Mac Parker's Million-Dollar Ponzi Scheme

(MUSIC SEGUE)

[00:00:00] Julie: Coming up on this week's episode of AARP's The Perfect Scam.

[00:00:04] He told us that it would take about three years and he would need about a million dollars, and that we were going to be part of a small group of investors. It was a real kick in the stomach after we realized what was going on. I really trusted him.

(MUSIC SEGUE)

[00:00:22] Julie: Financial security is important to all of us. We all want the peace of mind that comes with having enough income to cover our expenses and to live comfortably when we're retired. Unfortunately, our anxiety about having enough money can leave us vulnerable to scammers, eager to exploit our desire to increase our net worth. The worst part is that sometimes these scammers are people that we already know and trust. On this special two-episode edition of The Perfect Scam, you'll hear the story of a woman who was one of many victims of a Ponzi scheme. We'll explain how Ponzi schemes work and what to look out for in case you're approached by someone with an investment offer that seems too good to be true. But first, I'd like to introduce you to my cohost and AARP's Fraud Watch Network Ambassador, Frank Abagnale. Frank, thanks for joining us once again.

[00:01:11] Frank Abagnale: Thank you, great to be back, Julie.

[00:01:13] Julie: For those of you just tuning in, we've covered a couple of these types of stories, and as many fraud experts will say, there's no shortage of them. Ruthless people still continue to defraud and deceive friends, acquaintances, even family members in order to make a buck. From what we've learned on this show, it's the classic scheme, and eventually it all comes crashing down. Frank, can you explain what a Ponzi scheme is for the folks who are just learning about it today?

[00:01:39] Frank Abagnale: Ponzi scams have been around forever. We've talked about Madoff and many other people and many other Ponzi scams, and it always involves somebody that everyone knows, people who believe that person to be very wealthy, and they have a way for them to make money and they're going to offer a great return. So a Ponzi scam, a lot starts off with building that pyramid, where I have to get other people to get in, and those people, I pay back right away because I want those people on my side to endorse what I'm doing and stand up for me and so on. And I'll make this a little personal story. About 40 years ago, my wife and I were going to move from Houston, Texas, and we thought we'd like to live in Colorado. Our children were very, very small. And I heard about a home for sale in Ft. Collins, Colorado, and so my wife and I went up there and the real estate agent was driving us out to this beautiful home on a lot of acreage. It was a fairly new house, and as we're riding up and we get out of the car, I happened to notice a few vehicles there, and I recognized them immediately as FBI vehicles. And I thought to myself, I wonder why the FBI is here? So when we walked into the house, of course, one of the agents recognized me, and I said, "What's going on?" He said, "Well, we're investigating some stuff, and we're going through this guy's computer." And he took me aside and he said, "The guy that built this house, he came to Ft. Collins with his wife and child, he had this story that he was a big investment banker, he was very flashy, and he got people to invest money with him; a lot of people from Sun City, retired people, who gave him a lot of money. He paid a lot of people off, and we found out he had 5 or 6 mortgages on the house from banks that all believed they had the first lien when they didn't have the first lien. He knew we were closing in on him, so he took a private jet with his wife, went down to Mexico, and we're hunting for him." And they finally caught him, but that was a typical Ponzi scam where all of these people lost all this money.

[00:03:35] Julie: Yikes, that's just really scary. Thanks for all that background, Frank. It'll be good to keep in mind as we move into our next story.

(MUSIC SEGUE)

[00:03:46] Julie: Today we're going to tell you about a man in Vermont named Malcolm Mac Parker who raised $28 million for a film he was calling Birth of Innocence. Unfortunately, for his trusting investors it turned out to be a Ponzi scheme. His investors were ultimately defrauded for millions of dollars. To help us understand how this scam worked, I'm speaking to Pedie O'Brien-Brisson, who's calling in from the Champlain Valley in the central western side of Vermont.

[00:04:12] (phone ring)

[00:04:15] Pedie O'Brien-Brisson: Hello.

[00:04:16] Julie: Good morning, Pedie, it's Julie Getz from AARP's The Perfect Scam. How are you?

[00:04:20] Pedie O'Brien-Brisson: I'm fine.

[00:04:21] Julie: Pedie, how is your morning going so far?

[00:04:23] Pedie O'Brien-Brisson: Uh it's gone well, and the sun is coming out. So I'm happy.

[00:04:27] Julie: Pedie, from what I understand, you're a retired schoolteacher, and you and your husband Armand have a nice big family?

[00:04:34] Pedie O'Brien-Brisson: My husband has five children, who are all adults. I have two that are adults. I have two of my own grandchildren. Armand has several grandchildren, like about 8 of them, and he even has some great grandchildren, because there's a 12-year difference in our ages. We have a great family situation, we're very fortunate, we're all one big family; everybody gets along, it's like we've always been together.

[00:05:00] Julie: And I understand you also have a connection to farming. Is it your husband that's a farmer?

[00:05:05] Pedie O'Brien-Brisson: He was a fulltime farmer in a different town, about 20 to 25 minute drive from here. So he loves to go over to it. You can't take the farm out of the farmer. And so when he sold the farm, he saved a little bit of land and he built a, a small farm and had horses and cows, and um, a cat named Cat, a peacock, a bunch of chickens and roosters, and he just loves going over there and always finding something to do.

[00:05:36] Julie: Nice. Quite the menagerie of animals.

[00:05:38] Pedie O'Brien-Brisson: Yes.

[00:05:39] Julie: That's great. And what is he doing now?

[00:05:42] Pedie O'Brien-Brisson: Okay, a town south of us, the next larger town south of us, we live in Salisbury, there's a post office, and each morning he gets up at 5:30, he drives to the post office and picks up the mail for four surrounding towns, and delivers the mail to the post office. And then in the afternoon he goes back out around 4:30 and he goes back to these little towns, picks up the mail and brings it back to Brandon where it goes to a central office, where it's disseminated.

[00:06:16] Julie: And he's doing that now.

[00:06:17] Pedie O'Brien-Brisson: He's doing that now, and he's 85 years old.

[00:06:21] Julie: That's so great. Is he enjoying it?

[00:06:23] Pedie O'Brien-Brisson: Oh, he loves it. He loves it. He loves getting up early in the morning, he's a very cheery, positive person. Always comes in, I don't care if it's raining or snowing and saying, nice day, isn't it? He's a sweetheart.

[00:06:36] Julie: He certain sounds like one. Pedie, do you mind if we transition now to Mac Parker?

[00:06:40] Pedie O'Brien-Brisson: Okay.

[00:06:41] Julie: When were you first introduced to Mac?

[00:06:43] Pedie O'Brien-Brisson: Well, my husband's daughter, Martha, got a call from Mac Parker asking if she would be interested in investing some money in a movie. She said, "No, we don't have any money to invest right now, you know, we just bought a house, but you could call my father." So, Mac called my husband, and when we got off the phone, I said I don't know him personally, but I know who he is.

[00:07:06] Julie: It seems like everyone in Vermont knows Mac Parker.

[00:07:09] Mac Parker clip: Vermont Storyworks in cooperation with Vermont Public Television presents... "You can go to sleep while your piggy oinks at the moon. Oh, don't you need a pig? Don't you need one soon? Well if you're really sold on the old pig's charm, come pay a little visit to the piggy farm." (applause)

[00:07:31] Julie: For over 20 years, he's earned his living as the state's most beloved storyteller performing hundreds of times in churches, town halls, and schools.

[00:07:41] Pedie O'Brien-Brisson: He came to my school a couple times to do storytelling with the kids. That's how I knew of him.

[00:07:47] Julie: In 1994, Mac makes, Let's Go to the Farm, a video for kids that captured a year of life and work on a Vermont dairy farm. It instantly becomes a local classic.

[00:07:58] Mac Parker clip: Summer is here. The sun is shining, and it's time for us to start making hay.

[00:08:07] Pedie O'Brien-Brisson: My two grandchildren absolutely loved this tape. They would just sit there mesmerized because there were cows and animals and horses, and lots and lots of farm machinery which really intrigued them. Also, their grandpa had a farm, so they felt like they knew a little bit about it.

[00:08:28] Julie: Mac tells Pedie's husband that his next project is a film called Birth of Innocence. It's a mystical film about the human spirit.

[00:08:37] Pedie O'Brien-Brisson: He told us that it would take about three years, and he would need about a million dollars and that we were going to be part of a small group of investors. So, we felt this man is well-respected, he's well-known in the community, he's been doing this for years, yeah, you know, let's, let's put some money in. And that's how it started.

[00:08:59] Julie: Mac's first ask isn't very much money, and the return seems almost too good to be true.

[00:09:05] Pedie O'Brien-Brisson: We started out by giving him just a $4,000 investment I think it was. And that was in, near the end of 2003. And he said he was going to give us 15% interest. We said, sure, why not? So we did that, and that $4,000 investment was totally paid back to us with our interest. So then we decided, he wanted to know if we wanted to put more in, so we put in um, I think uh 25,000.

[00:09:36] Julie: What were your hopes and dreams in investing with Mac Parker?

[00:09:41] Pedie O'Brien-Brisson: We believed that this film would take three years to be finished, that's what we were told. And so we took advantage of putting money in at 15% interest to add to our savings. Our hopes and dreams was just to increase our retirement money.

[00:09:59] Julie: Three years later, the film isn't done. But Mac and his film had become part of Pedie, and her husband's lives.

[00:10:07] Pedie O'Brien-Brisson: He sent progress reports over all the time. And we're getting our money every month and so we gave him some more. I think the last contract was for like $2,000, and the one before that was for $5,000. But prior to that, we had given him $50,000, even $100,000 at one point. Eventually the total amount that we had invested with him was $257,600.

[00:10:34] Julie: The investment delivers more than a solid return. Pedie and her husband soon find themselves part of a whole new community.

(MUSIC SEGUE)

[00:10:43] Pedie O'Brien-Brisson: Most of the people that invested were from our county. Madison County. And the type of people that invested were very interesting. They were farmers, doctors, just everyday, average people who did not have tons of money, but thought it might be a good way to earn some extra money towards retirement.

[00:11:06] Julie: In the center of the community is Mac Parker himself. Overtime, he becomes more than a filmmaker looking for an investment. He becomes a trusted friend.

[00:11:15] Pedie O'Brien-Brisson: Mac grew up on a farm, so I mean he would just stop by the farm and talk for a few minutes, too, it wasn't like he was always there for money. He was soft-spoken, well educated, very nice guy.

(MUSIC SEGUE)

[00:11:36] Pedie O'Brien-Brisson: I mean we just, we really liked him a lot. And we trusted him to the hilt. So, because we're trusting people. As a matter of fact, um, they did some filming on Armand's farm. They wanted to do a scene where there was a truck and they wanted to be in front of that truck and take pictures of it. But so Mac asked Armand if he would be willing to go up on Route 89, one of the main routes in Vermont, and because he has a pickup, so the camera crew could be in the back of the pickup photographing this, this part of it. And Mac offered to pay him, and he said, "No," you know, it's just a contribution. It was that type of a friendship.

[00:12:21] Julie: For five years, things seemed to be going well. But in 2008, Mac's visits to the farm start to come with bad news.

[00:12:30] Pedie O'Brien-Brisson: And then he would go over to the farm and say to Armand, uh, "I can't, could you wait a week before I give you your interest?" And so we said, yes, and then a week later the interest would come and so on, and it went on like that until 2009, just about this time of year.

[00:12:54] Julie: To Pedie and the other investors, the delay in payments is just a little hiccup in the relationship. But what they don't know is that behind the scenes Mac's investment scheme has attracted the attention of the Vermont Department of Financial Regulation. State Investigator and Deputy Commissioner Bill Carrigan is assigned to the case.

[00:13:14] Bill Carrigan: In middle to late September of 2009, we had received a tip about Mac and the making of this film. So the first thing I did was I, I went to a website that he had, and one of the differences between his website and, and others is normally when you go to a website you go to a, you know, it brings you to a landing page where it tells you a little bit about the entity maybe and you know, kind of, what kind of information you could find there. Mac's website brought, brought us right to an investment contract which raised a red flag for us a) because it was an investment contract, b) these were promissory notes which went under the Vermont Uniform Securities Act, were deemed to be securities, so I started to look into Mac and these promissory notes, you know, through the different sources that we have to see if a) if he was registered as a securities professional, which he was not, b) whether the securities were either registered or exempt from registration, um, and they were not. So once we were able to see that, the next step was to reach out to him, to have him come in and have a conversation with us and, and help us understand exactly what it was that he was doing here.

[00:14:29] Julie: Not long after Mac's conversation with Carrigan, Pedie and Armand open their mailbox and find a letter from Mac. Its message catches them by surprise.

[00:14:39] Pedie O'Brien-Brisson: He sent a letter out telling us what had happened. That the state had called him because one of the investors apparently had reported him or called in to find out if he was registered or licensed or whatever, and he wasn't. He invited Armand and I and two other couples and a strange man that I didn't know at the time, to come to the lawyer's office with him and she would kind of explain things to us a little bit. So we went there, and we talked with the lawyer and she said, "Well, this should be settled in a couple of weeks." And Mac said, "Well, everything will be okay. You know, it just, we just need to get a few things straightened out. Everything will be okay." And we believed him.

[00:15:27] Julie: Mac's investors rally behind him eager to show support for their friend. His lawyers’ bills are adding up quickly, and they know he's not a rich man.

[00:15:36] Pedie O'Brien-Brisson: We had an auction to help Mac raise money for his lawyer. And all the donations came from investors. They donated trips; one was a trip to Ireland where some people owned land. There were all kinds of really nice things that were auctioned off. Everybody pitched in. We had scheduled another fundraiser, it was a dance type situation, and we explained that Mac would be there to answer any questions that people had. And the dance was done by my stepdaughter and her band, and this other woman and I provided all the food and Mac never showed up. He called in sick.

(MUSIC SEGUE)

[00:16:21] Pedie O'Brien-Brisson: Lots of people came just because they wanted to talk to him.

[00:16:24] Julie: Do you believe him? Do you believe he was sick?

[00:16:25] Pedie O'Brien-Brisson: I did not believe that he was sick. At that point, I said there's something not right here.

[00:16:32] Julie: Unfortunately, Pedie's instincts are right. While she and the other investors try to help him raise money, the state regulators are closing in.

[00:16:41] Bill Carrigan: He came back to Montpelier with a couple banker's boxes of his books and records. And we asked him how much money he owed, and he said about 10 million. So we, we became obviously a little bit more concerned at this point, and then he pulled out a copy of one of the contracts out of the box, and at the bottom is where the investor would sign, and it was dated only a few days before he came in, and I said to him, I, I asked, I said, "Did, did you just get money from this person a few days ago?" And his response was, "Yes." And I said, "Well, what was it about our conversation, you know, back in October that you didn't quite get?" And his response was very telling. He said, "No, I understood, but I had a lot of investors that needed money to pay for their kids' tuition or pay their taxes." Well essentially you, you're almost admitting that you're running a Ponzi scheme here because you can't pay any of those folks back unless you raise more money.

[00:17:43] Julie: How many victims were there altogether? And how much money had Mac taken in?

[00:17:47] Bill Carrigan: Well when all was said and done, there were, there were over 750 investors. The FBI was able to account for about $20 million that had been repaid to folks. It was a $28 million Ponzi scheme.

(MUSIC SEGUE)

[00:18:03] Julie: It's a shocking number and a scandalous crime. Beloved storyteller and Vermont native, Mac Parker, has just deceived hundreds of his friends and admirers in the largest Ponzi scheme the state has ever seen.

[00:18:16] Pedie O'Brien-Brisson: It was a real kick in the stomach after it first happened, and we realized what was going on, because we really trusted him.

[00:18:24] Julie: The news gets worse as the case unravels. Investors make an even more surprising discovery. Mac isn't working alone.

[00:18:33] Bill Carrigan: The FBI seized some of his records. We were able to determine that there was another individual that was receiving a significant sum of money uh from Mac, but that this individual was not an investor.

[00:18:47] Pedie O'Brien-Brisson: Now we never, ever would have invested anything with him had we known he had a silent partner. And neither would anyone else have.

[00:18:57] Julie: What Pedie and the other investors want to know is who is this silent partner? What is his role in the scam? And what was his relationship with Mac Parker? As we'll find out in Part 2 of this Ponzi scheme story, the truth is almost too strange to believe.

[00:19:14] Pedie O'Brien-Brisson: The most interesting part of all of this is how it all actually ended. It turned out to be a really crazy type of thing.

(MUSIC SEGUE)

[00:19:31] Julie: If you or someone you know has been the victim of a fraud or scam, call AARP's Fraud Watch Network Helpline, at 877-908-3360. Thank you to our team of scambusters; producer Brook Ellis, our audio engineer Julio Gonzales, and of course, my cohost, Frank Abagnale. Be sure to find us on Apple Podcasts, Spotify, or wherever you listen to podcasts. For AARP - The Perfect Scam, I'm Julie Getz.

END OF TRANSCRIPT