in reality, the living room set stays right on his showroom floor. but the $5,000 goes into menaged's pocket. lucero: in an attempt to legitimize the fraud, scott menaged did purchase some money orders from a bank and then tried to pay down that line of credit to sort of keep the fraud ongoing and not raise any flags with the bank. and fortunately, it was so egregious that it was noticed. narrator: noticed, but not before scott menaged makes off with more than $2 million from two banks. next on "american greed," the feds stay covert and continue to investigate, for there is a larger question at hand -- why would a hugely successful real-estate investor need to commit credit card bank fraud? everything that was tied to scott was tainted with some sort of fraud, some sort of lies.

it just always seemed to be, "does this guy stop?"

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save up to $400 a year when you switch. plus, save even more with $150 off galaxy a70. click, call or visit a store today. narrator: in a suburban phoenix subdivision... in the home of businessman and father denny chittick, in the office where he runs his real-estate lending business,

sits a broken man. his fatal mistake -- trusting scott menaged, who owes him and his investors $31 million. and menaged has just filed for bankruptcy. denny chittick learned that scott menaged filed for bankruptcy, and denny chittick is distraught at this point because he had given menaged tens of millions of dollars from his friends and he's wondering what's going to happen. narrator: chittick's journal entries offer a peek inside the mind of a man whose options are bad and worse and who is spiraling down a dark hole of regret. june 6, 2016 -- "i spent my entire waking hours thinking about this mess, how i should have done things differently and what i am going to do..."

he was working with scott menaged to try to come up with a plan to earn back the money that had been stolen. that involved getting more money from investors and investing some more with scott menaged, but he found out that that money was being stolen, too. he had trusted scott menaged to take that money and use it to go buy foreclosed homes at a discount and he had learned eventually that that wasn't done. narrator: june 13th -- "scott was supposed to call me, never did, claims he's going to get this thing solved. i have little faith. he just strings me out with promises and dates and times that never happen." denny chittick was clearly depressed. he -- it was obvious he hadn't slept for weeks. who knows? maybe even longer than that. we understand he might've been taking sleeping pills. he was just running around for well over a year

trying to fix this behind the scenes and to avoid a super disaster. narrator: june 14th -- "i started making a list of people i would write a suicide note of explanation to. i just have this overwhelming feeling this is going to come crashing down on me any minute." in july 2016... chittick and menaged meet at furniture king to discuss menaged's impending bankruptcy deposition. chittick secretly records the conversation. menaged: it's a closed-door deposition and they are going to ask me a ton of questions based on all the bank statements and everything that they have. lucero: during the investigation, we learned that denny chittick had made a recording with scott menaged. he approached scott menaged about the fraud, and scott basically made excuses with regards to his activity.

narrator: menaged tells chittick that most of the money he owes densco -- $30 million -- is actually safe and being held with auction.com, an online marketplace for foreclosure buyers. but he says that no one can know about this, or the bankruptcy court will go after the money and they will never be able to pay back denny's investors. i will never say the word auction.com. i will never say -- the second i say that, we're both [bleep] ultimately the bulk of the monies are going to come back when this bankruptcy is over. chittick: scott, i'm telling you, if -- if the investors don't get their money, i will be sued into oblivion the next morning. we absolutely have to talk to auction.com, and they have to give me money back. they absolutely have to. if we go there right now or you call them right now where i'm on the phone. we have to. if we don't, i'm dead. i am dead. denny confronts scott menaged and says, "what's happened to all this money? where is it?"

and scott says, "well, some was stolen, but a big chunk of it is invested with a company called auction.com and we're going to get those millions back. don't worry." hey, what -- what it is or what it's not, do you think for 60 days i can keep this quiet by placating to my investors and paying back, you know, their interest or whatever and then in 60 days, they give you your bankruptcy dismissal and you're done and then auction.com wires you the money, you wire me the money, and we go our merry way? that's -- that's our plan? you got a better plan? what's a better plan? i -- i don't have one. expose it? i can't expose it. i don't have one. i mean, i'm taking all the [bleep] heat on myself. the only reason i'm doing it is because i know at the end of this whole [bleep] rainbow, that there is 30 [bleep] million dollars that's going to make everyone quiet. it didn't seem that scott menaged, you know, took much responsibility for his actions, leaving denny chittick just even more devastated.

narrator: next on "american greed"... there is no pot of gold at the end of the rainbow, only a pot of lies. those excuses were bogus. it was just scott menaged's way of brushing denny off. chittick: scott, i'm telling you, if -- if -- if the investors don't get their money -- i'm dead, scott. i am a dead man walking. narrator: hear more of menaged's plan to weasel out of his fraudulent mess. go to americangreed.cnbc.com. want inside information from the show? join the "greed" social network. like us on "american greed's" facebook page. we'll be right back.

♪ narrator: on july 28, 2016, denny chittick's ex-wife pulls up in front of chittick's arizona home with their 10- and 11-year-old sons. she hasn't heard from him in a couple of days, which is highly unusual. she drove over with the boys. the boys ran to the front door. it was locked. so they ran around the side and jumped over the fence, and as they ran towards the house, they saw their father hanging with a luggage strap around his neck, and he was dead. and this is something that two young boys should never have to see in their lives.

and they were so frightened and afraid, they ran back and they tried to go straight through the fence and they broke the fence, but they couldn't get through and they jumped over and ran to their mother and their mom called 911. narrator: first responders pronounce denny chittick dead on the scene. he is 48 years old. in chittick's home office, investigators find several notes. ajamie: when they went inside, they found a little note among many other notes, but one that jumped out at them was a note written to denny's sister and it said, "go to mom and dad's condo in phoenix, go inside, go to the washer and dryer, open up the dryer." the police saw that and so they immediately went to denny chittick's mother and father's condo. they went inside. they went to the washing machine and the dryer machine, opened up the dryer, and in there was a box of cash.

a bunch of $100 bills. narrator: the box contains $521,000 and another note addressed to chittick's sister, telling her what to do with the cash. ajamie: they went back to the house and found a bunch of boxes that he had laid out with all his financial records in them and other notes around the house. a note to his boys, a note to his investors and others. and some of the notes had great detail about all his finances and you could tell by going through these notes that clearly something bad had happened to him financially and something terrible had happened to his business. narrator: in a five-page apology letter to his investors, chittick writes, "i owe you an explanation and a lot of money... the guilt, embarrassment, humility,

and any other adjective you can add in there is overwhelming. going through the legal process is an unbearable thought. years spent in courts and lawyers trying to settle this all out. meanwhile having to face all of you. i can't do it." when you read the very long sort of suicide notes that denny chittick wrote to his investors and then wrote a long one to his sister, you see there's a man there who's desperate, who's depressed, who's confused, who knows he's been cornered and he just sees no way out. narrator: "i love my family and my boys as much as any of you do your families. i can't put them through this face to face. i've decided to be my own judge and jury and i decided the death penalty. i'm never going to see my amazing boys grow up." it just broke my heart.

i heard how he was found. and i was just in shock, complete and utter shock. anybody who's anybody in our industry knew denny, and knew, you know, what kind of guy he was. and he didn't deserve that. lucero: he felt guilt that he wasn't aware of the fraud, that he didn't identify it. there was gonna no be recovery for his investors. he wanted his family, he wanted his friends, he wanted his sons to be made whole. and unfortunately that wasn't going to happen. he felt that taking his own life was the only way -- was the only way to handle that. narrator: in the aftermath of chittick's death, wendy coy with the arizona corporation commission is charged with protecting densco's investors... there were approximately 100, over 100 investors, over $50 million raised, and there was nobody, no other employees,

nobody to take over control of the business. we started locating investors. we started getting the offering documents and found that, yes, densco was raising money from investors with promises the investment would be secured with first position deeds of trust and promising returns. narrator: within two weeks, a judge appoints a receiver to take over densco and figure out what is going on. fraud attorney tom ajamie works with the receiver on the case. as the receiver is going through, he keeps seeing that a bunch of these loans to purchase homes were going to a guy named scott menaged. the day i go out of business will be the day that cows fly. ajamie: and menaged's name keeps coming up. so the receiver starts doing a little checking around and seeing that there's a guy named scott menaged, he was on a reality tv show and also he'd filed for bankruptcy. so that leads them to explore who was scott menaged

and why is he involved in all of this? narrator: attorneys for the state are soon in touch with investigators from the federal government. they realize they are both taking a hard look at scott menaged. the irs and us attorneys already have a case on menaged for credit card bank fraud. now there is more fraud to investigate. edelstein: as we dug into the densco portion of the fraud, it became very clear that there were a lot of false documents that scott was creating. as we dug into the receipts for the purchase of real estate that never was actually purchased, it included cashier's checks, which scott would go to the bank, obtain a cashier's check, which was supposed to be the down payment for real estate, take a picture of that, forward that picture to denny chittick, and then imm3,000 loans that scott menaged obtained from densco, only 96 of those had any relation to real property.

the money was just being siphoned off by scott menaged. but denny chittick, he saw those documents. he believed the transactions were occurring, and it wasn't until scott menaged's bankruptcy that denny chittick realized that it was all fraudulent. narrator: even menaged's original story about his cousin stealing from him turns out to be a lie. denny would send him that money, and scott menaged would spend it on -- on himself. narrator: next on "american greed"... according to court testimony, scott menaged, ever the optimist, tries to spin a man's death into his own good fortune. when scott menaged learned that denny chittick had killed himself, he said, "that's a gift. dead men don't talk."

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narrator: may 16, 2017 -- scott menaged is charged with multiple counts of fraud for scamming two banks out of more than $2 million in a credit scheme through his furniture stores. it was our fear that additional funds would be stolen, additional individuals' identity would have been stolen. so at the time this case was charged, it was to stop an ongoing fraud. narrator: that fraud, however, is a pittance.

menaged has also defrauded his lender densco and its investors out of more than $30 million. edelstein: this was essentially sort of a desperate act that scott menaged engaged in because the larger fraud, he was no longer receiving funds from that, and he -- he had a substantial amount of expenses and he was still living a pretty extravagant lifestyle. so in order to get his hands on money quickly, he utilized this credit card scheme. once the credit applications were approved, it was almost an instantaneous transfer of funds from the bank to his accounts. narrator: densco victim anthony burdett lost more than $400,000 to menaged's scheme. burdett: i had all kinds of things plotted out, right, in my mind. first you're shocked and then you -- the anger is just unbelievable to think, you know, here we were getting these monthly statements and saw this money building up.

and even though we didn't need it at the moment, we knew it was going to be there when we needed it. so, yeah, i got very angry and... yeah, played out all kinds of horrible scenarios in my mind on what i would do to scott menaged, for sure. narrator: in october 2017, as part of a plea deal with the government, menaged pleads guilty to conspiracy to commit bank fraud, aggravated identity theft, and conspiracy to commit money laundering. he is sentenced to 17 years in federal prison. edelstein: the sentence in this case was the -- the maximum that he could have received under the plea agreement. and it also required him to pay restitution to the victims to make them whole once he is released from prison, so to the extent that he has to answer for the totality of the crimes he committed, not just against the banks

and the individuals whose identities he stole, but also densco, denny chittick, and its investors. it was a sentence that was appropriate considering all the facts of the case. narrator: at the sentencing hearing, scott menaged's former employee veronica castro, also convicted of conspiracy to commit bank fraud, testifies that menaged thought chittick's death would help him get out of trouble. she testified at the sentencing that scott menaged described denny chittick's death as a gift. he said to her, "it's a dead man's word against mine," and that was with regard to the -- the fraud transaction that had gone on for many, many years and the huge amount of loss. hopkins: he got 17 years. he's paying a price. that's a large portion of your life as a relatively younger man. and he has kids. this is -- it's just a horrible story from top to bottom. denny took his life because of it. he has kids and family. it's just a sad story all around.

there were so many victims. it's not just the money, the people that have lost money. it's not just the investors. it's the families. it's everybody around that was truly devastated by his greedy actions. narrator: scott menaged has lots of time on his hands to consider where his actions got him, whether or not it will change him remains to be seen. burdett: i don't know how they come up with these sentencing guidelines. i mean, the lives that man destroyed, it certainly wasn't long enough for me. i'd like to see him become an old man where his -- his crime streak wouldn't be in him anymore 'cause he's just dangerous. laugh all you want, guys. i'll be the one laughing all the way to the bank. burdett: you know, when a person doesn't have any moral compass to go by, he's a real dangerous person. captions by vitac -- www.vitac.com