carol: welcome to "bloomberg businessweek." i'm carol massar. jason: i'm jason kelley. we are at bloomberg headquarters in new york. this week, a special takeover issue. a binge were the issue telling the stories of robbery, bribery, and fraud. in mexicoluding theft with tragic consequences and how one man rake in millions on biodiesel tax credit with

multiple wives. carol: we begin with "bloomberg businessweek" joel weber. this is an issue to take to the lake. joel the goal is to steal your summer. cover to cover heist stories. they are a type of business story, right? only it is a business story with a major twist because it is ultimately about crime and the business of crime. jason: and every story has a twist including the story -- i love this 1 -- about model trains in england. our reporter turned into a private investigator. joel austin brought us this sensational story. easyng about a heist story want to read it to the end because you don't know how it ends and that is where austin excelled. we are talking about model trains. not little model trains, but model trains people ride. the risk some humor to that but story has some real tragedy to

it because it devastated the community this story is about. carol: people devoted their lives to building these. of coal,le pieces little troubles. carol: from little trains to big gold coins. goldcanada made these coins that were worth about $1 million, the size of a car tire. to collector lent one to a museum in germany. it was there, it was on a collectible shelf with a lot of different coins and one night, it went missing. the story is a graphic novel that unfolds about not only the robbery but the aftermath. jason: joel weber, thank you. carol: to learn how a million dollar coin disappears in just 16 minutes. jason: we turn to reporter benedikt hammel. >> one of five big coins minted by the royal canadian mint and they are as big as a tire and

they way 100 kilos, about 220 pounds. solid gold and impressive, imposing. investors, one ended up with an investor in germany and he loaned it to a museum where it sat for a couple of years. jason: it is a couple hundred pounds and yet behind the scenes leading up to this, there is an ocean's 11 type plot to steal this thing. walk us through how they did it. >> one night, three guys show up the trainorm nearby, platform and walk across the platform onto the tracks that on an olde museum overpass and they climb up there through a window, go in, break the glass, take the coin and they are out in 16 minutes. seems very simple but if you dig -- was seriousre

planning that went into it. they tried it twice before and didn't seem to work out. the didn't make it into the museum so the third time, they made it in and found there was one window in the entire museum that didn't have an alarm. that was in a window that had been fickle over the years and it always set off a false alarm so they knew about this one window on the second floor. they knew when the guard was doing his rounds, so they struck at precisely the right moment and in the right place. jason: there are a couple of interesting things. one, the police slow walk getting there because they think someone stole a coin, so they don't show up for a while and then they clearly come to the conclusion that this was an inside job. that leads them down one path but as you say, they never found it. they think it was broken up and sold? benedikt: that's right. i went to one of the court hearings. they did, in the end, arrest

four people they think are connected with this. the court hearing to hear what the guards had to say and police. one of the guards was telling how when they discovered the coin had gone missing, they called the police and said come here quickly. there is a coin missing. the police probably thought what is the big deal? you guys have hundreds of coins and someone slipped it in their pocket. they didn't realize this was the big corn that had gone missing. nobody thought this was possible. it was humanly impossible to take the coin out of so when the eventually showed up, they started asking some questions like how was it that these three went down the platform, how would they know when the guard did his rounds? how would they know this particular window was the only window you could get into? things,hese kinds of then they quickly started thinking maybe it was the guard who was on duty that night and they dropped that, but they poked around inside the museum

and came to another guard who was friends with someone already suspected and that is how the noose closed around these four guys who are on trial. carol: next, a sobering story. a gas price gone terribly wrong in mexico. jason: fuel fraud. how one man allegedly stole half $1 billion from the u.s. government. carol: this is "bloomberg businessweek." ♪

carol: welcome back to "bloomberg businessweek." i'm carol massar. jason: i'm jason kelley. join us for "bloomberg businessweek" everyday on the radio from 2:00 to 5:00 wall street time. carol: find us on businessweek.com and the mobile app. a gas heist gone wrong. jason: fuel theft in mexico is an economic burden, one that you have done little to slow down. carol: it is also a huge hazard. >> it is important to remember mexico is a country where fuel theft has become a common issue here. numbers ofing pipeline taps on the network of pipelines, to state-owned oil company. ps resulting ta

explosions that can kill people. up to 42 pipelines tapped a day really bad.ich is in this case, january 18, not that long ago when you had these tap one of pipelines and as a result, gasoline was pouring out of the pipeline, premium gasoline. people from around the area of the state of hit all go in settlement -- hidalgo in central mexico, people started gathering. this is a poor area and people saw the opportunity to get free gasoline. increasing andt creasing until you saw around 600 people in total there. crackdown by the government on this problem. while there were soldiers

standing guard over the pipeline, because the ground -- crowd had a swelled to such a number, they thought they couldn't intervene because it could become a riot. unfortunately, that many bodies, people bathed in the gasoline, eventually what authorities say was static electricity caused a spark and that spark resulted in the entire area igniting. people were essentially burned alive. forook a very long time firefighters and ambulances to it to the scene and sadly, resulted in 137 people losing their lives. jason: talk to us about pemex's role in all of this because there is a corruption element that is part of the crackdown you have been alluding to in the sense that a lot of what was by then was, dated

company or enabled to some extent? companyis a state-owned that had a monopoly until recently over the entire sector. are 128,000 employees at pemex and that is not even all the people contracted by the company. withof them got involved people selling fuel on the black market as early as the 1990's. earlier in thert year where government officials said probably about 80% of fuel theft was conducted with the help of pemex employees. endemicis a problem of corruption within the company. it has been very hard to address because it is so pervasive and because the company is so enormous. carol: they are so important to the mexican economy as a whole,

obviously, but you do wonder about -- how you said -- enabling these people because there were guards those guards were instructed to notify the company but keep watch. they didn'et involved. to wonder what is the company's responsibility here? i'm curious what you are hearing out of mexico and out of pemex about the responsibility in all of this? amy: the company and the economy are tied together. pemex represents about 20% of the federal annual budget, so it is an important contributor to the economy and this practice of $3l theft results in about billion in losses every year for pemex. it is substantial. carol: from fuel theft to fuel fraud, jason kingston rake in half $1 billion in biodiesel tax credits and has multiple wives. jason: our reporter tells us about the polygamist skimming the u.s. with an unlikely elbow -- upper.

-- helper. >> it centered around a mormon sect known as "the order" and two brothers, jacob and isaiah kingston. they ran a biofuels company that the internal revenue service said engaged in a massive fraud over several years. their partner in this according to the government is in our median immigrant who has been accused of several crimes over the years and then acquitted. with the government said is that over the period of several years, they defrauded the irs out of $511 million in biofuel tax credits and they then laundered $134 million of that to turkey and lived a very lavish lifestyle. witness a lot of intimidation alleged in this

case and some quite colorful characters as witnesses along the way. carol: tell us about "the order," because i don't know that everyone is familiar. david: it is a polygamist sect and people have several wives and many children and it is hierarchical, which has a prophet who determines where people work, who they will marry, essentially how they live their lives. they own more than 100 businesses in the west and generate hundreds of millions of dollars in revenue, and that money is supposed to be shared order.th the in this case, the government claims these brothers, jacob and isaiah kingston, kept a lot of that money for themselves and lived a very lavish lifestyle. lev derman.

he drove a $1.7 million bugatti. the kingston brothers drove fancy cars and jacob kingston lived in quite a mansion. all against the general if those of "the order." jason: how did these guys get together in the first place? not been fully spelled out in the case but they met in february of 2011 at a biofuels conference in las vegas. biofuelston's created which could then be mixed with diesel and there is a federal law that is about a decade old that encourages the use of biofuels. all the big refineries and oil companies are required to use thee biofuels which is what

kingston's produced. the government says they didn't actually produce what they said they did and they engaged in a very elaborate kind of daisychain of moving materials around the u.s. and in the caribbean to make it appear they were selling products they said they were producing, that they were not actually producing. so lev derman -- carol: not producing the getting tax credits? david: not producing what they said they were producing and still getting the tax credits and that is the heart of the fraud alleged. carol: the kingston's said this isn't what happened? david: they said they produced everything they said they did and deserved these credits. lev derman -- they've all pleaded not guilty. jacob kingston's mother and wife are also under indictment. they are going to trial in late july in utah and -- carol: one of his wives. david: that's right. lev derman has asked the judge

to be tried separately saying he is not involved in all of this fraudulent activity with kingstons and that has to be determined. the kingstons have also asked the judge to bar any reference polygamyrder" or to because they think it is prejudicial. carol: coming up in the heist issue, how to rob a train. jason: and the little engine that vanished. this is "bloomberg businessweek." ♪

jason: welcome back to "bloomberg businessweek." i'm jason kelley. carol: i'm carol massar. you can listen to us on radio on sirius xm channel 119, and on am 1130 in new york, 106.1 in boston, 99.1 fm in washington, d.c. and am 960 in the bay area. and london on dab digital and through the bloomberg business app. alwaysise in chile, presenting a target for thieves. we are talking about an area as big as nebraska. is mostly uninhabited and because copper is crucial from everything took what -- electronics the plumbing, it is easy to find a buyer. carol: big companie have addeds security but one thing remains, the trains.

>> copper theft is a major issue in chile. it is the world's largest producer of that metal and the amount of copper produced is a great target for robbers, for thieves in that part of the world. it turns out that mines in northern chile are and makes for an easy target that people want to rob them. >> for a wild, states were robbing the mines themselves -- thieves robbing the mines themselves, putting it either in their backpacks or more professional bands would put it

in the back of their pickup trucks or bigger trucks. copper miners and companies started to get more serious about security, they hired people that could look after the mines twitter for seven -- 24 /7. the thieves thought of robbing the trains and transporting the copper through unser veiled unsurveilled desert. jason: they found that while wire is easily transported, slabs led to interesting ingenuity. laura: absolutely. the traditional way has always been the smalltime thief could go into the minds steel -- mines and steal the wires which are easier to hide and fit in the truck of your car, but that can be sold for around 100 u.s. dollars, but if you get a hold of one slab or more than one slab, they can be sold at around

$500 each on the black market, which means that the thieves have an incentive to get organized and get a few people together and figure out a way to rob that. carol: a couple of tips at you , but i love one of the possible solutions to get these big slabs off. you tie some rope to a giant rock on the ground and then hop on the train? mines that's -- laura: that's right. he started talking to the local police and at the time we started covering that, there was still not a special police force to cover that but there is a police force that investigates the copper thefts in trains. robbers prefere nights- moon filled because they don't have to use the lights.

they can approach them and jumped on them and still -- still copper. thethieves who approach trains on their pickup trucks, they match the speed of the train, jumped on top of the train which can be quite dangerous, and either throw the slabs directly on the desert ground or tie a rope around the slabs and tie an anchor to that the so the anchor drags all slabs on top of the desert floor. what happens is there is someone on top of the train. there is someone on a pickup truck picking up the slabs that fall on the desert. , one of the big issues here is you've got to be able to move it after you steal it. that seems to be getting harder and harder, thankfully, for those of us who are law-abiding citizens. tell us about the crackdown. laura: whenever there is a theft

in one of the trains, the first in the train drivers do is call the police and say there has been a robbery on my train. please come and help. they might stop the train. they might keep driving to the nearest port but the police sent out -- set out lots of roadblocks to make sure they can catch these thieves carrying the copper on their pickup trucks. some thieves have been caught after robbing the trains, but then the police think the smartest themes are -- thieves are disappearing into the desert. finding secret spots to hide the slabs for a while. so when the police pressure cools off and the police stop looking, they unbury that loot and drive to the nearest scrapyard and try to figure out how to get the copper out of the country. carol: coming up, we continue with train robberies but this

one on a smaller scale. jason: about 1/12 size. it is part of this week's special heist issue. this is "bloomberg businessweek." ♪

carol: welcome to the hacker hotel. watch that wi-fi, it may be tapping your credit card. jason: plus, more train robbers. carol: it is all part of a special bloomberg businessweek "heist" issue. we talked to the men who put it

all together. >> this is our summer reading issue. the idea is to give people a different experience. the new cycle slows down while everyone is going to the beach or whatever. so these are our sort of "true crime" series. all the stories involved a thing getting stolen. this one is a little more expensive, includes heists, scams, fraud, other forms of skulduggery. carol: what story really stuck with you? >> i guess the story that stuck with me most was this story about the model train robbery. carol: yeah! >> it is kind of ridiculous because the stakes are quite low. it is about the theft of some of very small trains. and i don't want to ruin the but austin,

basically turns detective and tries to solve this mystery. and in the process, reveals an stuff about his own family -- some stuff about his own family and the nature of hobbies. there's also a wonderful main character who is the secretary of this model railroad club who becomes a very effective detective. carol: not trains, but she becomes a good detective. jason: for more on the little engine that vanished -- carol: we got to our reporter austin. >> i realize there was this weird trend of an incredible number of heists and vandalism's of model train exhibits, stores, and clubs like the one we talk about. particularly in the u.k., there was a string of them which led us to england. carol: tell us about this club. >> it is just the cutest place

filled with the loveliest people. i was delighted to go there, i had no idea what to expect. and these folks, it is a model train club but really is an engineering society. a lot of them are engineers, they grew up that way of building these things with their hands are went to college or the military for it. , but the wholeub idea is to educate kids and get them interested rather than just the model trains themselves. jason: and so there was a robbery. and you describe in great detail how they think it was pulled off. pretty brazen. >> incredibly, but also professional. and i don't want to give any , but in they midnight witching hour of valentine's day, you had a van pull up to the small roundabout

that used to be a retired airfield, used in the battle of britain. it is now home of this train club. the thieves snuck through the back, clip through multiple fences, used angle grinders to ,et within these containers click in to find these locomotives which way 100-300 pounds. than they had to wield a back over the fence, use a hoist to get them over another fence. they did this three or five times. we talk about model trains, we are not talking like the little ones. >> you guys might be used to hornby or lego trains, thomas the tank, these are larger. s, there called loco' terminology is another thing i love about this, these things are pretty big. adults can ride on them.

1/12 thepretty large, size of an amtrak train, let's say. it begins like an agatha christie novel. center, a leisure he was just near that club with his wife and their cocker spaniel. nearwere walking along this gated, fenced off train club. in the distance, he saw a few of the doors were just off their hinges. he got initially another member was just doing some maintenance work, but as he got closer, clearly something was awry. his wife admittedly called the cops and he knew to call the one person who was the protagonist in the story, tricia. zooms over and that is when they begin their personal investigation. carol: carol: you became an

investigator of sorts. we have like a masterpiece theatre going on here. >> i do masquerade as an investigative journalist. [laughter] arrived, i went into this thinking that i would be the one who will have to this all on my own. it was very condescending, a lot of presumptions. it turns out the woman had done an exceptional job, she had done my homework, she should be the journalist. the amount of paperwork, photographs, evidence. just providing that give me a huge head start. but yes, i contacted a private detective, i went house to house , i went to local bars and spoke to councilman. there was a big lead we could talk about that almost broke the case open. you know, maybe the thieves out -- out there, we are on to them.

jason: more on the train robbery of next. carol: all part of this week's special issue. jason: this is "bloomberg businessweek.". ♪

jason: welcome back to "bloomberg businessweek." carol: join us every day on the p.m. wall 2 p.m. to 5 street time. you can also catch up by listening to our podcast. jason: and you can find us online and through our mobile app. carol: staying with the model train robbery -- jason: we take you to the small town in england with thieves stole a valuable collection of those scaled-down locomotives -- where thieves stole a valuable collection of those scaled-down locomotives. england, since a group of train enthusiasts where since 1953, obvious meet to work

on the many locomotives. -- hobbyists meet to work on the many -- mini-locomotives. some people have been on the move longer than that, 20, 25 years. them, and to maintain that takes quite a lot of doing as well. >> the club is open to the public on sundays about hosting birthday parties, charity runs, and other events for children. >> it is a great hobby to have. a lot of the youngsters that come up. do appreciate what we do. i've got grandchildren of my own , and i know how much they enjoyed it. over the years, i have had 3, 4 engines. sorry, do you want me to talk about the robbery or not? >> on february 14, 2019, the

unthinkable happened. the club would never be the same. >> we just sat down to eat breakfast when i received a phone call from one of our members who is a dog walker and uses this pathway. he just said i'm sorry to tell you, but we have been burgled. ,s we came through the gates the door to the clubhouse was off its hinges and laying on the ground. both of these containers were with a debris inside with a had gone through everything, broken into locks where the trains were. >> in total, four trains were

, two belonging to individual members and to owned by the club itself -- two owned by the club itself. the value was estimated at 25,000 pounds. >> letting people know what has happened, calling them up was the worst thing i have ever had to do. it was horrible. there were tears. they may be grown men, but there were tears, on my side and there's. -- theirs. >> when i walked in and realized that mine had disappeared, i must admit, at that time i felt like packing up, to be honest. i had that engine over 20 years, to maintain it and keep it running. it was devastating, really, absolutely devastating. especially, because

he loved it, and it really upset him. >> the second member whose trade was stolen decided to leave the club. he was too heartbroken to continue. , focus theirtricia energy on investigating the crime. know that the thieves had a van of some sort parked at the end of this pathway. ,hey walked down this pathway cut the farmers fence, climbed over, which brought them to the back of our containers. on entering, they angle grinder grinded through all of these hinges. here ist container where our two club engines were stored. >> the police were unable to

uncover any additional clues. but that night, tricia received a phone call from a model railway shop in hempstead, a town 90 minutes from kent by car. and man was offering to sell some model trains. but when asked about paperwork, a requirement for all engines, the man drove off. >> it was a matter of seconds, he said, when his helper in his shop came out and said you'll four locos, i've had stolen. from their, we have had no leads. that people will lead them somewhere, because they cannot use them or get rid of them without the paperwork. and to the members, it would be lovely if they were found in a ditch somewhere or a field, anywhere, even if they were damaged. we have the facilities to prepare them.

the members were quiet for a few weeks. lifted by thewere community around us who decided to do a giving page for us and raise money. >> donations to the club totaled over 5000 pounds, mostly from small contributions by friends, humanity members, other clubs, and complete strangers. >> the frowns and tears gradually turned to smiles again. >> we had a such support from the community. a lot of us could not believe it. we just saw it as a love of our own, a hobby that keeps us busy. but when we saw support from the public, it wasn't just a brilliant. >> we have bounced back very well, actually. i went out and one of our club members had another logo -- loco

for cell -- for sale. him, really,for because what he has given me is better than what he has got. >> the culprits are still at large, but the club is as strong as ever. chugging right along with a newly completed expansion of their track. >> we love what we do. and that is the truth. and if you enjoy what you are doing, there is nothing better than that. i think that says it all, really. jason: next up, we take you undercover to uncover the security flaws in hotels. carol: plus, what is the number one restaurant in the world? we will tell you. jason: this is "bloomberg businessweek."

jason: welcome back to "bloomberg businessweek." carol: you can also listen to us on the radio on sirius xm channel 119, and on a.m. 1130 in new york, 106.1 in boston, 99.1 f.m. in washington, d.c. jason: a.m. 960 in the bay area, london on dab digital, and through the bloomberg business app. carol: staying with this week's special heist issue, malware and many bars -- mini-bars. toon: we go undercover uncover security vulnerabilities in hotels. walked into hotels with security experts and watch them as they went about identifying and beginning to exploit the

vulnerabilities that they saw. it started from the moment we walked into the hotel. one of the guys i was with walked along the front desk while another hacker was checking in. he noticed that at the end of the front desk are a bunch of computers used to take reservations, swipe credit cards , process payments. and all the way over there were machines that where nobody was sitting. haveetically, he could reached over-the-counter and slept a little usb drive into the end of the machine and all of a sudden been logging every keystroke the machine made. carol: apparently, that is just one opening in the environment that people can access. and that is what these guys were looking for. >> it is all over the place. from the hotel websites to hotel wi-fi, which is a big one. ,f you are using hotel wi-fi

and you can configure your wi-fi setup. one of the more interesting things is that even five or 10 years ago when it was more common to pay for wi-fi, there was a higher degree of security around that. you were getting an individualized wi-fi access point. you are paying for it and it would give you some kind of credential linked to your name and credit card and all that. now, everybody wants everything immediate, free, and easy, and wi-fi has become no longer something we think should pay we should pay for what should be part of what they provide us. so what you get instead is a completely public wi-fi, no log in. and in much better system would be based on your room there would be a password. that event that would be based on your you mail address or social media account. user has ay single

credential. one of the reasons this is important is they created a simple way with just their cell phone, they created a wi-fi access point with his phone that was named after the hotel. they said if you really want to be a jerk, usa name of the hotel and then free. or name of the hotel, fast. even more enticing. carol: you see when you get in, you will see multiple names. and what is the real? >> -- real one? >> immediately, six devices had jumped over. it was not people looking down, it was their devices automatically finding the network. we did this on the basis of we are not going to do anything illegal, obviously -- carol: these are good guys. jason: white hats.

>> and the hotel is a client, we had permission to go in and mess around. but we were not going to compromise a guest in any way. and there were some other things we were not going to do. if he had gone in any more serious way, he would have come in with a device called a wi-fi pineapple. it would do the same thing but automate the process of using this initial exploit of tricking phones and laptops into switching on to this evil wi-fi then start listening into all of the communications they are doing. he send an unencrypted password summer but the guy over here with the pineapple is going to know. there, the possibilities kind of continue. much of what these guys showed me, the idea is you are looking for and access point or a door and you see where that leads.

you are able to snoop on the indications of my devices , whatever emails i am sending or whatever. maybe, something i do is going to give this guy more access. jason: so we can't let folks go without a little bit of "pursuits." so we turn to the number one restaurant in the world. carol: first of all, it is a survey, right? >> yes, the number one restaurant is like the oscars. the excitement leading up to it, this is like the big day. they announced the number one restaurant and it was a surprise, it has never happened before. is a place in provence. carol: how could that never be? >> this is the first time france has won a top spot. which is kind of crazy, right? france is supposed to be one of the great food countries of this world. jason: so they change the rules

olympics this year and that led to a little bit -- the rules this year and that led to a little bit of disruption. >> this option is the right world -- word. this is the survey that put that restaurant in copenhagen on the map, and that change everything. -- changed everything. that is when he started to hear about foraging and scandinavian food. so now everything new is old again -- everything old is new again. offhey put these all places the list because these places that had one cannot win anymore. jason: they change the rules so that if you have one, you are now relegated to the best of the best. carol: well done, smart move. >> it is smart on a lot of levels. it is smart for them because they get to mix it up and --ress a diversity more address diversity more.

it is still a white guy winning, but they can address a new cast of characters. but the chefs like it, because if they are number one and there restaurants start slipping, that is embarrassing for them. so if they get to be in the hall of fame, that's good. carol: we can't go through all the names, but tell us about the winner. jason: the winner -- >> the winner is in provence. argentinian-born, and he has adopted local ingredients. and the best restaurant in america is number 23 in new york. restaurantcy mexican and it is great. jason: and its chef one some accolades of her own. onexactly, in s -- ines best female chef in the world, so there are a lot of reasons to go. jason: and we have to mention noma because it made its way onto the list at number two. >> if you want some scandal, you

have to talk about noma, which one -- which some say should not be on the list because it has won a number of times. but they have a new location and a new format and is at number two. that's only to talk about. carol: thank you as always. "bloomberg businessweek." is available on newsstands now. jason: also online and through our mobile app. what is your must-read? carol: i like the story about jacob kingston out there in utah. polygamists, allegedly tapped into biofuel credits. story, thatg that was a interesting read. jason: i loved austin's, he delivers with such enthusiasm. and if you go to the story online and in the magazine, you also learn it is a personal story for him. not just because he became a detective, but bonded with his

dad a little bit. carol: a very sweet moment. our dailyck out business week podcast on itunes, soundcloud more bloomberg.com. .- four bloomberg.com carol: more bloomberg television starts now. ♪

♪ this is the "best of bloomberg technology." coming up, shots have been fired between the u.s. and china in the global trade war. the tech sector in the crossfire. who is poised to win and lose? plus, facebook is putting together "an almost supreme court." new content oversight board will review controversial decisions about what goes up and what is to come down.