American Greed Features Philly Fraudsters
I don’t know about you, but I love the show American Greed. From the announcer’s snarky comments to the fraudster’s elaborate Ponzi schemes and ripoff attempts, there’s little doubt why the stories make so many people incensed. Especially after the recession, Americans are happy to see the rich get their comeuppance, which is probably a big reason the show is in its 9th season.
On Friday night, CNBC aired its newest episode, featuring Philadelphia company Remington Financial Group.
The Remington scheme was relatively simple: When people couldn’t secure loans from banks, Remington told them that they had hundreds of loan options from private financiers. The borrower just needed to pay a due diligence fee of around $10,000 to $25,000 so the organization could vet the company and make sure they’re eligible for a loan.
You can probably guess what happens next. Almost all of the borrowers that came to Remington were turned down, and Remington kept the due diligence fees. (In financial terms, they call it an “advanced fee scheme.”)
In fact, American Greed reported that the company stole $26 million from a total of 1,900 victims. Just three people found financing.
“Eventually they tell you, ‘you’re project has problems X, Y and Z, and it can’t be financed,” said David Axelrod, a former U.S Attorney featured on the show. “We’re sorry. We tried really hard, but good night and good luck.”
He went on to say that the scheme affected everyday people.
“These were not big real estate developers. These were not wealthy people,” said Axelrod. “These were people who were just trying to take advantage of the American Dream and build something for themselves.”
Watch the full episode here. (The Remington segment starts about halfway through.)
The episode focused on two of Remington’s top executives. Andrew Bogdanoff, chairman and CEO, (who eventually moved to Arizona and opened another Remington office); and Matthew McManus, who was hired to run the Philadelphia office downtown.
The classic American Greed style, the Stacy Keach narration was on point:
Excited clients are funneled trough Bogdanoff’s Arizona office and then sent on to the Philadelphia headquarters, now relocated to the prestigious Bell Atlantic Tower in downtown Philadelphia. It’s called the Arizona pipeline, but the truth is, it’s flushing hundreds of people down the drain each year.
It also highlighted Bogdanoff’s lavish lifestyle, noting that he paid himself $1 million per year and took trips to Hungary, Hawaii, Spain and Las Vegas.
Ingrid Robinson and Gene Teigland were both duped by Remington in separate incidents, but banned together to find other victims and present the case to the FBI.
Robinson eventually found more victims on Internet fraud forum sites while Teigland started calling Remington’s “satisfied customers” that gave testimonials displayed on the company’s website — but they had no idea what he was talking about.
They even set up a phony blog claiming to be Remington and told customers that the company is giving all the victims refunds. That helped the find even more victims to present to authorities.
In the end, Bogdanoff was sentenced to 18 years in prison, and McManus was sentenced to 16 years.