Chapter 1: What types of gambling scams are discussed?
People have gone to prison for game show fraud. That is a bold-faced lie. I'm going 36 months. That's it. 36 months. Are you having a stroke? Hello, Matt Cox. How are you? I am excellent. It's been so long since I've seen you last, but it's good to see you. It does feel like forever. It does. Before we kind of get into the thick of things, are you a gambler? No, I've gambled one time.
No, a couple times. I think I played like two or three hands of blackjack in Vegas. Okay. Yeah.
Chapter 2: How does Tom Simon describe his gambling experiences?
You like Vegas? I mean, I like going to Vegas, but I don't go to the gamble. I go because I like the museums and I like the, you know, you go to... What is it? Hoover Dam. Okay. You can go. I like to do the stuff. Got it. The stuff. Okay, cool. Well, today's episode that we're going to do together, and we'll talk about the game and how it kind of plays out, is themed.
Every story that we're going to talk about involves gambling, either as the centerpiece or peripherally, or Vegas, stuff like that. And so it's kind of a themed episode, Vegas and gambling. Every story is going to involve that. And the way it works is this. I'm going to be asking you a series, telling you about a series of stories.
I'm going to explain to you exactly what the crime was, what the bad guys did, how they were discovered, if I know, the investigation itself. And then you're going to tell me how much their sentence was. And if you're within 20%, then you get a point, and your passing score is 50% of the stories that I'm going to give you today.
You would think that would be easy, but I really bombed the last one. The last one did not go well. It went so poorly, we ended up cutting the episode off with the last two stories because we went a little long, and you were mathematically eliminated from competition. Yeah. Yeah. But we'll see if you can redeem that today.
Chapter 3: What is the structure of the themed episode?
After all, the people watching are your fans, not mine. So I'm rooting for you. I know you don't think so, but I'm rooting for you. It's not me against you. It's you against logic and reason. Sounds good. What state in the U.S., Matt Cox, do you think has the most interracial marriages? I'm going to go with Alabama. Alabama's your guess? Yes. I'm going to guess California.
You're going to guess California? You both would be wrong. Okay. The correct answer is Hawaii. Really? Wait, what kind of interrace? Wait a minute. I was thinking white and black. I know that's what you were thinking, but there are other races. Okay. You got to.
Again, I was an FBI special agent in Hawaii for seven years, and it's a majority Asian Pacific Islander place to be, and a lot of the people there are married across different races. But even within the Asian Pacific Islanders, there are people who, because there have been so many interracial marriages there, who kind of have one foot firmly planned.
You'll have a guy who's half German, half Filipino. And so there's a fellow out there in Hawaii named Jason Pasqua that I investigated, and he was part Japanese and part Filipino to such an extent, and I'm going somewhere with this, that he was the president of the Filipino Chamber of Commerce for the state of Hawaii, and he was the treasurer for the Japanese Chamber of Commerce at the same time.
Okay. He also ran for office a couple times. I don't think that went particularly well. And he was a – I'm not going to say war hero, but he served in the military and was called up to either the Iraq or Afghanistan War during the Global War on Terror and served admirably. This guy was – Exactly like the pillar of the community, you would think.
Like, again, business leader, veteran, local boy. People liked Jason Pasqua. It was very easy when he started offering people investment returns in an investment program. He's offering them 25% to 50% a year, secured by promissory notes. He's offering them 20% to 20%? 25% to 50% investment returns. Returns, yeah. So you invest $1,000, you're going to get $1,500, up to $1,500. It's guaranteed.
That sounds perfectly legal. That happens. Absolutely. And he's writing promissory notes to them with a personal guarantee behind it. So not only was he personally guaranteeing it, which gave people a sense of comfort. The people of Hawaii are lovely people, Matt Cox, but they're not always the most financially sophisticated investors. Very trusting.
And the ones who asked Jason, and they all did, how are you going to make this kind of money? He said, I have this business where I'm going to be hosting... after parties in Las Vegas and the after parties in Las Vegas are going to have a cover charge on the door at nightclubs in Vegas. So Beyonce goes to concert in Las Vegas.
We're going to host the after party that the celebrities will come to as well as the people who went to the concert and we're going to make a fortune and you're going to get 25 to 50% of your money. The people of Hawaii love Las Vegas. A skeptical person would make some comment about Asian people and degenerate gambling. I'm not going to say that because everyone makes their own decisions.
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Chapter 4: How do gambling scams impact communities?
It's legal in Las Vegas. So when they go on vacation from the nicest place on planet Earth, arguably in Hawaii... They're going to Vegas. To Sin City. To Sin City to gamble.
It was funny that they all stay in the same, like, three hotels in downtown, and so they see all the same people they knew in their community in Hawaii, and they spend all the time there eating, like, Spam Musubi and Hawaii food at these casinos. Anyway, he's offering this Las Vegas after-party investment program. He's saying it's going to be filled with celebrities and models.
He wants to share his wealth with his investors. 29 different investors kicked him $1.4 million. Wow. They gave him. And the twist ending is that he'd not spend this on hosting after parties. But he did spend it in Las Vegas gambling and drinking at nightclubs. He gets the bottle service at the nightclubs.
You know that thing where you're kind of behind the rope and you and your friends are kind of chilling out on the couch and they bring you like a bottle of liquor, Dom Perignon or whatever. Right. Not my thing. That was his thing. Jason was a guy who was always willing to pick up the tab. With other people's money. Well, sure. I mean, as far as anyone knew, it was his money.
And to be fair, some investors received money back from Jason, investment returns. But those investment returns were not being derived from any income-producing activity, Matt Cox. They were being derived from the principal investments of themselves and other investors in what we call... A Ponzi scheme. A Ponzi scheme. By definition, that's what a Ponzi scheme is. Did you know...
what Ponzi said, how Ponzi said he was raising his money? Charles Ponzi was working an arbitrage scheme off of postage stamps. International postage stamps. Yeah. He figured out that you can buy an international postage stamp for this much, but an actual U.S. stamp was a different price, and the difference between those was how he claimed he was going to be making his investment returns.
Didn't buy any postage stamps. But he quickly realized that there's more money to be made by the actual Ponzi scheme itself. The structure of it goes back to ancient Greece. Yeah, yeah. For some reason, the name just sort of stuck with Charles Ponzi when he was ripping off the people of Boston, I think it was. It used to be called the Peter Paul scam. Is that right? Yeah.
Robbing Peter to pay Paul. Makes sense. Yeah. That's exactly what Jason did. And so the net loss, because that's the number which matters to you and matters to the courts, is $1 million, right?
So he took in 1.4, $400,000 of that was recycled back to the investors to create the illusion of investment returns, which also has the benefit to the bad guy of allowing people to talk about how they got investment returns and allowing the scheme to spread a little bit virally.
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Chapter 5: What happened to Mr. Freeze and how did he defraud investors?
He's probably still life coaching. Ridiculous. They can't take that away from you. And he's a life coach. He's a life coach. Imagine the people he was able to help in prison. Oh, my God. Imagine. What's funny is that he received a discount for being a pretty good sports gambler. Oh, yeah. Had he lost it all, he would have gotten more time. Yeah. What a world we live in. You're a painter. I am.
Which means you are a man of great imagination. I am. You are. So I want you to imagine this. Wouldn't it be amazing if we lived in a world where we could power our homes and vehicles with biodegradable waste?
Chapter 6: What were the consequences of the gambling scheme?
So you could charge your phones, maybe your Teslas, with rotting banana peels, rotting apples. What a world that would be. It would be great. It would be so good. So good. And that was the promise of a company called Alternative Energy Holdings, run out of Euclid, Ohio, by 65-year-old Jonathan Freeze. Mr. Freeze. Mr. Freeze. Mr. Freeze.
He was going to build energy plants that ran off of biodegradable waste, and he starts selling short-term notes with high interest rates to fund this infrastructure project. Okay. Do you know what the rate of return is? Oh, I happen to know the rate of return and all that. Also, to give everyone a sense of comfort, he personally guaranteed the investments. There you go. No way you can lose.
This is coming out of my own pocket if you lose your money. I'm Mr. Freeze. I actually don't have the interest rates, but they were high. Right.
Chapter 7: How did Adrian Kawuba's investment scheme operate?
Unreasonably high? I think they were probably certainly higher than you would get in other investments, but I don't think it was like triple your money in 90 days or I'd have that information. He brought in $2 million from 22 individual investors. Okay. Who were excited to make some real money turning organic waste into energy. They were men of imagination as well, just like you, Matt Cox.
He said that the money would go toward building this green energy plant. Spoiler alert, it didn't. He used the investor funds to go gambling and to buy designer clothing and eat at expensive restaurants. No money was repaid. Nothing was ponzi'd back to the victims. And the money did not go to a green energy plant.
So everyone's dream of running their Tesla on an Apple core went right down the toilet with their money. I feel like you're mocking Tesla owners. No, Tesla's real technology. Tesla will run. But try plugging that Tesla into a machine with a bunch of rotting banana peels in it, basically a compost bin, and you're going to have issues.
The FBI and the postal inspectors joined forces to investigate this case jointly, and Mr. Freeze was charged with fraud. He pled guilty. Now, the likelihood of coming up with $2 million in restitution seems pretty remote.
Chapter 8: What was the outcome of Adrian Kawuba's case?
But the likelihood of him serving time in prison was a very real reality. The question for you, Matt Cox, is how much time is Mr. Freeze, the man of great imagination, going to do in prison? 41 months. 41 months. That's a lot. You seem fixated on that number. It's a lot. It's a lot. I'm going to go 30. I get $2 million. Yeah. I don't know. $2 million. 22 investors, though. 22 investors. Yeah.
These are, I think, 40. I think 41. 37 months. I'm going to go 37 months. 37 months? Am I going the wrong way? There's no right way or wrong way. You've got to follow your heart. We don't know if he had a criminal record. I don't get that impression. 30... 41... 37, 36 months. 36 months. Wow. I'm getting whiplash. 36 months. 36 months. Nice, even three years in and out. Yes.
Same amount of time it would take to go to law school. Three years. Yes. Is law school three years? Yeah. Oh. I mean, unless you're going to night school, which takes longer than that. But if you're going full-time in law school, it's a three-year program. And you're thinking he did three years for stealing $2 million from 22 investors, which is 36 months, right? Yes.
Just making sure we're on the same page because you're moving... 31 months. Oh, Jesus. We were almost there. 31 months. 31 months. 31 months. You think the difference between 36 and 31... I'm going 36 months. That's it. 36 months. Are you having a stroke? 36 months. 36 months. Stop talking. I'm going to break it to you gently. Okay. You'd be right either way. 30 months is the sentencing.
So 36 and 31 are both within 20% of 30 months. He did 30 months in prison. Okay. You're good, buddy. You're good. I think that caffeine has really hit your hypothalamus at this point. Okay. You were falling asleep a half hour ago. You drank half of a ghost caffeinated drink. It wasn't helping that Colby was going... People have gone to prison for game show fraud.
I didn't know this was a team sport. No. Well, you know, after the last time, we had to wait the white flag. You want to see the boss win? He could have helped me out the last time. Jesus, he let me fucking just twist in the wind. All right, we're doing good. We're doing good. No more. Story nine of 12. Nine of 12. Matt Cox. Elvis fan, yes or no? Yes.
We even interviewed a guy that bought one of Elvis's airplanes. I heard. And turned it into a bus. And that episode went gangbusters. Yeah, yeah. It's amazing. Yeah. But I'm curious about you. Are you an Elvis fan? Yeah. Have you ever just listened to his music? No, I'm not looking out. I was really an Elvis in my 20s. I still like Elvis. Yeah, I like him. I like it.
In fact, there's a theory out there that the world can be separated into two types of people, Elvis people and Beatles people. Which would you fall under? You can like them both, but you're either an Elvis man or a Beatles man. Which are you? I mean, I would probably pick Elvis. You know, I just...
You know, probably because I don't think there's any of his songs that I don't think are good or like. Or there's some songs from the Beatles where I'm just like, you know, like Sergeant Pepper and stuff like that. There's some of them that I'm just not interested in. The more kind of orchestrated. Yeah, I'm just not interested. Yeah. You ever go to Graceland? No. Where is Graceland? Memphis?
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