Episode 58: Money for Nothing | Fraud in Paradise

Case File

American Greed #58: Loan Scam & Fraud in Paradise
Preview two new cases of American Greed. Norman Schmidt spent a lifetime moving from one get-quick-rich scheme to the next. He stole millions until a trusted employee brought him down. Next, Hawaiian mortgage broker James Lull claimed there was big money to be made by fixing bad credit scores. But his investors' money went straight into a veritable museum of collectibles.

Case 1: Loan Scam: Money for Nothing

  • The Con Man
  • Norman Schmidt called himself an investment manager. He started the Denver based Capital Holdings firm and solicited investors, offering the deal of a lifetime. He claimed to invest clients' money in bank debentures and offered amazing high rates of return.
  • Rocky Mountain High Life
  • Schmidt lived a life of luxury. He purchased the famed Redstone Castle outside of Aspen. In his spare time, he managed a NASCAR race team, owned eight racecars and stored his cash in some 60 bank accounts around the world. But Schmidt was funding his luxurious lifestyle with other people's money.
  • The Scam
  • For Schmidt, Capital Holdings paid off and by the fall of 2002 he was making more than $2 million a year. But a secretary in his office became suspicious and contacted the FBI. She believed Schmidt was stealing investor deposits.

Case 2: Hawaiian Punched: Fraud in Paradise

  • The Mortgage Broker
  • In 2006, James Lull was living the American dream in paradise. He was a mortgage broker on the Hawaiian Island of Kauai. Lull knew which of his clients had money to burn and began offering side deals to make quick cash. Investors were promised a huge rate of return in a short amount of time. But there were no real deals.
  • The Collection
  • The charismatic Lull lured in more than 50 investors and made millions from his scams. He used the money to fund his collections of jewels, rare coins, sports memorabilia and jewel-encrusted pool cues.
  • The Scam
  • Lull stole millions but showed no regrets. Dozens of investors lost their life savings. The FBI closed in and Lull agreed to accept responsibility, pleading guilty to wire fraud. But when its time for sentencing, James Lull was missing from the court.

Web Extras

  • Undercover Probe     Monday, 19 Mar 2012 | 12:00 AM ET

    Watch a particularly uncomfortable moment when an undercover FBI agent asks Norman Schmidt why he included a suspicious clause in his investment contract.

  • Private Lending: High Reward, Higher Risk? Wednesday, 21 Mar 2012 | 10:21 AM ET

    Peer-to-peer lending is gaining in popularity. Find out how to protect yourself against scams like the one  a former mortgage broker in Hawaii pulled on his victims.

  • Lull's Jewelry Collection     Monday, 19 Mar 2012 | 12:00 AM ET

    Ron McCully of The Diamond Banque in Bellevue, Washington, remembers James Lull pawning off some of his jewelry in the months leading up to his disappearance.

  • Two riveting cases of American Greed. The death of private equity manager Danny Pang is almost as mysterious as his life. Pang dies almost a decade after the murder of his wife, ex-stripper Janie Pang. Was he involved with her death? And, the story of ¿The Bling Ring.¿ It reads like a Hollywood script--a gang of teenagers rob celebrity homes and steal millions in cash and jewelry from celebrities.

  • Schmidt's Superseding Indictment Monday, 27 Aug 2012 | 2:58 PM ET

    Read the government’s charges against Norman Schmidt and his associates in this superseding indictment.

  • Bankruptcy Trustee Charges Monday, 27 Aug 2012 | 3:14 PM ET

    Read some of the charges made by the bankruptcy trustee just days before Lull’s disappearance, claiming he was hiding valuable jewelry and more from the court.

  • The Collection Monday, 27 Aug 2012 | 3:15 PM ET

    See Lull’s collection of opals, pool cues and more.

American Greed Showtimes

Murder in Memphis
Saturday, April 26th 1a, 3a ET/PT
Check the U.S. TV schedule for additional showtimes.

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