tv The Profit CNBC September 22, 2016 7:00pm-8:01pm EDT
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♪ >> narrator: in this episode of "american greed"... safe money specialist paul kruse promises big returns, while stealing his clients' life savings. >> he was arrogant, he was greedy, and he was evil. >> narrator: money starts flowing. >> $400,000 in, $400,000 out. >> narrator: and kruse lives large. >> he was dating an exotic dancer and actually was paying for breast augmentation out of these people's hard-earned money. >> narrator: his assistant says he makes an indecent proposal to her teenage daughter. >> "i'll buy you a bmw if you would show me your boobs." >> narrator: and she's left with only one choice. >> taking his ass out. you want me to put that more mildly? i'd rather not.
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>> narrator: and even from jail, kruse proves he's no average white-collar crook. >> i sometimes like to call it my "breaking bad" case. it takes a really big leap for most people to go from financial crime to wanting to kill people. ♪ ♪ >> narrator: a once-successful financial pro named paul kruse sits locked up here at the baker county correctional facility outside jacksonville, florida. he's facing charges that, with the help of his brother, jon, he's taken the life savings of former clients, friends, and even family members. though kruse has already signed a confession, he's now decided
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he's not going down so easy. >> he went from zero to 60, and i think it showed his true colors. he did not want to be held responsible for what he had done. >> narrator: for weeks, kruse has been angrily plotting revenge and meticulously planning the murder of the woman who turned him in. today, he's eager to hear the news that will mean his freedom. [ gunshot ] [ birds chirping ] paul kruse has come a long way from his youth. he's the son of a traveling
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pastor who built churches by hand. to kruse and his seven brothers and sisters, luxury was a stranger, hunger a constant companion. >> always, we were cramped into one- and two-bedroom houses. at christmastime, there was no money for gifts. there seemed to be a virtue with my father and mother of being poor. >> narrator: dave kruse says that his younger brother paul doesn't buy into the virtue of being poor. >> i think he was obsessed with fine things, even from the very beginning. >> narrator: after studying theology in college, paul works as a youth minister for a short stretch, but the paper he likes isn't inscribed with the good word. it's the kind you fold up and put in your wallet. [ birds calling ] eventually, paul leaves the church. dave says that he then works for
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a time as a developer in nebraska. he uses his silver tongue to bring in investors. >> he was very convincing and could lure anybody in. >> narrator: dave says his brother's construction deal goes bust, leaving investors feeling angry and ripped-off. >> the investors put a contract out on his life. this one guy was so angry that he wanted to kill him. >> narrator: kruse heads west, and in the early 1980s, he joins his older brother jon at a company selling mutual funds and insurance to military families. there, both brothers build trusting relationships with numerous clients. court filings and co-workers reveal that paul is successful and his brother dave says that he gets used to living the good life. >> he was going to expensive ski
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resorts and drove the latest model mercedes. usually, it was over $100,000 cars that he was driving. >> narrator: but this first taste of real wealth won't last forever. in 2001, after 20 years at the firm, kruse is fired... cutting him off from the luxuries he's grown to enjoy. >> he was really lost then and was selling shoes for a while, just enough money to exist. [ birds chirping ] >> narrator: kruse makes his way to jacksonville, florida, where he scrapes by for the next few years working as a financial advisor. among the clients he brings in is darlene mae jones, a kruse family friend. she and her then-husband first go to paul for investment help in 2003. >> when we first invested, we had, i think, about $28,000, and within two years, we had about $46,000.
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at that point in time, we really felt like paul had done what we wanted him to do. and he was just there for us. >> narrator: then, in 2010, kruse sets up yorkshire financial services, a company that will be his ticket back to the good life. calling himself a "safe money specialist," kruse goes looking for clients. when jones retires from her job as a general manager at pizza hut, she's saved more than $100,000. once again, kruse says he can help. he convinces her to invest her money in the stock market through his new company. >> i had utmost confidence that it was going to be okay. i felt like, since i had worked with paul before, that he was honest with me and that he was gonna do what was best for me and that my money would grow and i would be well set for my future. >> narrator: when jones signs
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up, kruse tells her that she's made the right decision by investing with the company he just started. >> "dear darlene, it is with great pleasure that i welcome you to the family of yorkshire financial services group, llc. yorkshire financial services has over 30 years of continuous operation, making us one of the oldest financial services in the united states. additionally, we have investors from all over the globe. thank you for giving us your confidence. with warmest regards, paul s. kruse, president." >> narrator: jones isn't the only one to hear kruse's pitch about yorkshire financial. he tells others that the company consists of a team of sophisticated traders with the skills to beat the market. >> they thought the money would be traded in stocks, bonds, and securities that would be relatively safe and appropriate for retirement investment. >> narrator: kruse guarantees that investors' principal will remain safe and that returns will range between a robust 10% and 15%. it's a comforting pitch tailored
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toward people who don't have extra money to throw around. >> these are people that worked hard their whole lives -- good people, good, honest individuals just trying to make it. and he just stole from them. >> narrator: next on "american greed"... paul kruse learns the hard way -- never cross an assistant who has the power to ruin you. >> he was going down one way or the other. if it wasn't gonna be on finding out how he's spending this money, it was gonna go a whole different route. this money, it was gonna go a whole different route. ♪
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legal help is here. ♪ [ birds chirping ] >> narrator: paul kruse runs yorkshire financial services from his home office in a quiet suburban neighborhood in jacksonville, florida. eventually, he invites a mother of six named amy weatherford to live with him here. kruse knows her sister, and when he learns weatherford has fallen on hard times, he makes her a deal. >> paul was lonely, and he said, "you know what? why don't you just move in my house rent-free, buy some groceries, clean up, do a couple
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of personal errands for me?" i really thought i was with a good christian man as a friend, just helping me out and i'm helping him out at the same time. >> narrator: eventually, weatherford and two of her children move in. she says that at first, she knows little about kruse's business, beyond the fact that he's very disorganized. but it's not hard to notice that he's burning through cash. >> it's like, he would have money -- big money -- and then he'd be broke at the end of the month and, of course, borrow money off of me. >> narrator: that's not tonly strange thing she sees at kruse's home. >> i went into his bedroom 'cause he had papers all over everything, and he was signing their names. i said, "what are you doing?" and he goes, "uh, i'm signing the clients' names." i said, "you got a power of attorney for that?" and he goes, "of course i do." >> narrator: weatherford keeps her mouth shut... for now. a few months after he begins bringing in investors, paul's brother jon joins him at
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yorkshire. a seasoned broker in the small town of oak harbor, washington, jon has longstanding relationships with many clients. some of these people come from the nearby naval base, and he set up their retirement accounts. now he has a new place where they should put their money -- yorkshire financial. >> most of the investors were brought in by jonathan and jonathan going back and re-contacting his clients and telling them that his brother paul had something new that was better, with higher returns. it was guaranteed. you won't lose your money, and just really selling it as something that was safe and high-return. >> narrator: in an e-mail exchange, one investor pushes jon, asking if this is truly a safe place to invest his life savings. >> jonathan responds very quickly with, "this is 100% safe. you know, this is something i would put my own money in. i would never take your money and risk it in that way 'cause i know this is your retirement money."
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>> narrator: paul kruse does make two initial investments, but returns are nowhere near the 10% to 15% he's promised. after this, he makes no further efforts to invest his clients' savings. yorkshire financial is an illusion. >> there were no traders. there was no staff. he wasn't trading in stocks or bonds. it was all a lie. >> narrator: so, where is investors' money going? prosecutors say that for his recruiting efforts, jon receives $100,000. the rest of the money remains with paul. months after moving in with kruse, amy weatherford notices he's kicked his spending into overdrive. >> he bought a jaguar. he bought a mercedes. he had his whole 1994 bmw revamped into gator colors so it looked like a gator bmw. that was pretty cool, though. >> narrator: nearly $300,000 comes out of kruse's bank
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accounts as cash withdrawals. he starts dating a stripper, showering her with jewelry, clothes, trips, and a certain medical enhancement. >> he bought her a boob job for 5 grand. >> i mean, 5 -- we've got a $5,000 bill that he paid out of these people's hard-earned money. i mean, i think that's pretty despicable. >> narrator: kruse also spends hundreds of thousands of dollars to buy part of a stone company in jacksonville. and he spends more than $100,000 turning this somewhat average home in a middle-class neighborhood into a middle-aged bachelor pad. the centerpiece is the yard, which he tricks out with a $7,500 grill and a large fountain that weatherford calls "the ugliest thing i ever saw in my life." though they don't know it, kruse's hard-working investors are footing the bill. >> i mean, this was their nest egg to supplement their life.
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so he's actually looking people straight in the eyes and saying, "i'm gonna take care of your future," and he knows at the same time in his heart of hearts that he's stealing their future. >> narrator: oddly, it's not kruse's wild spending that will be his undoing. a few months after meeting him, weatherford confronts kruse. she says she's caught him sending inappropriate text messages to her 17-year-old daughter. >> "i'll buy you a bmw if you would show me your boobs. you don't have to tell your mother," stuff like that. i mean, lewd and lascivious in this county. i just... i was so mad at him, okay? 'cause this was my kid, and we were supposed to be friends. how dare you, right? i told him, "they won't find your body parts if you ever make a pass at my kid again. how dare you." that's about the bottom line. >> narrator: when asked about this by "american greed," kruse did not deny the story. after weatherford first discovers the texts, she decides she wants revenge.
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she has an inkling that something is fishy at yorkshire and feels there's only one option. >> taking his ass out. you want me to put that more mildly? i'd rather not. he was going down one way or the other. if it wasn't gonna be on the paperwork and finding out how he's spending this money, it was gonna go a whole different route. it didn't matter, you know? but this guy was gone. >> narrator: to take him down, she needs more information. she knows kruse needs help getting organized and goes to him with a proposal. >> i said, "look, paul, if you need to get these promissory notes out or whatever you need to get done, let me do it for you as a part-time job, and we'll be good to go." he was all for it. it was like he trusted me completely. what a fool! [ laughs ] what a fool! >> narrator: coming up on "american greed"... paul kruse's plans tudeadly. >> i sometimes like to call it my "breaking bad" case.
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♪ >> narrator: after allegedly trying to seduce her teenage daughter, paul kruse agrees to let amy weatherford help him with his fraudulent company's books. he thinks she's there to help. but she's not. looking at kruse's bank records for a single month, what she sees is shocking. >> $400,000 in, $400,000 out. how do you spend that in a month? i don't know. i don't know what he was spending it on. all's i saw was cars, jewelry, trips. >> narrator: but she's doing more than just sneaking a glance. >> i copied everything 'cause i knew something was wrong.
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how can he do this and i'm not seeing investments? there is nothing in any of the files for stocks, bonds, anything. so, i e-mailed the fbi, and i swear to god, the very next day, i got a call from byron thompson. >> narrator: at the end of march 2011, paul kruse takes a trip to china, and weatherford brings agent byron thompson this huge box of papers from yorkshire financial. it's not long before he realizes that kruse's operation is a scam. what's not so clear to him is how and why kruse turned bad. >> he's a confusing individual. i looked a lot at his background, and i learned about two different people. the early paul kruse was a licensed securities broker who, you know, legitimately managed people's money. and then, at some point, not knowing how it happened, he came up with this scheme that, to me, was just so callous and brazen because he knew these people
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really well, and he knew the money that he was taking from them was all they had and, in some instances, all they were ever gonna have. >> narrator: in july, agent thompson heads from florida to washington state, where jon kruse has recruited the bulk of the scam's victims. >> when i went out to greet some of these people for the first time who were their long-term friends, associates, and knew them well, some of them, it was pretty difficult to convince that there was a scam at all. they thought their money was still safe, and they hadn't experienced a problem out of it. >> narrator: thompson says that for some, the conversations are difficult. >> some people, you know, the light comes on, and they realize, "oh, my goodness, you know, this person i've trusted for all these years that knew, you know, i'm not a wealthy person -- this is my life savings -- they've stolen our money." >> narrator: that fall, hoping they can stop the bleeding, the feds begin seizing kruse's
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assets. agent thompson meets with paul kruse, but he says he won't talk. by the end of 2011, investor darlene jones has begun to notice that her safe investment might not be so safe. she's having trouble getting money from kruse. >> paul kept telling me -- he said, "you don't understand what's going on." that's all he would tell me. he said, "there are some things going on, and you don't understand," and i said, "no, paul,don't. i don't know what's going on." i said, "am i gonna get a check?" and he says, "i'm not sure. we'll have to see what happens." >> narrator: what happens is that one month later, fbi agent thompson's phone rings. it's paul kruse. >> he called me and said that he was tired of fighting the case, that i knew he was guilty and he knew he was guilty, and he wanted to come in and just face what he had done. >> narrator: two days later, kruse comes to the federal building in jacksonville, where he signs a written confession.
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>> a portion of that statement read, "investors were not told the truth about their investments. sometimes i solicited investors, and sometimes they were recruited by my brother, jonathan kruse. i am remorseful for what i've done. i've hurt a lot of people by stealing their retirement savings. it is my desire today to take full responsibility for what i've done. it was like a ponzi scheme, and i'm admitting i'm guilty because i amguilty," and it was signed "paul s. kruse." >> narrator: for thompson, it feels like it's time to close the book on kruse. >> i thought that was the end of the case. it just seemed like all of the fight had gone out of him. he wanted to admit what he had done wrong, and he told his attorney, "in spite of your advice, this is what i want to do. i want this case over with. i want to plead guilty because i am guilty." >> narrator: but the odyssey of paul kruse is far from over. shortly after kruse confesses to fbi agents in florida, his
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brother jon is behind bars in washington state. but his situation has nothing to do with preying on financial victims. he's been arrested at this gas-station picnic table, trying to meet a girl who he thinks is just 13 years old. >> jonathan kruse had been arrested in connection with a "catch a predator"-type of investigation by the local authorities there in washington state. he had gone to have sex with a minor child. in fact, his criminal history had shown that that wasn't the first time. >> narrator: court records say that jon kruse has an extensive history of sexual deviance dating bayears, and a judge sentences him to serve at least 4 years and 10 months in state prison. then in march 2012, a grand jury in florida looking at the yorkshire case indicts both kruse brothers on one charge of
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conspiracy to commit wire fraud. a few months later, jon is brought to the east coast and locked up in the same facility as paul. apparently, this, coupled with his sex-crime arrest, is too much for jon to handle. >> he ended up hanging himself. he didn't leave a note. he left no reason why. but i think we can just put things together. he was 65. he had had a troubled past with children. and then he's looking at probably somewhere around close to 10 years on a federal charge, and he just apparently could not live with himself and took his own life. >> narrator: paul kruse has already confessed to running the yorkshire investment scheme that got his brother in trouble with the feds. but after jon's suicide, he's hardly blaming himself. >> he didn't take any responsibility whatsoever for getting his brother involved in
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his plan to defraud his friends and family. he put it on somebody else. >> narrator: next on "american greed"... paul kruse devises a murderous plan to get out of jail and get revenge. >> hey, is there any problem with having these people cremated? with having these people cremated? ♪ when a moment turns romantic, why pause to take a pill? or stop to find a bathroom? cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, or adempas for pulmonary hypertension, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach,
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>> narrator: it's just days after his brother's suicide. and on july 31, 2012, authorities move paul kruse to the baker county detention center. inside, he shares a cell with a man named dre, who is locked up facing federal drug charges. dre seems like a guy who knows how to make bad things happen. and kruse asks him for the name of someone who can do a couple of jobs. >> paul kruse trusted his cellmate. it may be because he thought that the cellmate had what we call "street cred" and that he believed that he, the cellmate, could help him out and get him somebody that was an enforcer. >> narrator: dre is more than happy to help kruse find an enforcer. and on september 4th, he places a call to a man on the outside
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named john o'leary. [ telephone ringing ] >> hello? >> hello. this is a free call from... >> dre. >> ...an inmate at baker county detention center. >> narrator: once he's got john on the line, dre hands the phone to kruse, who isn't afraid to get right down to business. >> uh... >> mm-hmm. okay. okay. uh-huh. >> narrator: it's hard not to
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understand the meaning of this call. kruse thinks that making amy weatherford disappear will make the case against him disappear, as well. it turns out kruse is hardly stopping here. >> he went from zero to 60, and i think it showed his true colors. he did not want to be held responsible for what he had done. >> narrator: kruse takes meticulous notes on how he wants his murderous plans carried out. and when he talks to john a week later, his list of people to kill has grown. >> okay. >> narrator: kruse wants john to kill weatherford and two former business associates. he claims they stole money from him. now, kruse says, he wants his money back and his associates
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to mark devereaux, an assistant u.s. attorney working the case, kruse's intentions are clear. >> he wanted to have her murdered... tortured... leave a note with her -- a fraudulent note making her sign a document saying that she's the one that came up with the plan, that she's the one that stole the money, putting all of the blame on her. >> narrator: before his visitor leaves, kruse says that if this plan doesn't work, he's got a backup that's sure to win him his freedom.
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since his brother's death, kruse has morphed from a white-collar schemer to a man who wants to kill a key witness, two business associates, and the prosecutor in his case. but there's a problem with kruse's plan. hit men cost money. and he has none. >> well, what does a schemester do? he does another scam. at the very time he's trying to get the hit man to get out of some lies because he had stolen money from his friends and family and clients, he ends up lying to the hit man. >> narrator: in this document, kruse writes down the big-dollar figures that each of his victims can pony up. before digging each hole, he wants john to take them to their banks and have them withdraw this money. as payment, john is to keep a portion and pass the rest on to kruse.
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of course, hit men don't work on consignment. they want a down payment. so kruse calls his brother dave to tell him about his plans and make a request. >> he was under the illusion that i owhim $10,000. and i was supposed to come down there... and make contact with the killers... um, and pay 'em. >> narrator: but dave doesn't have $10,000 just sitting around, and even if he dihe wouldn't use it to help his brother with his "get out of jail" scheme. >> i told him -- i said, "this is insane for you to think that you're gonna get by with any of this." >> narrator: paul does not take his brother's denial well. >> as i recall, he just hung up. um...
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>> narrator: next on "american greed"... prosecutors find something belonging to kruse that's unlike anything they've ever seen before. >> not in a trial. i don't even think in a horror movie. this just shows a window into his mind and what he was thinking about. he was gonna stop at nothing to try to get away with this crime. ♪ ♪ follow us @americangreedtv on twitter. follow us @americangreedtv on twitter. we'll be right back.
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plans. but before he's eating a steak at a fancy restaurant, he has one more thing for his hit men to tell weatherford. >> all right? okay. all right. yeah. yeah. [ gunshot ] >> narrator: kruse believes his freedom is within sight. in the hours after the call, he sits down and pens a letter to his brother dave. in it, he writes that amy weatherford has confessed to stealing his investors' money. she's admitted thshe was the one who put the scam together and that she couldn't handle all the lies anymore and decided to kill herself. >> paul is clearly giddy about the fact that he now thinks that amy weatherford's dead. paul's gonna get away with murder of her. he's also gonna get away with the entire ponzi scheme, and
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he's gonna get away with it in front of the eyes of his family, too, because amy weatherford, in paul's mind, caused the death of his brother. >> narrator: in kruse's cold-blooded mind, it all seems to make sense. but there are a few hitches in his plan. amy weatherford isn't really dead. his cellmate, dre, isn't really his friend. and john o'leary isn't really a hit man. >> mr. kruse thought my name was john o'leary, but, in fact, my name is john leahy, a special agent with the bureau of alcohol, tobacco, firearms and explosives. >> narrator: at this point, the only hit man kruse has actually seen is richie, a.k.a. atf agent rick samples. and the day after the last phone call, atf agent john leahy comes to the jail to introduce himself and let kruse in on the secret. leahy says he senses no remorse
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from the man whose voice he now knows all too well. >> i mean, i never saw him face-to-face till the day in the cell, but just the way he laughed... >> [ laughing evilly ] >> he gives that laugh, it's like, man, it's like the devil laughing. >> narrator: after he's caught, guards move kruse to solitary confinement. when they do, they search his belongings and find a document he's written -- a sick recipe for how to get weatherford to confess. >> mr. kruse wanted amy weatherford tortured and then killed. and he actually wrote out a list of, step by step, how the hit men should do it. the first step is knock on the door. when she opens it... hit her, knock her unconscious. step three, strip her. step four, sit her up in a chair with arms. step five, duct-tape her legs and arms to the chair and put tape over her mouth. step six, put a hood over her head.
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step seven, shove a curling iron... up inside her. >> narrator: former justice department attorney ryan rohlfsen says that in all his years as a federal prosecutor, he's never seen something like this before. >> not in a trial. i don't even think in a horror movie. this just shows a window into his mind and what he was thinking about, and, really... he was gonna stop at nothing to try to get away with this crime. >> narrator: and even after learning the truth about hit man john, kruse isn't about to stop scheming. authorities have not yet told him that his cellmate dre was the one who set him up, and kruse attempts to slip him notes, warning him that now they are both in grave danger. >> "let me put this straight. john o'leary is an atf agent. he duped you and me. he needs to go before he can testify against us, or we will
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be in prison for the rest of our lives. you need to get his ass... period, end of story." >> narrator: these notes are intercepted. >> so, he was actually willing to kill amy weatherford... two business associates... a federal prosecutor... his own brother... and then, after he learned that special agent leahy wasn't the hit man, he wanted to have special agent leahy murdered. so, now it's six. >> and that's his mentality. every time he gets caught, every time he gets caught with committing another crime, instead of taking responsibility for it or saying, "okay, you win [chuckles] he keeps trying to cover it up. he keeps trying to commit more crimes. he just goes further down into that hole of greed and crime that he just doesn't seem to be able to come out of. >> narrator: next on "american greed"... it's the hour of reckoning, and paul kruse is still looking for a way out. >> he thought of himself as an amazing salesman, so he kept trying to sell and sell and
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advisor and friend. >> in the courtroom, paul could not even look at me. he held his head down the whole time i was there... and would not even look up at all. >> narrator: also there to testify are three people kruse wanted dead... atf agent john leahy... amy weatherford... and his own brother, dave. >> i didn't feel angry. but i was willing to cooperate fully because i thought... he was truly a danger to society. if he could kill a brother for nothing, i think that he deserves to be where he is. >> narrator: there to present the case are prosecutors ryan rohlfsen and one more of kruse's intended victims -- mark devereaux. a jury takes less than two hours to find kruse guilty on multiple
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charges of mail and wire fraud, conspiracy, and attempting to kill a witness. but even after the verdict is read, he's still looking for a way out. when he returns to court for sentencing months later, he presents the judge with an audacious plan. >> he asked the judge to release him from custody so that he could start working again and trying to pay back some of the money he had taken from the victims. of course, the judge did not go for that. >> narrator: instead, he sentences paul kruse to 30 years in prison. it seems all his murderous plotting has backfired. >> had he been convicted at trial of only the financial fraud scheme, you know, his jail sentence would've likely been a minimum-security assignment for a few years. he then just went for broke and tried to get away with all of it. >> narrator: in the scam he ran, paul kruse was no bernie madoff. he didn't steal billions.
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but to victims like darlene jones, the money he stole was all the money they had. >> i've already lost my home. i had to file bankruptcy, and i'm not going to be able to enjoy the things that i thought i was gonna be able to enjoy. at this point, there's not that much money. >> narrator: to those who stopped kruse's scheme, there is a small upside in knowing that they prevented him from ensnaring even more victims. kruse's downfall is due in no small part to one woman -- his former assistant, amy weatherford. she seems glad to have helped out. >> that man got exactly what he deserved. and i've never had the chance to send him a card in prison to say, "ha, ha. i toldyou i'd get your ass. gotcha."
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>> welcome to the shark tank, where entrepreneurs seeking an investment will face these sharks. if they hear a great idea, they'll invest their own money or fight each other for a deal. this is "shark tank." ♪ my name's steve gadlin and i live in evanston, illinois. (bird chirps) i live a really normal life. i'm a dad. i'm a husband. i love my family. i work a 9-to-5 job building web sites. a lot of that's just sitting at a computer staring at code all day. so i think it's important to fill your daily life with strangeness, with exciting things.
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