Last summer I went to the Chester County Book Store in West Chester, Pennsylvania to pitch my book, The Biggest Scam You Never Heard Of at Pitchapalooza, which was billed as “American Idol for authors (only without Simon.).”
The creators of Pitchapalooza are the husband and wife author team of David Henry Sterry and Arielle Eckstut. Approximately 25 contestant’s names were picked at random, and each person selected would have a maximum of 60 seconds to deliver a pitch of their story. But not one nano-second longer than 60 seconds!
The advertisement said that the Pitchapalooza winner would be introduced to a literary agent who is appropriate for their book – who would help them get published. That caught my attention right away. It’s something that I was trying to figure out how to do for the past year. I’ve had a potential non-fiction story that’s been gnawing at my insides for over 5 years, and I was hoping this might be the forum for my project to finally gain momentum. I was in the process of writing a book proposal by using a template that a published writer friend – Randy Radic – had sent me. But if I could figure out a way to win Pitchapalooza, it seemed like I could cut out the middle man and get a direct introduction to a literary agent. Which – as an aspiring writer – is like getting fixed up with the hottest girl at the party.
Now I had to get prepared to go into battle. I’ve worked in financial services marketing and writing for over 15 years. I’ve written everything from national TV commercials at Aegon to website content for Vanguard and executed complex marketing plans for other companies in between. I’ve always worked well with deadlines – often thriving with them. When I was a writer at Aegon, I remember conceiving the guts of a TV commercial on the back of a bar napkin at Flannigan’s Boathouse near closing time. That TV commercial – originally sketched out on the napkin – eventually generated millions of dollars in premiums for Aegon. But that seemed easy…because I was writing about fictional characters in a life insurance commercial…not about my own personal story about being a victim turned Federal Witness in The Biggest Scam You’ve Never Heard Of.
About my story… I was one of thousands of victims in the largest securities fraud in U.S. history involving a privately held company – National Century Financial Enterprises (NCFE). The fraud started in the mid-1990’s and was exposed in 2002 when $3 Billion of funds was suddenly missing from NCFE’s accounting bank accounts. (Whoops!) NCFE was essentially a bank for over 300 healthcare companies. NCFE soon filed for bankruptcy, creating a vortex of financial doom that sucked in over 275 of their healthcare client companies, driving them into bankruptcy as well. This included the healthcare software company where I – and thousands of other people – invested our hard-earned money.
In 1999 – thinking everything was smooth sailing – I started investing in one of NCFE’s partner companies…a high-flying publicly-traded software company that NCFE and their pals secretly owned, controlled and eventually looted.
Based on slick press releases and insider message board hype, my fellow investors and I were a fraudster’s wet dream – buying stock at a frenzied pace – like heroin addicts going on a year-long binge. We didn’t have needle marks on our arms, but we had empty brokerage accounts and wallets that were in pain.
Unbeknownst to my fellow shareholders and I at the time…the company we invested in was a technology company with no technology (vaporware)…funded by a bank with no money (NCFE)…listed on a stock exchange with lax rules (American Stock Exchange)…overseen by a government agency with no perceived teeth (Securities & Exchange Commission). In hindsight, my fellow shareholder victims and I never had a chance, as we became lambs led to the slaughter.
By November 2002 – $3 Billion of investor funds was discovered to be missing from NCFE’s bank accounts – prompting the FBI to swiftly raid NCFE’s offices in Columbus, Ohio. It was now painfully obvious that my fellow shareholders and I had our financial throats slit by the NCFE crooks and their pals. The scam was being referred to as “The Enron of the Healthcare Industry” by a few bloggers. I had lost a pile of dough – over 6-figures – as well as lost my faith in humanity. Now I had a choice. I could wallow in self-pity, or become an empowered victim and try to help solve the crime. I chose the latter.
On the Yahoo financial message boards, I created 25 unique aliases to stir the pot and to attempt to draw out information from anyone who would provide it. I hit the jackpot. Company insiders – along with their friends, enemies, and ex-spouses – started discussing what they knew about the fraud. Insiders were actually casting the blame at each other…and in some cases…providing details about how their former alleged cohorts (and spouses) were involved in the scam.
As I continued to post my findings, I made dozens of friends – and enemies – on the Yahoo financial message boards. More importantly, the predators were now becoming the prey. In 2006, I received a death threat from one of the company insiders, based on my fact findings and aggressive message board postings. When the death threat didn’t shut me up, some of my Yahoo message board aliases were sued for slander by a company insider.
Being sued was something that wasn’t in the gameplan. I didn’t have the funds to hire a hot-shot greaseball attorney to defend myself. So I improvised. I was about to become something I despised as much as a politician, a telemarketer, or a used car salesman. I became a practicing California attorney and successfully defended myself against a frivolous lawsuit. Armed with only a Broadcast Journalism degree from Penn State and the stubbornness of a mule, I became victorious, and I’m currently 1 and 0 as a practicing attorney!
My work on the message boards was gaining the attention of Federal Agents – and I couldn’t have been happier. In September 2006, I gave my Grand Jury testimony to a DOJ agent and an armed Postal Inspector in Room 420 of the Hampton Inn in Lionville, PA – about 100 yards from where I played Little League baseball 30 years earlier. Talking about my knowledge of the scam was one of my favorite pastimes. During downtime in my first 5-hour meeting with the DOJ, we also talked about sports, Philly cheesesteaks and offshore money laundering. I had a blast with the Feds! They loved my knowledge of the scam and I loved their fight for justice.
My personal investigation continued. My Dad always told me that spreadsheets don’t lie – so I used them to chart my data. I scoured old SEC filings and other online financial documents, and discovered a slew of insider trading data. Sometimes insiders held company stock in their girlfriend’s or kid’s names…and sometimes they held it in layers of obfuscation within family trusts. According to some insiders who tattled on each – some of the proceeds from the stock sales were illegally moved overseas. One husband and wife team – nicknamed “The Bonnie & Clyde of Penny Stock Scams” – used a family trust, held in the wife’s undisclosed maiden name, to attempt to throw people off the scent. But I was developing the nose of a German shepherd (better late than never) and was learning how to think like these jokers…and pick up their fraudulent scent.
Once, during my lunch break, I found out how some of the company insiders secretly funneled approximately $100 Million in shady stock sales through a tiny P.O. Box in Beverly Hills. It was not their only suspicious activity. Not by a long shot.
The DOJ Agent who took my Grand Jury testimony described me as “an air traffic controller of information”. I had become somewhat of an Information Broker, and was adept at getting the right information into the right hands – especially with the Feds. That DOJ Agent also said that if the scam was a game of Trivial Pursuit, that I “would clearly be the winner.” He has become a good fried of mine over the years.
Along my quest for the truth, I wore many hats, including: mortician, private investigator, attorney, fisherman, air traffic controller, therapist, computer hacker and priest. My Pennsylvania Dutch heritage would come in handy. Aside from having tremendous bacon cravings and wide feet, we’re known for our off-the-charts stubbornness and determination. I was not going to stop until my mission was accomplished.
By 2010, a dozen people connected to the scam went to prison for securities fraud, money laundering, tax fraud and witness tampering. Their sentences ranged from 5 to 30 years. It ended up being one of the most prolific and colorful scams in U.S. history, but it never quite gained the national attention of other colorful scams like Bernie Madoff, Enron, WorldCom and Tyco. I was hoping to change that. Which is why I knew I had to attend Pitchapalooza and hope I’d get the chance to tell my story.
Once I committed to attending Pitchapalooza, I knew I had to get prepared…pronto. I was reverting back to my high school and college days, when I got an adrenaline rush from doing homework at the last minute. For some reason I seemed to thrive in the creative process when I was knee deep in chaos. Which I was.
The night before Pitchapalooza, my first practice pitch timed out at 2 minutes and 37 seconds. Ummm…Houston, we have a problem! It reminded me of an appearance by Dolly Parton on The Tonight Show with Johnny Carson when I was a kid. She was talking about her top-heavy figure, and how sometimes she was prone to wardrobe malfunctions. Dolly described it as trying to fit 20 pounds of potatoes into a 10 pound sack. I could relate. I had quite a few extra potatoes in my pitch that I need to deal with. But by the next morning – a few hours before the event – I had gotten my pitch down to a consistent 58.5 seconds…and all my potatoes were accounted for.
At the Pitchapalooza event, I first bought David and Arielle’s book – The Essential Guide to Getting Your Book Published. Then I was hoping I would be one of the 25 or so lucky people that would be randomly drawn to give their pitch. I knew that even if I didn’t get called, I had just bought a really helpful book, which came with a special 20-minute phone consultation with David. Not a bad deal at all. Suddenly I heard my name called to be “on deck”…and I got a little nervous.
When I’m on deck in a softball game, I know exactly what to do. Swing a bat a few times, stretch, scratch myself, and maybe spit at something on the ground. It’s familiar turf. As the on deck person at Pitchapalooza, I stood apart from the group, about 20 feet from the podium while the person ahead of me did their pitch. I didn’t know what to do. Should I try to seem confident? Or would that be perceived as cocky? Oh crap…now I was starting to get nervous. What if I looked too nervous? Thank God I could stand behind a podium. It would keep people from seeing my leg twitching. I tried to keep calm with some deep breathing…which only made my heart beat faster…like a little bunny. Then I just thought to myself…dude, keep it together. You’ve no better or worse than anyone here. You’re just a guy that wants to tell a story…
Before I knew it, I was called to the podium. It was show time. I hoped my preparation served me well. Then I gave my pitch:
In 1999, I invested in a company that ended up being part of the largest securities fraud in U.S. history involving a private company. $3 Billion was suddenly missing – then the company went bankrupt.
I went from being poor to a millionaire to completely broke by 2002.
Rather than wallow in self-pity, I became determined to find out how I got scammed. I went undercover on a financial message board using over 25 different aliases to meet other victims and gather information.
I became a self-taught expert in money laundering investigations. Once during my lunch break, I pieced together how one of the crooks secretly laundered $100 Million through a PO Box in Beverly Hills.
I received a death threat from one of the crooks in 2006 then became a Federal Witness. Along the way I assumed the roles of coroner, fisherman, therapist, private detective, computer hacker, air traffic controller, librarian and attorney.
In the end, I helped justice be served. My story is called: THE BIGGEST SCAM YOU’VE NEVER HEARD OF
It’s Erin Brockovich meets Boiler Room meets Invincible. You’ll laugh…you’ll cry…you’ll clutch your wallet in fear.
I heard someone exclaim: “Wow!” It was David – the co-host of Pitchapalooza! I took that as a good sign. After my pitch, I got some preliminary positive feedback from the David and Arielle (a.k.a. The Book Doctors) as well as from 2 other judges. Then I waited for the rest of the participants to give their pitches.
In the end, I was one of 2 winners chosen. The other winner was a teenaged girl who had pitched an idea that I think was geared to the youth market. Our pitches and backgrounds were night and day…and it was all good. I was just happy that my book project just cleared about 5 major hurdles in a matter of minutes.
As a winner, David and Arielle had plans in place to introduce me to a prominent literary agent in New York City who they worked with on a regular basis. I couldn’t believe it was really happening, but it was. I was officially on the road to becoming a published author. I was finally getting the forum to tell my crazy true story about The Biggest Scam You’ve Never Heard Of…and my role in it.
Since then, David has given me outstanding guidance in preparing my book proposal and marketing plan. I’m not quite finished, but I’m almost there. Then David will deliver my finished book proposal to the waiting literary agent. (When David told me who it was…I looked up his agency…and I was very excited. He’s a heavy hitter with an outstanding reputation.) I’m looking forward to becoming a successful graduate of Pitchapalooza…and I couldn’t have done it without the guidance of David and Arielle and their book – The Essential Guide to Getting Your Book Published.
Thank you David and Arielle for the wonderful experience of Pitchapalooza! I hope to do you proud as I work through the necessary hurdles to become a published author!
John Gregory Dommel
P.S. Please follow my journey to getting published…on Facebook, LinkedIn and Twitter. Thank You!
http://www.facebook.com/pages/The-Biggest-Scam-Youve-Never-Heard-Of-by-John-Gregory-Dommel/187811404605655
http://www.linkedin.com/groups/Biggest-Scam-Youve-Never-Heard-4140365
http://twitter.com/gregorydommel
