

[00:27:17] marked really cheap and I didn't I never was into these types of things so I didn't really

[00:27:22] know what I was getting into but he was basically saying we could get like this beats headphones for

[00:27:29] 40 bucks and we could sell it for 300 bucks so in my mind I'm like okay that's hundreds percent's return

[00:27:35] we could start a whole business here um so I got the idea to start taking more investments from

[00:27:41] like people that I worked with at this um banquet facility this and that but it wasn't

[00:27:45] going to be an investment it was going to be a loan guaranteed guaranteed loan at a 50%

[00:27:51] interest rate of return over 30 days because the logic is okay if you James give me 10 grand

[00:27:57] I'm going to use that 10 grand by 10 grand worth of electronics sell it on ebay and amazon which

[00:28:03] will sell within 30 days you know 100 percent I'm thinking at the time and it's going to

[00:28:09] make like 30 40 grand on that 50 grand so I can easily give you five grand back on your money

[00:28:15] and that's how it starts I start you know it's pitching these loans um for at a 50% rate of return

[00:28:23] and it started out so innocently and you know it just it escalated I was able to pay everyone back

[00:28:31] that money that I was out without anyone you know figuring things out I think had it got

[00:28:35] stalled like two or three weeks more there would have been problems but this was it was

[00:28:40] it was what it was so so the people who you so so you're paying people back not out of the profits

[00:28:47] of this new electronics business but out of the investments that people were giving you for

[00:28:51] the electronics business yeah oh no out of out of the out of the proceeds from the electronics

[00:28:57] we were selling electronics in the beginning so right so were you paying back the old party

[00:29:02] investors um yes I was paying back the old parties with the profits of it and then

[00:29:08] and so you so this electronics business was making profit like where were your estimates wrong in the

[00:29:13] electronics business well so what went wrong with the electronics business is they turned out to be

[00:29:18] fake the electronics um and we realized that very quickly and um then apple I mean ebay and

[00:29:27] amazon started banning our accounts and the and the guy we were getting the money from I mean

[00:29:31] guy we were getting the product from couldn't provide the quantity of the product that we were getting

[00:29:38] which is fine in itself because at that point you would have figured that I kind of just went

[00:29:42] and told everyone hey it's not working but instead we kept taking more and more money

[00:29:47] and it just all happened very quickly like in the in the matter of weeks I had like six or $700,000

[00:29:54] in revenue um and in loans but they're all due at a 50% rate of return right and at some

[00:30:00] point your revenue dropped off a cliff because you had no more product and the product you did

[00:30:04] had didn't work yeah and then um wow that's going on I'm just figuring okay I'm 18 years old I have no

[00:30:12] credit um people refinance their homes and take one loan to pay another so until I can figure out

[00:30:18] ways to make money I'll just use one loan to pay off another loan and that's how this you know

[00:30:24] accidental Ponzi schemes formed um because we were taking income like a lender's money and paying

[00:30:31] off another lender but everything was structured as like a loan yeah yeah if you had just structured it

[00:30:37] as without the word of the guarantee if you had just structured it as equity

[00:30:41] you would have been okay there are so many things I could have done I mean if I just

[00:30:45] went to the bank and tried to get a loan on on top of the income we had in the bank or

[00:30:50] anything there's so many options I could have bought real estate but instead I go into the most

[00:30:54] high-risk business ever because simultaneously I'm like okay I want to like be like this big hedge fund

[00:31:01] investing in the startups and I'm investing 250,000 into the concert business again I'm investing

[00:31:08] money into a nightclub I'm doing all these things like a shoe business I invested in

[00:31:15] which are all like sound legitimate investments but the problem was

[00:31:19] none of the things I invested in could generate returns immediately which the business had no

[00:31:24] cash flow the only cash flow was loans so it needed immediate cash flow and everything I was

[00:31:30] investing in was like six months down the line if it was to make any money right and and you

[00:31:36] know technically speaking of course loans are in cash flow yeah yeah loads are not cash flow at

[00:31:42] all and so was there any point where you were like okay I need to make a little I need to spend

[00:31:50] a little bit of this on myself or because you needed to cultivate an image of someone who was

[00:31:54] successful so you could borrow more money like there's Ponzi schemes are complicated in that

[00:32:00] you can't just keep borrowing money either yeah like yes the returns you could return

[00:32:04] earlier investors or lenders from the money given you by new lenders but you also have to

[00:32:09] cultivate this successful image to appear like a success yeah no I always hated like when the FBI

[00:32:16] or the government brought up like saying like I spent money to try to look a certain part it was

[00:32:22] never the case it this was such a short period of time where we were just kids like we're 18

[00:32:28] years old and we're looking at it as like okay we're working for this company we need to get

[00:32:33] a paycheck out of it so like we we took with drew money from the business to pay ourselves and

[00:32:39] that got spent on stupid things like we went on a couple trips and we bought a pair of jet skis

[00:32:44] that like the investors use that I thought was like a business purchase like a business car but

[00:32:49] business jet skis we went to dinners but it was never like you know go buy like a fancy car or

[00:32:57] travel you know to another country or put kids through like college or anything like that or buy

[00:33:02] houses for myself I would say out of the whole amount of money that got brought in I would say

[00:33:09] probably like a hundred thousand dollars got misappropriated out out of this whole amount

[00:33:14] and it was just you know spent on dumb things in a very short period of time when did someone and

[00:33:36] who kind of started investigating like why did the law start looking at you so six months later

[00:33:43] after because this was all over the span of six months this is after like all these concerts failed

[00:33:48] like this new round of concerts that I invested in and no loans were coming in everything was bust

[00:33:55] I finally go to a lawyer and I explained the whole situation and he sends letters to everyone

[00:34:01] all the investors because I gave him a detailed list and at this time with the interest I owed

[00:34:05] like 1.3 million like if everyone got their interest yeah if everyone got their interest

[00:34:10] because people were rolling over their money so this 500 000 turns into 1.31

[00:34:15] 0.4 million it's crazy and his idea is he tells me don't communicate with everyone block everyone

[00:34:23] don't talk to anyone I'll handle this and he sends everyone a letter saying you know the company

[00:34:29] is bankrupt and we're reviewing everything and we're going to work out a payment plan

[00:34:34] everyone was like okay that wasn't really the main issue they were waiting to see for

[00:34:38] further instructions where it takes a turn is he sends out a second letter after reviewing

[00:34:43] everyone's money and people are starting to get letters saying they're owed zero or they owe me money

[00:34:49] because what he did was and this is what the government would do later on say you invested

[00:34:55] ten thousand dollars in principle that you loaned ten thousand dollars and you got

[00:35:00] say interest payments back maybe you got fifteen thousand dollars in interest payments

[00:35:05] and then on your fourth investment you invested another ten thousand dollars and you let that pile

[00:35:11] up until it was turned into a hundred thousand dollars over six months or whatever

[00:35:16] technically you made ten or fifteen thousand dollars because you received those initial

[00:35:21] interest payments so he was taking the people's principal minus whatever they got paid out

[00:35:26] and and saying that's what they were owed he was he was looking at only out of pocket

[00:35:31] from the very first time someone invested which is logical and it's the same thing that the

[00:35:36] government would do years later because no one's getting their interest it's just the principle

[00:35:40] that they lost and that when you send a letter like that to kids that are 18 years old that have

[00:35:47] invested one or two thousand dollars in thinking that they're owed 20 or 30 thousand dollars

[00:35:53] made a firestorm and it wasn't the parents that were mad you know these were the 40 or 50

[00:35:58] or 60 year old parents that were giving me a kid you know 50 grand at a 50 interest rate

[00:36:05] they weren't the ones that were mad it was these kids that thought that they had lost their entire

[00:36:09] life savings that was an imaginary life savings and they went to the police and the police look

[00:36:17] at it as thinking all of these people are owed hundreds of thousands of dollars this is a

[00:36:22] million dollar thing this is crazy there's real estate there was rumors are going around

[00:36:27] that I was selling drugs all this crazy stuff because simultaneously the news is posting that

[00:36:32] I own this nightclub and no one ever really realized like I never owned the building I only

[00:36:38] owned the business which wasn't worth anything so all these things are going around things got

[00:36:43] blown out of proportion and now the damper police department's investigating and me and my

[00:36:48] lawyer go to meet with them and the first interview with them it was one of those sessions

[00:36:53] where we hear everything that they have and they were saying like I spent 500,000 Disney World or

[00:36:58] Universal Studios own real estate and this is before they ever had the bank record so we knew

[00:37:02] they were fishing and they didn't have anything and eventually like someone like one of the

[00:37:07] detectives there like in every story like Wolf of Wall Street whatever had a hard on he had

[00:37:12] connections and like the state's prosecutor declined to prosecute and it went up to the federal

[00:37:18] level and that's just when it this is you know April 2014 I got called to the department of banking

[00:37:26] didn't realize we had a department of banking and I sit down I get subpoenaed and I'm thinking okay

[00:37:32] I'm just gonna go there and explain everything because I'm thinking this was just it's money

[00:37:36] loss like I didn't mean any ill harm I just want to pay everyone back and I sit there

[00:37:41] was your lawyer with you no I didn't have the lawyer that got me into this trouble to

[00:37:45] begin with like with the letters ended up suing me because I owed him $15,000 in legal fees after he

[00:37:51] promised me that the legal fees were free so I had no lawyer I didn't I had Trump PTSD about

[00:37:57] getting a new lawyer I didn't know anything about public defenders anything about this I'm 18

[00:38:01] and I just go and I sit there for six hours telling them everyone every person's name I bring

[00:38:06] the bank records I bring everything and honestly that's probably what gave them most of the

[00:38:11] ammunition at that point and after that you know they're acting like my friends and then after that

[00:38:16] two postal inspector agents pull me the side and they interview me for two more hours and

[00:38:22] they're acting like my best friend and this and that and they give me a target letter which is

[00:38:27] like the official target letter from the FBI saying you're under FBI investigation they give

[00:38:31] this to me after they talk to me which is why they ended up losing that count a trial about

[00:38:38] that I lied to postal inspectors or whatever so after when I got that letter I'm like I need a

[00:38:43] lawyer and I searched on Google best criminal defense attorney New Haven Connecticut and

[00:38:50] that's where it all begins and this is June 2014 at this point.

[00:38:55] I mean you must have been scared shitless like when did you first start thinking you could

[00:38:59] go to jail? I never thought I was going to go to jail until the day you know three years later

[00:39:04] that I was actually going to jail. I just I never thought it I thought the whole thing was just like

[00:39:11] blown extremely at a proportion and that's why I went to trial like I'll die on that sword like I

[00:39:16] never would have went to trial if they just gave me a good deal about pleading guilty pay all the

[00:39:22] money back but they the first offer they gave me was like four years I got more time I was offered

[00:39:27] more time before trial than I got after trial and losing counts at trial which is unusual but

[00:39:34] they would just for whatever reason and this is like this is not a big money case that you

[00:39:39] read about like the Martin Chirkelly's and all these people that owe millions of dollars

[00:39:43] this is you know $480,000 was a net out-of-pocket loss and they spent so much money prosecuting

[00:39:51] two years of multi federal agencies you know investigating every day showing up the court at

[00:39:57] trial the months long trial three or four FBI agents that could be out there stopping like

[00:40:03] you know some real criminals or whatever it was and instead they're going after me was

[00:40:07] like this 19 year old kid. It was just I don't know it was just like I'm not trying to downplay

[00:40:12] it it was just like when you think about the whole thing like they could have just paid off the

[00:40:15] money and then I could have just owed them the money after everything they spent I don't know

[00:40:19] that's not how the world works but it would have been cool if that's how it worked.

[00:40:24] Well I mean at this point were you still what were you doing to try to pay people back?

[00:40:29] So at this point in time I got the idea to reopen the tuxedo junction because it goes out of

[00:40:35] business at that point. I have no money now no money broke in debt and my dad like helps me get

[00:40:44] materials like paint and stuff to fix up this venue and I do all the work myself with a couple

[00:40:50] friends and I miraculously find new investors and I'm able to get this place open and I turn it into

[00:40:57] one of the biggest EDM venues on like the east coast and we start booking these huge acts like

[00:41:03] the chain smokers Steve Ioki crazy acts and the problem was is that it was a brand new

[00:41:12] business it's a high-risk business so you're going to lose money in the early stages which was fine

[00:41:17] and it does become profitable by year two or year three but I can never get ahead because I kept taking

[00:41:24] the good money I'd make from the club and instead of paying the rent or the electric

[00:41:29] I would pay off an old debt to try to make things right and it was just like this spiraling out

[00:41:34] of control terrible money management terrible business skills and it just it wasn't working

[00:41:41] but that's what I was running for three years while I was on trial and and then you know battling it

[00:41:47] out with the FBI so when you when you first got so you got this FBI letter and then presumably at

[00:41:54] some point you get arrested what was what was the arrest like so the rest was in January of 2015

[00:42:01] I was just getting back from like the casino at 4 a.m. I was going to this Yonkers raceway

[00:42:07] and Yonkers New York because I wasn't 21 so I couldn't gamble at the Connecticut casinos

[00:42:13] and I'm 19 years old and I get back it's like a snowy morning and I'm like I go to sleep for like

[00:42:19] an hour or whatever and then there's just like banging on the door loud and I jump up and I look

[00:42:24] out the window which faces the road and there's it like agents tactical vests FBI outfits everything

[00:42:32] that you would see in the movies surrounded the house cars up and down the road black

[00:42:36] SUVs regular cops the whole shebang and everything just happened quickly like my mom opens the door

[00:42:42] she's rushing downstairs they're yelling her step back where is he and they barge into my room

[00:42:49] and at this time I kept getting arrested by local police in regards to liquor violations and things

[00:42:55] related to the nightclub so I thought it was that because my lawyer at this time I had a new

[00:43:00] lawyer he was saying yeah when we knew we knew they were going to indict me but I'd be able to

[00:43:06] self surrender like you see on the news with the celebrities they don't go you know busting down

[00:43:10] their doors like Donald Trump's able to just turn himself in that's what they said I could happen

[00:43:16] they lied about that of course and they drag me out of the house and handcuffs and they stage

[00:43:20] the news there because like what news reporter is going to know what's happening at you know

[00:43:24] five or six in the morning they stage everything they get the whole thing out there they walk

[00:43:29] me out the neighbors are going crazy it's all over like the next door community group just wild

[00:43:35] and then they keep me outside like sitting on the ground for like five or ten minutes until

[00:43:39] the detective that started this whole thing shows up just to say hey you remember me like a

[00:43:45] scene out of a movie and that was the morning and I got indicted on you know 15 counts and I'm

[00:43:52] thinking it's just gonna be like one or two and it turns out to be 15 and and uh did they did you

[00:44:00] make bail like what was the bail set so the bail was $250,000 but in the federal system you're not

[00:44:06] actually putting up money that the main components are are you a flight risk are you a danger to

[00:44:11] the community so if you're none of those you're released um and it was just my dad signing

[00:44:16] that you know if I didn't show up to court they could go after his house but he didn't have

[00:44:20] to bring like the deed or he could have still had a full mortgage on the house you know um they're

[00:44:27] not checking anything he's just signing a sheet of paper and that's it and I was free to go

[00:44:32] and then from that point how many how long was it before you actually have the trial and the

[00:44:37] trial is done and then your sentence so this was January of 2015 I got arrested the trial

[00:44:43] started November of 2015 I was found guilty did you have friends at this point like did

[00:44:48] people hang out with you so I always say like this is the funniest thing about my life is that if you

[00:44:55] took my life and you broke it down into phases like high school I would say the high school business

[00:45:01] then the business of like the concerts and then um the tuxedo junction business and then um you

[00:45:08] know the whole foods when I started working at Whole Foods and then now um the business I do now

[00:45:14] there's always a different group of people that like attach themselves to me and that I'm friends

[00:45:18] with um and that like are like my business partners or like I'm close with for these time periods and

[00:45:24] then the time period ends and I never talked to them again because more likely than not they

[00:45:29] end up screwing me over in some way like the tuxedo guys that I was friends with during the trial

[00:45:34] end up like ratting me out for going out of state to gamble which is how I end up going to jail

[00:45:40] but there was always these different time periods there was always like a different

[00:45:43] girlfriend in these time periods too I was always like a lover boy like relationship type of guy at

[00:45:48] this point um so it was just interesting you know when you're older and you look back at the certain

[00:45:53] memories and stuff and I always sit down and say like when this gets turned into like a documentary

[00:45:58] or a movie or a book one day you can't find one person that can connect every single dot like

[00:46:04] I'm the only one that connects every single person together but like if I if you ask one person

[00:46:09] from 2014 about someone else from 2016 even though the story is connected they wouldn't know each other

[00:46:17] because it's so complex and so and so at this point you're going to trial you still think you're

[00:46:24] gonna be free afterwards why did you think you were gonna be free like you saw the indictments

[00:46:30] probably the indictments you know were largely correct or some of them were correct

[00:46:35] like what were you thinking then so the logic has always been and you know still to this day is that

[00:46:42] one of the aspects of wire fraud which is what I was charged with was you have to have criminal intent

[00:46:49] to be guilty of it so I always held that I did not have criminal intent because it was never

[00:46:53] my initial idea to scam anyone or come up with anything or anything like that like I've met

[00:46:59] people in prison that are genuinely bad people that have that by bad mindset and it just wasn't me

[00:47:06] it was it was so accidental how this whole thing started and how it finished like using the word

[00:47:13] guarantee that's not illegal in the in the jail sense but it feels illegal if you actually don't

[00:47:19] have the assets back or I don't know it's also up to the person signing the contract to believe

[00:47:23] you so what it was that was illegal they tried to make the jet skis like upon like you're spending

[00:47:30] on yourself or what do they actually accuse you of so they accuse me of so there's like there's

[00:47:35] not a law about an actual Ponzi scheme that's not the illegal part the illegal part is using the

[00:47:41] money and so say I promised you I would you gave me 20 bucks I said I would get I was gonna buy

[00:47:49] McDonald's with that 20 bucks you asked me for McDonald's I promised you McDonald's but then I took

[00:47:55] that 20 bucks and went to Burger King without telling you I was gonna go spend the money on Burger King

[00:48:00] that's fraud that's wire fraud because you're doing it like say with a debit say you cashed at me the

[00:48:05] money or transferred me the money or gave me a check that would constitute the wire fraud

[00:48:10] aspect of it what does it mean that you didn't have criminal intent like where does that

[00:48:14] play a role if you still have the fraud so that's just one of the rules that you need to be found

[00:48:19] guilty of like when they break down wire fraud like what it is like you have to I think the

[00:48:25] steps to wire fraud or you have to have interstate transportation of money which is like

[00:48:30] debit card checks a wire transfer anything like that and then number two is you have to have

[00:48:36] the criminal intent to defraud the person so if you didn't have the criminal intent

[00:48:41] what would happen just a massive fine or and you'd have to pay everyone back or like

[00:48:45] what would happen then I mean the jury I mean it's it was a mixed verdict you know there was

[00:48:50] counts where so they took if someone gave me say a hundred thousand dollars they charged me three

[00:48:55] times on it in different scenarios for each time the person gave me money and the jury would

[00:49:03] convict two of those are not guilty and one on guilty so it didn't really add up it didn't

[00:49:08] make sense how could I be guilty of fraud with the same person in one instinct but not guilty

[00:49:13] with the same person on another it doesn't make sense let's say you had the the fraud aspect

[00:49:19] but not the criminal intent what would be the consequence like would you still be guilty of

[00:49:24] something would you get a fine and avoid jail time or what like how how would you be able to get

[00:49:30] away with the wire fraud even if you didn't have criminal intent I mean I think it would

[00:49:34] just come down to if no one reported to you but like I would still found guilty of it that's

[00:49:40] that's what the jury came to because they thought you had criminal intent well they they just found

[00:49:44] guilty whether they thought that or not they still found guilty I see so that that's really

[00:49:49] what it came down to and then were you shocked that they convicted you like what were you like

[00:49:55] but when they when the judge said guilty um so I mean the first I thought I was in the clear

[00:50:01] the first so the first like four charges read were not guilty or or deadlocked meaning it was

[00:50:07] a mistrial on those counts and then they started reading the guilty verdicts um and my heart just

[00:50:12] sank in that moment um but I mean we still looked at as a win in a sense me and my lawyer because

[00:50:19] the the the um prosecution was hoping for guilty verdicts on everything all 15 counts

[00:50:26] immediately took the jury four or five days to convict after several instances where they came back

[00:50:35] to the courtroom and said we can't reach a verdict on this and we were working against the clock because

[00:50:41] Thanksgiving was that weekend on that Thursday and no one wanted to come back after Thanksgiving

[00:50:47] there was a question from one of the jurors what happens if we can't reach a verdict but

[00:50:51] before Thanksgiving and then the judge said it'll be this day in December or whatever

[00:50:57] and then there was another question of this and that and in federal courts if you if the jury

[00:51:04] can't if the jury comes back and says we can't reach a verdict the judge is required by law

[00:51:09] to say I urge you and compel you to go back and figure out a verdict and they went back and

[00:51:15] they had a verdict like an hour later it was ridiculous um but I think we were just working

[00:51:20] against the clock and that wow what a story but there's a lot more to it there's what happened

[00:51:38] to him in jail and then how he reinvented his life afterwards so that's going to be in the next episode