Original subtitles

This is a CNBC original.

In this episode of American Greed, he makes millions by hooking customers

wanting a better sex life.

The Smiling Bob campaign has to go down as one of the more memorable of a

generation. Taking advantage of their sexual insecurities, Stephen Warshak

illegal charges on the credit cards of thousands of customers.

I was upset and I was angry that they did this to her, put her in this

situation.

And later, an investment manager takes on the toughest clients, retired NFL

players, and steals their money.

$150 million vanishes before the FBI moves in.

We found that they only had about $200 ,000 under management.

But when he's tackled for a loss, will his game go into sudden death?

The investors, particularly the NFL investors, were so mad at him that he

afraid for his own personal safety.

This is Bob.

Millions have seen the commercials featuring the character known as Smiling

The ads are filled with innuendo about why he's so happy. And, of course, by

end of the ad, you know why he's so happy, because he's using Enzyte and

making all the women in his life very happy.

A little more self -esteem and a very happy Mrs. at Home.

Billing itself as the once -daily tablet for natural male enhancement.

Enzyte wants to appear to be the herbal answer to Viagra.

Everybody knew about Smiling Bob.

The product started to show up on the shelves of Walmart and Walgreens and

The mastermind behind Enzyte's success is Stephen Warshak, a 37 -year -old

entrepreneur.

His supplements business is bringing in just shy of $250 million in revenue.

more than 50 % from the sales of Enzyme alone.

It seems Warshak is living the American dream, but it's all about to come

crashing down.

Warshak's story begins in Cincinnati, Ohio in 1996.

Berkeley Nutraceuticals is hatched in his basement.

Pretty much a shoestring operation.

They were working in a basement office. It was him, his mom, a couple friends

from college, and they were taking orders over the phone, running credit

People who work with Warshak attest to his sharp business skills and say he can

be very persuasive.

I think people who worked with him will tell you he was charismatic. They

followed him.

They believed in his vision for the company.

Warshak vision durable to buy.

Something to enhance the lives of millions of men without having to get a

doctor's prescription.

To get his products noticed, Warshak plows most of his money into

Since their target was men, they would advertise in the back of men's

And I think they have stuff in Outside Magazine, Playboy, Penthouse.

Warshak's early ads are tasteless and make over -the -top claims.

They were kind of crude, sometimes kind of funny. It'll make you harder than

Chinese arithmetic.

You know, I'm sure they got some attention from people flipping through

magazine. These early ads work well enough, but Warshak wants to attract

customers.

Enter Smiling Bob.

The ads are eye -catching, well -produced, and loaded with innuendo.

When it comes to wood, it always helps to listen to an expert.

The wonders of wood are brought to you by Enzyte.

Worsak buys time on major cable channels and sports networks.

It gave him a credibility that the other herbal supplement companies didn't

have. As opposed to finding it on the back of some men's magazine, they're

seeing this thing advertised in a very slick way on TV, not unlike the As for

Viagra and other legitimate pharmaceuticals.

Warshak is bringing in approximately $100 million.

He rents a large office and warehouse just outside of Cincinnati and increases

his staff.

Besides Insight, Berkeley produces a host of other supplements, claiming to

everything from increasing energy to managing weight.

There's even a pill to boost women's libidos.

But Insight is its cash cow.

Ryan first hears about Insight in 2001.

He asks that his identity be concealed.

They said it would basically increase your size up to 24%. After a time,

the blood flow would actually increase the size. The vessels will actually

stretch. They said most men experience an increase in length and roundness

within three to four weeks.

The commercials promise a double your money back guarantee if customers aren't

completely satisfied.

If you ask 99 out of 100 guys, would you like to be bigger?

They're all going to say yes.

So, yeah, I was curious.

And I thought, well, nothing to lose.

Brian logs on to Berkley's website and gives his credit card information.

He pays $400 for an eight -month supply of enzyme.

Customers like Brian are keeping Berkeley in business.

And business is good.

Very good.

The company is bringing in more than $100 million a year.

President and CEO Stephen Warshak has struck gold.

He had a great business sense. He was a genius at marketing.

He knew exactly what it took to get customers into the fold.

Warshak may know how to attract customers, but can he keep them happy?

Brian becomes disgruntled shortly after his shipment of enzyme arrives.

The first shipment was actually incomplete.

They sent me only just a partial shipment.

Brian eventually gets the rest of his order.

But on his credit card statement the following month, he sees Berkeley has

charged him an additional $122.

But Brian has already paid in full.

Now he is out $522.

Brian calls the company.

They said, well, sure, no problem. We'll go ahead and process that.

The following month, it had not been taken off, so I called them up again.

Well, it takes a while to get these things processed.

It could be a few weeks. Third month, same thing.

Brian calls customer service repeatedly over the next six months before the

charges are finally taken off his credit card.

Adding to Brian's frustration, after taking Insight for eight months, he

it doesn't work.

I went the entire eight months, just like they advertised.

You know, I'm willing to give them the benefit of the doubt.

Maybe it would take longer for me, I didn't know.

Nothing happened.

No, there's no change at all.

Brian contacts the Better Business Bureau and learns he's not alone.

Several hundred consumer complaints have been filed against Berkeley.

This was something of a Jekyll Hyde operation that, you know, on one hand,

looked like a legitimate operation with national marketing and presence on cable

TV. But at the same time, you had, with that kind of volume of complaints, you

knew that something was wrong here.

When American Greed continues, Berkeley's business practices attract

attention from the media and the feds. Federal prosecutors and postal service

and the FBI, everybody started jumping in.

They're all wondering, are customers getting the shaft?

In 2003, 37 -year -old Stephen Warshak's company, Berkeley Premium

Nutraceuticals, is making $100 million in annual sales.

Its male enhancement pill, Insight, is the top -selling sexual enhancement

supplement on the market.

From the outside looking in, Warshak appears to be a success story.

Behind closed doors at Berkeley's corporate headquarters, it's another

The impression of the company from an outsider or somebody new, you think, oh,

what a nice company.

This is nice. And they pay me every week.

John Bradley works in the call center.

All of a sudden the phones would ring and you knew at that time that there

be an ad playing somewhere to call for your free sample.

Because everything would light up as far as telephone calls and noise.

Call center employees read from scripts which explain Berkeley's so -called

continuity program.

It's an agreement stating customers will keep receiving the product and be

billed for it unless they call to cancel.

Once you get your free sample, if you don't call within 30 days, you're going

get billed for a three -month supply.

We had to tell them that if...

they didn't call and cancel, they would automatically be billed. The continuity

program is essential to Warshak's business.

He sends numerous emails to his top executives stating that automatic

billing is the lifeblood of the company.

Initially, John is impressed with Warshak's business sense.

Well, he's obviously a good businessman because the phones were ringing off the

hook. I personally thought that he was a very bright guy, and I just thought he

was a go -getter.

Soon, Bradley is promoted to shift leader in the customer service

That's when he starts to suspect something isn't right at Berkeley.

Customer service reps are reporting a high volume of calls from dissatisfied

customers.

It's got to the point you're almost on a first -name basis with the people

calling in.

The problem?

They're getting insight, and they don't want it.

Customers try to cancel, but their credit cards are still being charged.

In most cases, the amounts are between $1 to $200.

And month after month, their losses are starting to pile up.

The continuity program has become a scam to entrap customers.

I told Warshak, give these people credit.

And he would say, oh, I wasn't aware.

I wasn't aware of that.

He was aware.

He knew.

But he was a real bright guy.

So I knew he knew.

Warshak attributes the botched credits to typical growing pains of a company

that expanded as quickly as Berkeley had.

He assures John the credits will be taken care of. But they aren't.

Michigan residents Ellie and Bob Price come to know all about Berkeley's

continuity program.

In 1995, 29 -year -old Ellie learns she has to have major surgery.

She was getting cysts on her ovaries, so she had to get a complete hysterectomy.

Ellie's surgery goes well, but as a side effect, her hormone levels decrease,

and with them, her sex drive.

And I would just tell her, you know, don't worry about it. It's okay. Once we

get this thing figured out with the hormone replacement, I'm sure things

fine.

But Ellie becomes frustrated.

Then, in 2003, she hears an ad for Avlamil on the radio, the Berkeley

that claims to boost women's libido.

Ellie orders a free one -month supply.

The lady told her this is just strictly a sample pack to try the product and see

if she liked it, if she liked it, she could order more after that, and that

needed the debit card number just for shipping and handling.

But Ellie believes Avlamil does nothing.

Since she doesn't call back to order more, she's surprised to get another

package the next month.

And the next month.

Each time, an automatic withdrawal in the amount of $35 is debited from her

checking account.

Ellie calls Berkeley several times and gets nowhere, so Bob steps in.

I explained the situation.

I told them that whatever they had done was fine, that, you know, just if they

would stop sending the product, that we wouldn't worry about it any further.

But the monthly charges keep piling up for Bob and Ellie.

and countless other customers.

In 2003, consumer complaints against Berkeley are building, with thousands

at the Better Business Bureau.

Cincinnati Magazine illustrates Berkeley's troubles with a comic strip.

Berkeley was considered the worst offender in the area of business

The uproar causes several federal agencies to take action.

With the U .S. Postal Inspection Service leading the way, the FDA, FBI, and IRS

team up and begin a criminal investigation.

Their focus?

Berkeley's illegal billing practices.

Continuity in and of itself is not illegal.

What Berkeley did was they set up a continuity program that didn't disclose

it was a continuity program.

Berkeley sets up several roadblocks when people try to cancel.

Callers are asked to provide documentation of their sexual history.

When you would have to write a letter documenting your sexual history in order

to get a credit?

Something wrong there.

Who's going to do it? You just say, ah, forget it.

Some callers are told to contact Berkeley's vice president of customer

Michael Johnson.

There's just one problem. Mr. Johnson doesn't exist.

I don't know who Michael Johnson was. Maybe there was a Michael Johnson.

I just told my people to take the call that they were taking the calls from

Michael Johnson.

Later, I figured out there wasn't a Michael Johnson.

In other cases, unsatisfied inside buyers are asked to submit notarized

from their doctors.

verifying that their penises haven't grown.

Ellie Price, who takes Berkeley's female sex enhancement product, knows this

game all too well.

The gentleman on the phone told me that before they could take my wife off this

supplemental treatment that I would have to have her go to a doctor, get a

physical, and get a clearance.

And my response to him was, did you have a doctor put her on this treatment?

Bob knows Berkley is scamming them, and the circumstances are starting to take a

toll on his marriage.

We had a couple arguments over the situation.

I was unhappy that she thought she had to do something like that.

I was upset and I was angry that they did this to her, put her in this

situation.

In 2003, Stephen Warshak and several of his top executives are served with

subpoenas.

A short time later, Warshak begins to raid Berkeley's coffers.

From January to November 2004, he deposits $7 .7 million into his and

his wife's bank account and another $16 .5 million into a personal

account. He was just very arrogant about it. Somehow or another, he thought that

he was going to get through it all and be able to pick up where he left off.

and that these charges would magically go away.

When American greed returns, will Warshak and his arrogance be able to

prison?

On March 16, 2005, with a search warrant in hand, 50 armed agents from the U .S.

Postal Inspection Service, FBI, IRS, and FDA descend on the headquarters of

Berkeley Premium Nutraceuticals.

They brought in a number of trucks. They loaded a large number of boxes of files

and computers and hard drives and hauled them off to a secure location.

Officials removed seven tons of evidence, including 24 laptops, computer

drives, marketing plans, even the unopened mail.

In all, the government takes 13 ,500 documents.

The raid results in a 112 -count indictment against Warshak and his top

September 2006.

Fourteen of the company's executives, including Warshak, his mother, his

and his brother -in -law, are charged with federal crimes including fraud and

money laundering.

Federal authorities believe that between 2001 and 2006, Warshak and his top

execs took $100 million without customers' consent by repeatedly billing

credit cards for refills they didn't order.

I think in the eyes of the government, the company went beyond just making it

difficult for people.

It directly tried to mislead people. It went to great lengths to keep people

from returning product.

And most importantly, it went in and took charges on people's credit cards

without permission.

And that was a huge problem for them to get past.

In January 2008, Stephen Warshak goes on trial.

It's one of the biggest consumer fraud cases in Ohio history.

Warshak's lawyers assert that all charges can be attributed to mistakes

when a company grows from zero to $200 million in less than eight years.

And Warshak's entire argument was that this company was growing so fast, we

couldn't keep up with some of the problems that were developing.

We did our best. We worked hard to fix it. But sometimes we didn't quite do as

well as we should have done.

I don't think that you accidentally start ripping people off and scamming

I think that that's what he created, and that's what he intended to do.

In the end, it's a mountain of damning emails, impossible to defend, that would

ultimately bring Warshak down.

In one email...

Warshak writes, I don't care if the card is taken from Grandma's purse so Junior

can buy some insight. If the card is good, I want a ship.

But the most damning email is written by Warshak's nephew, Jason Cosman.

In it, Cosman sketches out a plan for wringing yet more money out of

He suggests that after customers cancel their orders, Company reps call them

back pretending to represent a hospital offering a cheaper and more effective

product. The poor customer bites, Kosman writes, thinking he's getting a better

deal, but he's actually getting taken for a second time.

Kosman goes on to write, the scheme is beautiful.

Dreamed it up after many a bong hit one night. These customers are fish in a

barrel, man.

Exploit their shit out of them.

This is what the company was about. It wasn't about selling a product. It was

about exploiting people.

Warshak has forwarded the email to five Berkeley employees.

In the subject line, he's written, The student has become the teacher.

Our company was built on this kind of creative thinking.

Thanks for the wake -up call, Jason.

At trial, his defense team argues Warshak forwarded the email to others as

joke. I think the issue for...

Federal prosecutors became, you know, this is in the middle of all of this,

know, uproar going on about the company, and yet he's still telling people that

this is the kind of thinking that we want to embrace.

The prosecutors made a pretty strong case that his actions supported what he

said in that email.

On February 22, 2008, Stephen Warshak is convicted on 93 counts of conspiracy,

fraud, and money laundering.

Judge Arthur Spiegel, who presides over the case, says Warshak was motivated by

greed.

The judge made a point to say that not only is he taking money from people, but

he's preying on their insecurities.

And that seemed to bother the judge, that this was something that he knew he

could exploit.

While most of his top executives have gotten one - to two -year sentences,

Warshak doesn't get off nearly so easily.

He's ordered to pay $494 million in forfeiture, and he's sentenced to 25

years in federal prison.

25 years is a long time, especially, again, when you consider that no one

everything. You know, nobody lost a fortune here. Nobody went bankrupt. But

was petty theft on a massive scale.

Michigan residents Bob and Ellie Price never recovered their losses, but for

Bob, it wasn't just about the money.

The money wasn't really the thing that motivated me. It was the way I was

treated by these people, and it was what they did to my wife.

Berkeley customer Brian decides to take his fight one step further. He takes

part in a class -action civil lawsuit against Berkeley.

The company ends up settling for $4 .7 million.

I was awarded $17 ,000.

I'm glad they had to pay me. I'm glad they had to pay the other people in the

class. You know, they're counting on people putting their money down and not

saying anything about it.

I actually decided to stand up to these guys and say, hey, this is wrong.

I don't care what kind of embarrassment I have to go through. I'm going to get

my money back from you guys.

Enzyte is still on the market. The product itself was never deemed harmful

consumers, just Berkeley's business practices.

A new company called Byanda has purchased Enzyte.

And smiling Bob, he's still on the air eliciting chuckles.

Looks like it's all first class from here.

And helping to rake in millions.

Atlanta, southern boomtown, where people know how to enjoy the finer things in

life.

But even here, the lavish wedding party thrown by hedge fund superstar Kirk

Wright was a bit over the top.

There were, you know, bars carved out of ice, three of them, where you could

have champagne and lobster and sushi and everything else in the world.

The reception goes on even as Wright's hedge fund is on the brink of collapse.

Only a sociopathic personality can conduct himself in that manner.

The wedding party is Kirk Wright's last tango.

When Wright exits the stage, he leads the FBI on a national manhunt.

Kirk Wright grows up in the Bronx, New York.

It was clear that he was sort of an individual who had pulled himself up by

bootstraps. He wasn't born into affluence or anything like that.

He came into a little bit of money because, unfortunately, he had a bad car

wreck.

And there was a settlement from that.

And he initially started investing that money when he was 19 and 20.

The settlement from the car wreck also helps put him through graduate school.

He gets a master's degree from Harvard in 1995.

A year later, Wright forms International Management Associates, or IMA, to

operate hedge funds.

Calvin Paris, the father of one of Wright's Harvard classmates, invests

,000 with Wright in November 1999.

That got into his investments for the month of December.

And when I got my monthly market value for December, I had $145 ,000.

An unbelievable increase in one month. The market is hot, but Wright's return

astronomical. Wright's financial prowess does not go unnoticed.

He got introduced through mutual friends and investors to these two guys in

Atlanta who were anesthesiologists.

who had an entrepreneurial bent and were looking for a place where they could

branch out a little bit more from the business of being doctors.

Within a year, the two anesthesiologists are not only invested, they persuade

Wright to relocate to Atlanta.

The city had grown by a third in population from 1990 to 2000.

There was a lot of business opportunity, but there was a very high cultural

comfort level for people who were black and young professionals.

As it turns out, the 30 -year -old is in the right place at the right time.

There was a lot of money to invest.

There were relatively few hedge funds, and very, very few that were run by

African Americans.

So in some ways, there was a need that was just waiting to be met here by

somebody like Kirk Wright.

The two doctors use their contacts to tap professionals like themselves,

with ample wealth and little time or expertise to manage it.

So when people like Mr. Wright are able to come to him and use terms, you know,

margin calls and short sales and options trading, and throw out the big word,

the person's heard that word before, they might not completely understand it,

but they think, well, he's using the right terms.

But even savvy investors get hooked as well.

In 2001, Los Angeles -based real estate developer Roger O 'Neill agrees to meet

with Wright.

He seemed like a very knowledgeable, articulate guy, and he told me a little

about his background, that he was from Harvard.

By the end of year 2002, I had pretty much liquidated most of my portfolio

my investment group and transferred it over to International Management &

Associates.

Eventually, O 'Neill has $13 million in IMA accounts.

Little do he and other clients know, a portion of their money is being drained

off. An enormous amount of money, over $10 million, was basically the

defendant's own personal checkbook.

That's what the defendant was living out of, this so -called expense account.

But Wright appears to deliver the goods.

Statement from his Taurus Fund.

Trumpet annual returns as high as 20%. Returns that high attract plenty of

attention. Wright continues to work his game.

Mr. Wright was able to get two NFL football players who were retired to

work for him.

And this led to them going out and getting some of their friends that were

the NFL to also invest.

One of Wright's new hires is former Denver Bronco defensive star Steve

He convinces other players to buy in, and Wright does the rest.

None of the NFL players involved would talk to American Green.

The experience with IMA is an embarrassment they want to put behind

Up next, what happens when football players get ripped off?

Kirk Wright is about to get blitzed.

Atlanta hedge fund manager Kirk Wright is building a financial empire.

He claims to have a secret recipe for stock market success, but he's not

his investors what it is.

And that's the classic conundrum of hedge funds.

How much transparency do you have to have for your investors versus giving

your secrets?

International Management Associates grows to $84 million.

All under Kirk Wright's personal management.

He lavishes attention on investors and potential clients.

He was spending a ton of money on travel and entertainment type expenses.

flying people out for football games here at the Georgia Dome, showing them

he was a successful businessman.

He is spending on himself, too. There is a new house for his wife and son.

When they purchased it, the front looked about like it does now. However, the

entire back 20 feet or something did not exist.

And they spent five and a half years adding on to the house.

Building the pool and a great deal of work. They added marble floors, gold

fixtures.

His garage is filled with luxury cars.

A Bentley, a Jaguar, an Aston Martin, a BMW, and a Lamborghini.

It's an almost cartoonish version of modern success.

But his home life is not picture perfect.

In 2003, his wife files for divorce and leaves with the boys.

She says that Kirk has changed, and she doesn't want to be a part of this new

life.

On the business side, some clients are wary of Wright as well.

Calvin Paris asks a lawyer to evaluate him.

He came into the office with Kirk, and he walked out feeling that everything

okay. I came away with reassurance.

of any doubts that I have. But Wright is covering market losses with cash from

new investors.

To keep IMA's statements looking solid, he resorts to something beyond creative

accounting. He just made them up. He just took a template off of the Internet

that the brokerage companies provided to the investors so that you could track

your own investments.

He filled it out, sent those in, and passed them off as actual statements.

According to the government, Wright's employees aren't running the scam.

They talk him into letting them form a more transparent division of the

During its creation, an accountant uncovers something shocking.

While Wright was reporting more than a 3 % gain in two of his funds, the company

had actually lost value to the tune of 24%. The staff demands answers.

The core group of anesthesiologists and football players asked for this

confrontation, asked for this sit -down meeting, where Kirk Wright just wouldn't

disclose any details.

And things became very acrimonious very fast after that point.

Wright tries to calm them with a $155 million account statement.

But he won't let any of them examine the document.

Atwater and other insiders start planning exit strategies.

It's never been completely disclosed who leaked what to whom when, but it was

very soon after that a tip came in to the SEC that something was awry at IMA.

But Wright clearly thinks the best thing to do is pretend nothing's wrong.

On October 22, 2005, he and his second wife throw that over -the -top

wedding.

He had to know that spending $500 ,000 on a wedding, he had to know on some

level that that was not a smart move.

The honeymoon is soon over.

In December, Wright starts to give investors the runaround.

Payments had been missed, checks had been bounced, and investors had started

become very concerned that the money just was not there.

And that was the point where Atwater said, He just felt physically sick.

He knew that something was desperately wrong, and he had brought many of his

friends in on this, and it was getting ready to break very bad.

In an interview with Bloomberg News, Atwater states, In my wildest dreams, I

never thought he was stealing money.

2006 arrives in a downward spiral.

Investors get no further than the receptionist when they call.

I asked her, what's going on? And she said, oh, everything's fine. Just a

shakeup in the company.

But everything's fine. Don't worry about your money, Mr. Praris. Your money's

safe. By February 2006,

Kirk Wright will flee Atlanta.

Next, with the feds on his trail, will Wright take the money and run?

Or will he take a permanent vacation?

In January 2006,

International Management Associates of Atlanta still looks like a good

investment. Its manager, Kirk Wright, claims the company has more than $150

million under management. That month, retired businessman Alan Ehrlich follows

up on a tip to check IMA out.

I read all the paperwork. I called people for references, and everything

checked.

Unfortunately,

His million is the last money invested with IMA.

In Atlanta, everything is about to go down the drain.

Investors who want payments are getting the runaround.

Throughout the month of January, unfortunately, Kurt gave me excuse after

of his business, that it was year -end, they were putting together all their tax

information, that the operations had a lot of ongoing activity.

A key group of investors, retired and current NFL players, band together to

demand their money.

Kirk Wright stonewalls them.

Mr. Wright told the players, you'll get your money next month.

Oh, I've had a problem with the banks. It'll be the next month.

And then finally in February, they realized they probably weren't going to

their money.

On February 17th, the players go to court. A judge quickly freezes IMA's

Ten days later, the Securities and Exchange Commission files charges

been working on as well.

When the FBI raids IMA's office, Wright's computer is missing.

So is he.

Well, it's not exactly road rage, but there was living room rage.

You know, we heard that.

The FBI and the SEC move in to recover what they can of IMA's assets.

But there is less than $200 ,000 left.

Even by the standards of forensic accountants who had seen Ponzi schemes

they found surprisingly little.

They found the physical office desks, chairs, valuables at the office,

file cabinets. They didn't find much more at all.

In the meantime, the FBI is hunting the man responsible.

For three months, they chase every lead and check every possible hideout.

But this is a fugitive case with a twist.

While in hiding, Kirk Wright is giving interviews to the Wall Street Journal.

He was calling us from a cell phone that was non -traceable, throwawayable, but

still saying, well, I'm not on the run. I don't have anything to hide. I'm just

being careful of my movements.

Mr. Wright's explanation for that was that the investors, particularly the NFL

investors, were so mad at him that he was afraid for his own personal safety.

It was highly unusual to be reading about conversations in the paper that a

fugitive is having with a reporter claiming not to be a fugitive when at

same time we are doing everything we can to locate him.

Even on the run.

White -collar criminals typically maintain the lifestyle to which they

become accustomed.

That is certainly true of Kirk Wright.

On May 17, 2006, the FBI catches up with him, lounging in a lap of luxury.

And at the time of his arrest, he was laying by the pool at the Ritz -Carlton

South Beach in Miami.

By all accounts, didn't appear incredibly surprised to be found.

He was just writing out the remaining days until, you know, the web did

tighten in on him.

The 35 -year -old is checked in to different accommodations.

In May 2008, Kirk Wright goes on trial for 47 counts of fraud and money

laundering. Former partners testify against him.

His basic defense is that his losses were basically legitimate trading

We always had a dispute with everyone, the government, the SEC, the bankruptcy

trustee, as to what the total amount of the loss was.

This was a defendant who made his living by convincing people to part with their

money, basically be a salesman, and that's what we argued to the jury that

was trying to do, basically to them, was sell them a story.

The government wins the argument. On May 21, 2008, Kirk Wright is convicted on

all counts.

The man, who so recently was on top of the world, seems to take the verdict

composure. We met with him 15 or 20 minutes after that.

And he seemed pretty upbeat at that point for someone who had just lost a

and a grueling trial.

He'll have to wait three months for sentencing, but he knows it could run

hundreds of years.

On one level, this is a very...

Proud and confident person that it's hard to imagine spending the rest of

life in jail with no possibility of ever getting out. And no quality of life

that resembles the affluence and riches that they had.

At the jail, he is placed on a heightened watch, as all recently

inmates are.

But guards don't watch him 24 hours a day.

Three days after his conviction, Wright ties one end of a bed sheet around his

neck. and the other around the top bunk in his cell.

By the time the guards make their next check, Wright has made his final exit.

He is dead, and so are his clients' last hopes of recovering much money from the

fraud. We figured that the only other leverage we would have is for him to

basically get a reduced sentence based upon the cooperation of letting the

authorities know who else was involved.

and where the money went. I would say that, you know, Kirk, he ruined lives.

I mean, there's 500 investors.

A few assets, Wright's house, cars, and office equipment can be liquidated.

That all takes a long time, so I don't know that there's a final answer to that

question right now as to how much folks are getting back or can expect to get

back, except that I think, as everyone knows, it's likely not to be anything

close to 100 cents on the dollar.

His second wife is allowed to retrieve only her personal possessions before the

house is auctioned off.

Investors are simply out of luck.

71 -year -old Alan Ehrlich's plans for retirement had to be scaled back.

His wife had to return to work, and now he lives in a rented condo. This was

money that, you know, you plan on for the rest of your life, and you're going

earn a certain return, and then you can live, and that changed, obviously.

Other investors think Wright's suicide was his final selfish act.

A case of justice denied.

Not angry.

Not angry.

Disappointed. I wanted to visit him. I wanted to visit him in prison.

And I would have. I would have been at the sentencing.

So I got robbed.

I got robbed, figuratively and literally.