A “friend of a friend asking on behalf of another friend” asked me to help finance part of a building acquisition. “Michael” wanted the loan arranged through his representative, “Jay”. The amount requested was $1 million. With great flourish, Jay told me about Michael, who was requesting the money. I learned of Michael’s great wealth, his private jet, his boats, his cars, and his mansion. Michael was a big-time player, and we should give him what he wants.
Jay told me that Michael had made his fortune by creating a company that facilitated credit card payments in South America; a sort of Latin American PayPal. After Jay told me about Michael’s toys and wealth, I asked him why a guy like Michael needed this loan. Jay gave a vague response about Michael needing a tax break on the interest, but did not elaborate further.
We never applied for the loan, mostly because Michael himself did not ask, and because it was a hard request to take seriously. Our bank president laughed when I told him about it.
Interestingly enough, Michael went on to become a contestant on Bravo Television’s “Millionaire Matchmaker”, but it ended badly. He later explained that he could not find a woman who could, “…deal with my lifestyle”.
Later, prosecutors announced charges against a banker at another bank for accepting $25,000 from Michael to write a false letter on bank letterhead stating that Michael had $20 million on deposit. This letter was used to help Michael obtain another bank loan.
It turned out that the company Michael founded had virtually no sales or revenue. His wealth was gained from fraud, from banks and investors.
Michael pled guilty to charges of wire fraud, bank fraud, mail fraud, and conspiracy. He is currently serving an eight year sentence in federal prison.
Moral of the story: To be taken seriously, do not ever, ever, ever flaunt wealth while initiating a loan request. More importantly, if you make your living by fraud, you will be caught, or spend the rest of your life looking over your shoulder. Most likely though, you will be caught.
**NOTE: All “Bankable Stories” were written by One Click Advisor founder James Chittenden and are true stories of clients that he assisted as a business banker. Names have been changed to protect client confidentiality, however, news coverage of this individual rendered his identity public.