Original subtitles

In this episode of American Greed, Mike the Situation Sorrentino makes his

mark starring in the notoriously over -the -top reality TV show Jersey Shore.

Virtually overnight, he morphs from musclehead to millionaire.

You saw me like, oh, I got this Ferrari.

I was buying stuff, buying lots of stuff. He was like a rap star all of a

sudden. Sorrentino's character is a walking hyperbole.

100 % bad boy.

Sometimes when I think of Jersey Shore, I remember it as an animated show

because it had a lot of that aesthetic to it.

But when Sorrentino applies that reality TV swagger to real life and fails to

pay taxes on nearly $9 million of income, much of it in cash, the

real, real bad.

Well, in 2011, I can tell you that he did not file a tax return at all.

nothing wrong with being paid in cash.

What's wrong is if you don't report your income to the IRS and pay your fair

share. And later.

Joe Mellie says he's the guy with tickets to all the hottest shows. He

events that everyone wanted to go to and that were very hard to get tickets to.

Hamilton. You couldn't get a ticket to Hamilton in this city.

Mellie straddles two worlds, Wall Street and the music business, and tells

investors that he has special relationships with famous artists and

He was the guy who could get...

you know, Billy Joel on the phone or could get a deal with the producer of

Hamilton or could get a meeting with the people at Harry Potter.

Investors will lose nearly $60 million because while Mellie may dress in cheap

clothing, he confesses the truth about himself when he writes, the wolf is on

the way.

In September 2014, a notorious reality TV bad boy heads to court. Former

Jersey Shore reality star Mike The Situation Sorrentino is out on bail

arrest on federal tax fraud charges.

The Situation and his older brother pled not guilty in federal court today for

filing bogus tax return.

on nearly $9 million in income.

He made a lot of money, and apparently Uncle Sam wants his cut.

Mike, the situation Sorrentino, is a character viewers love to hate. So the

schadenfreude is laid on thicker than his hair gel.

When the situation was asked about the case, he responded, quote,

The seeds of Sorrentino's downfall

are sown long before anyone has ever heard of the situation.

Seaside Heights, New Jersey is a classic American beach town with a boardwalk, a

Ferris wheel, and giant fiberglass statues that seem eerie once the crowds

gone.

One store stays open on the boardwalk year -round.

It's a t -shirt shop run by Danny Merck, whose life is about to change with an

unexpected visit.

Some big guy knocked on my door early in the morning and said, would you be

interested in renting out your house for a reality TV show? They said there's

going to be a reality show about a bunch of Italian kids. They're going to rent

a house.

for the Jersey Shore for the summertime.

They said, could you get all your stuff out in a span of 24 hours and gave me a

check. And I was like, no problem.

And TV history was made.

The premise for Jersey Shore is simple.

Take eight 20 -somethings who love to party, rent them this beach house, and

encourage them to let loose their animal instincts.

I always considered Jersey Shore kind of like what it would be if you had humans

in a zoo.

Robert Thompson is a distinguished professor of television history at

University.

Today, he is hosting a luncheon screening of Jersey Shore ten years

premiere. I'm starting with what I consider the definitive Jersey Shore.

The situation goes out to a club. That's pretty much what they do all the time.

He finds an attractive young woman. And it's like, you know, you're coming home

with me.

He takes her home to the house.

He situates her in his bed, in his bedroom.

He leaves her there, and he goes and has a full meal.

And then when they're done having sex, he says, I ordered you a cab.

And he kicks her to the curb. And then he does a fist bump kind of thing when

comes back up.

What's so fascinating is we're seeing people who don't let the constraints of

civilization determine what they can and can't do. It's like we've taken human

life and we've stripped it of all those rules. And when you think of it that

way, it's kind of fascinating to watch.

When the first episode of Jersey Shore premieres on December 3rd, 2009, it

in an impressive 1 .3 million viewers and also a maelstrom of controversy.

Much of it from Italian -Americans offended by the use of the term guido.

Guido applications accepted over here.

We're either mafioso or with this we're bimbos and buffoons.

Despite the blowback, within a few weeks, MTV has a bona fide hit. And

soar after the notorious fifth episode in which Nicole Snooki Polizzi gets

punched in the face.

I don't mean to downplay people hitting each other, but you also notice the

manipulative dramaturgy going on here. How many times have we heard the word

blood? And her mouth was bleeding and blood was all over me. There's all this

blood. There's all this blood. How much blood have you actually seen so far?

Like none.

Ratings grow. And by the next episode, 3 .2 million viewers tune in. For a basic

cable show, that's a big, big audience.

There are a couple things going on in the world. There's like, you know, the

in the Middle East. You know, there's the economy and then there's the shore.

You know what I'm saying?

It's fascinating.

It is a pop culture phenomenon. It really is. There were two ways people

generally responded.

They made fun of it and they embraced it with an ironic, kitschy delight.

The other way to respond to it was to be outraged that this was a mark that we

were truly at the end of civilization as we knew it.

But in both cases, audience members were watching. There was a certain pleasure

in watching something so outrageously idiotic.

Mike, the situation Sorrentino becomes one of Jersey Shore's breakout stars.

Though born on Staten Island, New York, Sorrentino is raised in the Garden

State. After graduating from Manalapan High, Sorrentino goes to work in a gym.

Thor Lentino will later tell his humble origin story to NBC's Today Show. I

started sending in pictures to New York City pretty much in my underwear.

And eventually I got a call back for a pilot and I got that pilot role and we

did the pilot. And I actually had to wait six or eight months for that pilot

even get approved.

So imagine hanging on to like a dream for six to eight months and you don't

know it. You don't even know once you actually get that show for D &B popular.

This is the kitchen where all the partying happens. Everyone pregame here.

Mike was actually a good cook.

Danny Merck plays the boss at the T -shirt shop where the Jersey Shore cast

members work.

That's where everyone would square off and also argue, you know.

Tammy and Jenny had their big fight here.

He also owns the house they stay in during the show.

Well, I met Mike by accident beforehand.

Mike thought I was a producer, and he leaned over to me and says, I want you

call me The Situation.

I was like, who is this guy? He wants me to call The Situation? What a dumb

thing to be called.

But honestly, what genius. He branded himself, marketed himself, and he's been

known as The Situation forever.

Sorrentino claims his nickname comes from his chiseled abdominal muscles.

One summer day, he says, a woman is so mesmerized by his abs that she leaves

boyfriend for him, creating a situation on the beach.

I don't know if this is show and inside he's insecure or something like that

because, you know, he's working out all the time. He's got big arms, a six pack.

You know, he always looks like Rambo and stuff. So, you know, maybe he's

insecure inside, but he was very self -confident and very full of himself all

the time and thought every girl loved him.

The most important part of his personality was that he was a

You can hate on me all you want to, but what can you possibly say to somebody

that looks like Rambo pretty much when he's turtle?

I mean, he was like Narcissus, the Greek god, in that he absolutely was in love

with his own image.

And millions of Americans are in love with the show.

Season 1's final episode reels in nearly 5 million viewers.

And it's clear that Jersey Shore is more than just a hit show.

I couldn't believe it. You know, it was unreal. People were, like, crawling at

the doors, clawing at it, trying to get inside the house, knocking, screaming,

thinking that the cast still lived at the house. I couldn't live there

It was doors rattling all the time, people banging on the windows.

It penetrated the culture in major ways. Most people knew about Jersey Shore

whether or not they'd ever seen it.

the cultural penetration of that show way outweighed the actual number of

watching it.

Nothing says fame like the president giving a shout -out at the White House

Correspondents' Dinner, pretending he's announcing a break on a new tax on

tanning salons.

The following individual shall be excluded from the indoor tanning tax

this bill.

Snooki, JWoww, The Situation.

In season one, Jersey Shore cast members reportedly are paid peanuts.

They make about $200 a week from working at the Shore store.

In season two, each cast member gets a raise to $10 ,000 an episode.

And by season three, the real money comes in. The number is reportedly $30

per episode.

And it soars to the $100 ,000 per episode range by the final season.

It's very interesting to watch them also progress. You know, their attitudes

change from also, you know, Mike begging to bump $10 off me for a cigarette, and

then all of a sudden now he's buying a new Rolex every day, you know? Things

change real quick.

Mike Sorrentino sees an opportunity to make money not just through Jersey

but by seizing the day and turning his 15 minutes of fame into a brand.

I think the wise thing for all eight of them would be to say, this is not going

to last forever, and however I can monetize it and, you know, do it while I

would be a wise thing to do.

And I think that's certainly what the situation did.

Up next on American Greed, from gym rat to millionaire.

But where is the situation's money going?

Or more importantly, not going?

Oh, my God. Thank you so much for having me.

Well, you're a hit. I mean, you have become iconic in our landscape. I'm

flattered. Thank you. Mike, the Situation Sorrentino, becomes a

almost as soon as Jersey Shore hits the air.

But he wants to become a lifestyle brand.

He takes one tried and true step by publishing an autobiography.

And now that star is out with his first book, aptly titled Here's a Situation, A

Guide to Creeping on Jicks, Avoiding Grenades, and Getting in Your GTL on the

Jersey Shore.

What a title, babe.

GTL stands for Jim Tan Laundry.

A bit on the show that Sorrentino parlays into a lifestyle mantra.

GTL, baby. Jim Tan Laundry.

Do you have this body throughout?

Was the body the whole ticket? You think about a celebrity, you think about

their attributes.

Cardi boy, ladies man, good looking without a shirt, good looking with a

People want to be where the situation is.

Robert Strand is an expert in celebrity branding and licensing.

By 2010, when he was coming into the height of his popularity, that's when

was the height of activity, trying to license Mike the situation.

He says Mike Sorrentino makes some straightforward deals, including

endorsements. in which he is paid to promote a product.

Usually the endorsement deals are in the six -figure range. The vitamin water

commercial was pretty funny. I don't know that it created any longevity for

people wanting to drink vitamin water. I would safely bet that it probably

failed at that time.

Now, this was Mike's reel for all five pieces.

Danny Merck, who plays the boss, sees a Cinderella -like transformation in

Sorrentino.

Mike never really liked to work that much, but he always wanted money and

stuff, and he was always, like, kind of, like, scratching. He was waiting for

the next paycheck all the time. Then the next year he came back, you know, these

guys were making appearances on nightclubs and stuff like that.

According to the Hollywood Reporter, Sorrentino commands $10 ,000, $20 ,000,

sometimes even $50 ,000 for a single appearance at a bar or nightclub like

one. They all of a sudden were coming into money, and people were giving them

stuff all the time.

I remember sitting inside the house and a box full of, you know, clothes showed

up, designer clothes.

Just wanted them to wear that stuff.

And it was different. I saw a change from ashy to classy.

Sorrentino also strikes licensing deals in which he sells rights to his name and

image in exchange for the percentage of revenue.

One such deal is for Devotion Vodka, which Sorrentino promotes at this party

Las Vegas.

And I think

that that deal had a significant impact

on Devotion's brand. I think they went from being a small player in the

to a $30 to $50 million brand with that endorsement.

Once the situation becomes a bankable asset, he is managed by his older

Mark Sorrentino. When the money started rolling in, Mike and his brother Mark

formed a few different business entities to receive income from the various

business ventures.

One of them was MPS, which is initial, and that was a partnership, and it was

formed jointly with his brother, Mark Sorrentino.

Then there was Situation Nation, which is an 1120S. It's an S corporation.

And the money keeps rolling in. The Situation has his own workout video, a

nutritional supplement at GNC, a line of Situation -branded formal wear, and

a comic book character is in the works.

From 2010 through 2012 alone, Mike Sorrentino received approximately $8

.9 million in gross income.

So it was a pretty fast, pretty lucrative time in his life.

I was like, this guy's got everything with his name on it, GTL and Mike

situation and all that stuff. So he was definitely making money every which way.

He was also spending every which way. He was showing me, like, oh, I got this

Ferrari. I was buying stuff, buying lots of stuff. He was like a rap star all of

a sudden.

Though he has big guns, he's got no ammo when it comes to financing.

Sorrentino's assets are the kind that lose value as soon as you drive them off

the lot.

Mike and his brother Mark would keep these luxury cars outside of their

townhouses. They lived near each other, and the parking lot was just filled with

Ferraris and Lamborghinis and all kinds of other luxury cars.

Pictures of it, it's a riot. It's like Lamborghini in his driveway, Porsches

here, a Bentley here, a Jeep here.

The neighbors could not have been happy.

Sorrentino, or at least the persona he creates on the show, may act as though

he's above the law.

But the feds beg to differ.

Up next, a question of fairness.

That's absolutely insane.

Listen, I'm making less than $100 ,000 a year, and if I can pay my taxes,

somebody like that should be able to pay their taxes.

Crazy.

Along the Jersey Shore in Asbury Park, Corey Tequila tends bar.

Yep, you heard that last name right.

It's pronounced Tequila. And I'm a bartender.

Being able to talk to so many different faces and getting to know your customers

and what everybody does and the stories that they have to tell you, it's just a

really fun experience.

I am paid hourly, which would be, I believe it's $2 .13 an hour.

And I also get paid in tips.

Tequila says at the end of every shift, he records his tips in the bar's point

-of -sale system.

And over the course of a year, he has to make sure he's saving enough to pay

Uncle Sam a tax day.

Come April, when we need to pay X amount of money, if you don't have that, like,

you spent it all in a bad situation, you know.

Speaking of a bad situation,

Mike Sorrentino also gets paid in cash.

Lots of it.

There were a significant amount of payments made to him in cash.

And those cash payments came primarily from his personal appearances.

50 % of the appearance fee would be paid up front in the form of a check.

And the remaining 50 % would be paid at the time of the appearance. And that

payment would be made in cash.

At one appearance, the Sorrentinos would receive as much as $10 ,000 in cash for

a single night. And there's nothing wrong with being paid in cash.

What's wrong is if you don't report your income to the IRS and pay your fair

share.

The U .S. Attorney's Office and the Internal Revenue Service will not reveal

they begin to suspect that Mike and Mark Sorrentino are not paying their fair

share. But when they open an investigation, they see many red flags.

Well, in 2011, I can tell you that he did not file a tax return at all. And

the years 2010 and 2012,

IRS agent Cheryl Matajica finds that the Sorrentino brothers drastically

underreport their income.

What we alleged to be false for 2010 was that he only reported, and he being

Michael Sorrentino, a little over $200 ,000 in income from the business.

So that would have been for MPS.

And in 2011, he didn't file, so that would be zero.

And then in 2012, it was a little over $100 ,000, and that would have been

completely from Situation Nation.

Three years, $300 ,000 of income reported.

The problem is Sorrentino's actual income in that time period is $8 .9

That's absolutely insane.

Listen, I'm making less than $100 ,000 a year, and if I could pay my taxes,

somebody like that should be able to pay their taxes.

It's crazy.

The $8 .9 million in income does not include deductions for business

But the Sorrentinos run afoul of the law here, too, according to the U .S.

Attorney's Office.

Well, what happened was the accountant that they worked with, was essentially

writing off personal expenses as legitimate business expenses, expenses

luxury car payments, payments for clothing, payments for grooming

had, at one point, three Ferraris, two Lamborghinis, a Porsche, two

BMWs. They had matching Bentleys for Mark and Mike.

and a few other various cars that they would drive around and claim as business

deductions on their taxes.

Fans of the sitch might argue that it was an honest mistake.

After all, he's never claimed to be the world's most savvy businessman.

But Agent Madagika says the evidence shows that Mike Sorrentino knew what he

doing, that he was deliberate and calculated in his tax evasion scheme.

When he received the cash, we see him going to the bank, going up to the

and actually making the cash deposit into the account.

And it was normally more than one account to thread out the cash deposit.

Cash deposits of more than $10 ,000 trigger a federal currency transaction

report known as...

CTR. It's nothing negative. It just tracks the large cash deposits and

withdrawals. And a lot of people will try to avoid this because they are

trying to hide their income from the IRS or somebody else.

And so they think that by splitting their deposits.

into multiple accounts, as long as they keep each individual deposit into the

account under $10 ,000, that it won't generate the CPR.

Making multiple deposits to avoid triggering a currency transaction report

federal crime known as structuring. And the feds say the situation did a lot of

structuring, tooling around New Jersey in one of his Lambos.

So March 28th, he goes into the bank and he makes four deposits.

into four different accounts.

And as you can see here, three of those four accounts are just under the $10

,000 mark.

And then the total deposits in general were $36 ,000 and change.

It's a pattern Sorrentino repeats many times.

Call it GTLS, Jim Tan Laundry Structuring.

When you consistently do it over a period of time, that's what forms a

and that's how we prove our structure in cases.

In September 2014,

Mike and Mark Sorrentino are charged with conspiracy to defraud the United

States government and filing false tax returns.

For Professor Thompson at Syracuse, it's more evidence that reality is very

different from this reality TV show.

The situation getting arrested.

We would have expected him to get arrested for some bad boy thing.

He got arrested for tax evasion, which is like the wimpiest thing to get

arrested. What we saw and what we made of these characters is, of course, not

what they really were. On the show, the situation shamelessly revels in bad

behavior. But in real life, the Sorrentinos try to cover up their

financial records that were saved in QuickBooks program.

After the grand jury subpoenas had been served on the Sorrentinos, Mark

Sorrentino had gone into the QuickBooks records and altered the records.

Mark Sorrentino reclassifies taxable income as loans or other non -taxable

income. He did this so the QuickBooks records would be...

similar to the information he filed in his tax returns.

Mark Sorrentino apparently doesn't realize it, but just like the ubiquitous

cameras of Jersey Shore, everything is being recorded.

In QuickBooks, there is something called an audit trail function where you can

see all the changes and modifications that have been made to a file. When the

agents looked at it, they saw down to the timestamp every single thing that he

changed.

That was that.

In April 2017, additional charges of structuring and falsifying records are

added. After months of pretrial wrangling, Mike Sorrentino pleads guilty

count of tax evasion.

And Mark Sorrentino pleads guilty to one count of aiding in the filing of a

fraudulent tax return.

Mike is sentenced to eight months.

And Mark is sentenced to 24 months in prison.

The judge cites Mark's attempt to cover his tracks as a reason for a longer

sentence.

The man who made a fortune acting like the rules don't apply to him learns the

hard way that they do.

As he live streams his ride to prison for the Jersey Shore reboot Family

Vacation, the situation seems to have lost some of his swagger.

He's not looking happy.

He looks like he's scared.

He serves his time at Otisville Prison and gets out on September 12, 2019.

Mike Sorrentino declines to speak with American Greed.

If the situation has a second act, it's a safe bet the feds will be taking notes

and hoping Sorrentino has learned how to pay his fair share.

The government is definitely one of the victims and the taxpayers because we all

pay tax and none of us want to, but we have to. It's what makes the system

Next, Joseph Mellie offers prime seat for the next big investment opportunity.

Ticket world is consolidating. Big money interest, want a piece of it, and he's

the guy to take them there.

But when his investors go looking for their returns, they may find the box

office is closed.

I was looking at the numbers and I said, this math doesn't work.

On Broadway in New York City, one show has led the way to a rebirth of musical

theater.

With more than $600 million in revenue and still growing, Hamilton has

box office records.

And four years after its premiere, the hip -hop musical about the $10 founding

father still draws theatergoers from around the world.

She had been bugging us to fly all the way here. We're from the Philippines, by

the way.

Yeah, we came all the way here to watch Hamilton.

I'm most excited to hear the song, My Shot.

I wouldn't let her see it till now.

She just turned 10, so it was a 10th birthday present from her grandfather.

With tickets ranging from $200 to well over $1 ,000, going to see

Hamilton for many people is a milestone event.

It's a celebration of her birthday, 10th birthday, probably 11th birthday,

probably 12th birthday as well.

Is it hard to get tickets?

Yes.

Very, very, very.

And it helps to know people.

That's what I took. I took an inside connection kind of. You got it.

Hot tickets.

Got high prices.

The conditions are right for a con man to leash onto a popular show and satisfy

his own greed.

Joseph Mellie is born in New York City, grows up in the Midwest, but

returns to the bright lights where he makes a career first in banking and then

in show business.

Dave Brooks, a journalist who writes about the music industry, says Mellie

styles himself as a power player.

He was the guy who could get...

Billy Joel on the phone, or could get a deal with the producer of Hamilton, or

could get a meeting with the people at Harry Potter.

Millie is owner and CEO of Bulldog Entertainment, whose claim to fame is a

concert series in East Hampton, New York, which Millie calls Hampton Social

Ross. His idea is to bring A -list artists, including Billy Joel, Tom

Dave Matthews, and Prince.

to an audience of about 1 ,000 people.

These are small, intimate events, like it's outdoors in the summertime in the

Hamptons. There's celebrity chefs supposedly making food. David Blaine is,

doing magic tricks.

It's kind of like what a poor guy would think rich people, like, really wanted,

right?

Welcome to Social Atlas.

Melly gets many celebrities to attend and has his picture taken with Billy

Alec Baldwin, And Renee Zellweger. Yeah, I love France. This is great.

Tickets to each show cost $3 ,000.

It's this exclusivity. It's like you can only be part of the show that no one

else can be a part of, and you're going to pay for the experience.

The show goes on.

And the star -studded lineup performs well -received concerts for small crowds

in the Hamptons. But Hampton's socialite Ross fails to make money.

I think what he misunderstood, though, was, like, the demand.

Sure, you know, I could find a dozen guys to pay $3 ,000 a ticket, but when

need to find one or 2 ,000 to pay that much money, it's really difficult.

It could never come close to break even because it was too costly and it was

just too small of a customer base.

Hampton's Soccer Let Ross loses millions and shuts down after its first and only

season. But Joe Melle quickly dusts himself off and rewrites his role in the

music industry.

Rather than be an event promoter...

He'll be a ticket broker.

He'll buy and sell large blocks of tickets to premium events and reap big

profits. Joe Mellie, he sees a key moment where the ticket world is

consolidating. Big money interests, hedge funds, investment banks want a

of it, and he's the guy to take him there.

Up next, Mellie acts like he's extremely well -connected, but is he just blowing

smoke?

In Manhattan, Joe Melly is the straw that stirs the drink.

You know, he seems like really generous and really gregarious and who loves like

long dinners and partying.

Yeah, he seems to just know everybody.

He was the kind of guy that said he had everyone's contact on his cell phone,

wanted everyone to know that he had contacts as well.

call somebody, get somebody on speakerphone, and take you to, like, the

restaurants in New York and, like, the best nights out.

Melly was born behind the velvet rope, or so it seems.

In the pitch materials he shows to investors, Melly claims he has long

relationships with an incredibly diverse range of the world's best -known

musicians, from the Rolling Stones to Barbra Streisand to Jay -Z.

He tells investors that his new company, Advance Entertainment, has exclusive

access to the producers of some of the hottest shows.

He picked events that everyone wanted to go to and that were very hard to get

tickets to.

Like Hamilton.

You couldn't get a ticket to Hamilton in the city.

Mellie says his connections will allow him to buy large blocks of premium

tickets at face value.

But he doesn't have enough cash by himself to make the purchase.

That's where the investors come in.

The upside, he says, is enormous.

They were being sold for thousands of dollars apiece, well over what the face

price was. So people knew that these were very in -demand tickets. So they

buying into it based off that.

Melly's pitch dovetails into many people's preconceived notions about the

event business.

Everybody is used to going to try to buy tickets for Adele or Beyonce or

Metallica. And immediately after logging in, they're all gone.

And you go to StubHub and they're selling for double and triple value.

It is always a sense that, like, something nefarious was at play.

Joe was kind of reinforcing what people already believed.

A friend of mine from college was pitched an opportunity to invest in what

to be the Grateful Dead's last tour.

Jonathan Davidoff is a criminal defense attorney in New York.

He says he's not a Grateful Dead fan, but when he hears about the band's long

-awaited reunion tour, he smells something in the air.

Money.

presented to me was that all the premium seats for all the dead concerts on the

tour was provided to advance.

And they were getting the tickets at face value because the dead needed money

fund the tour.

Mellie's deal, he says, allows performers to get paid in advance, and

investors to make huge profits.

As seen here in pitch materials, Mellie guarantees a 10 % return as an absolute

floor.

Profits above that 10 % return will be split 50 -50, he says, between Advance

Entertainment and the individual investors.

But there's one important rule.

Keep quiet and don't dare contact the producers.

You know, I'm the guy dealing with the producer, like, not you.

And if this producer for Hamilton or for Metallica feels like there's all these

different people involved, like, they'll just walk away.

I don't have access to Adele.

I don't have access to the Grateful Dead.

They were the ones with the access, and that's why they were getting a nice

piece of the upside.

David Off puts $50 ,000 into the Grateful Dead deal.

But many people think much more, according to Jud Grossman, who

group of people who thought they were investing in Hamilton tickets.

One of our clients introduced the investment to another client and so on

forth. These individuals collectively invested and lost approximately $6

million.

Despite Joe Melle's promises, the investors' money isn't being used to buy

tickets to Hamilton.

or any other show.

There was about $3 million that came in from a single investor.

And within a couple of days, that money directly went out to buy a house in the

Hamptons for Mr. Mellie. It was kind of a direct, you know, money in, money out

within a handful of days. That investor bought him a very nice house out in the

Hamptons.

According to the government sentencing memo, Mellie uses investor money to buy

Porsche 911.

And he spends lavishly on jewelry for his wife.

In fact, in a single month in January 2017,

Mellie spends $10 .3 million.

Some of that goes back to investors to feed the illusion that there are real

returns. But Mellie also treats himself.

He spends $44 ,000 on wine, $53 ,000 on clothing, and $20 ,000

on hotel.

He even uses investor money to pay for a $2 ,500 parking ticket.

Up next, what does Mellie mean by this cryptic email?

Rest peacefully, young prince.

The wolf is on the way.

As the Grateful Dead takes a bow on its 2015 tour, Jonathan Davidoff, defense

attorney and Grateful Dead ticket investor, gets the news that his ship

in.

So the return was 32%, even though it wasn't the 200%, 300 % return we were

hoping for, it was still a really good return.

Then comes Joe Melle's next investment opportunity.

He's one of the brightest stars performing today.

Adele. Frankly, I think the opinion of all the individuals that invested in our

group was that Adele is a bigger name than the Grateful Dead.

Davidoff says he takes the profits from his Grateful Dead investment in cash and

rolls his original $50 ,000 investment into buying premium seats to Adele's

upcoming tour.

Three miles south in Tribeca, the name Joe Melle first pops up on the radar

screen of FBI Special Agent Paul Roberts.

This was a spinoff from another investigation with someone else who was

trouble and told us about the scheme that Mr. Melle was involved in as well.

Joe Mellie helped him kind of recoup some of the money to pay out some of the

investors.

According to the government's sentencing memo, Mellie wires $3 .75 million

stolen from an investor to a friend who is running his own unrelated investment

scheme and needs money to keep his investors quiet.

In one email to his friend, Mellie writes, Rest peacefully, young prince.

wolf is on the way.

But the wolf is about to become prey.

There was a cooperating witness who made some recordings with Mr. Mellie. Some

of the things Mr. Mellie was saying were pretty blatant.

He talked about running a shell game, about the fraudulent ticket scam. He

said no one would ever know about this unless you or I were speaking to the

authorities. Pretty explicit and blatant in what he was saying.

Next, the FBI does what no investor ever did.

They contact show producers and ask if they actually have deals with Joe

Nope. There were no contracts to buy the tickets, as Mr. Mellon was stating, and

therefore it wasn't a legitimate transaction.

There's no evidence that Joe bought any tickets directly from any show

producers. I mean, it was all a lie.

Though Mellon shows documents to investors that purport to be agreements

show producers, it's all made up.

The government says Mellie even forges the signature of the managing partner of

the production company for Hamilton.

They weren't even close to what an original signature would be. As the FBI

prepares for a takedown, Joe Mellie keeps rocking on.

When the Broadway opportunity for Harry Potter came, I was looking at the

numbers and I said, this math doesn't work. Just get me my Adele money back.

I'm going to be done.

But there is no Adele money.

And on January 27, 2017, Joe Mellie is arrested at his home near Manhattan's

High Line.

Hundreds of investors, who collectively lose just under $60 million, are left

standing when the music stops.

That's a very distressing event.

You've been taken advantage of, you've been lied to, and you feel very

vulnerable. On top of that, of course, you've lost money.

Joe Melle pleads guilty to securities fraud and is sentenced to six and a half

years in prison.

It's a lot of money, but it's not life -changing money. And, you know, you can

learn your lesson.

Trust, but verify.

Do not just take the word of one person.

Get third -party verification.

Do your digging.

Trust, but verify to ensure that you're not being defrauded.

None of the artists or shows mentioned in this program had any part in Melly's

fraud.

Their name, their fame, and their success was exploited by Melly without

knowledge.

Joe Melly did not respond to requests to speak with American Greed.

So why did he do it?

Special Agent Roberts says the answer is written in Melly's checkbook.

Great.

He was a cocky, arrogant guy, and he wanted to live a certain lifestyle, and

did this to get the funds to live that lifestyle.

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