It’s just, it’s just too much money to be made easily.
[00:00:37] Will Johnson: Last week joining us we had Gerri Walsh.
So thanks for being back once again.
[00:00:45] Gerri Walsh: Thanks for having me.
What does FINRA stand for and what is the foundation?
[00:01:10] Will Johnson: Okay.
And we do that through outreach uh, and through research.
Um, we’ve even done some research with AARP Foundation.
[00:02:20] Gerri Walsh: And that’s very comforting.
One of the best things an investor can do is ask questions and to keep on asking questions.
Where is my money?
How could I lose it?
How liquid is this investment?
How does it make money?
How does it lose money?
[00:02:48] Will Johnson: I want to stress that people should look for a registered broker.
[00:02:52] Gerri Walsh: Absolutely, and this fellow never was.
And she was learning a lot about Darren Berg, his business and his past.
Kenneth Hines worked as a special agent for the IRS for 25 years.
The Berg case naturally came to his office.
[00:04:58] Will Johnson: That’s pretty much the definition of a Ponzi scheme.
[00:05:40] Will Johnson: But Berg seemed to be downplaying any sort of big time criminal strategy.
This was far from the truth.
Among the hundreds putting money into The Meridian Group was a well-known best-selling mystery writer.
[00:05:59] J.A.
Jance: My name is J.A.
I started writing in the early ’80s.
I write murder mysteries, primarily, and mostly police procedurals.
[00:06:13] J.A.
Jance: I never met the man in person.
The case was complex and tangled.
Berg was pretty skilled at moving his money around.
He is operating all of these different businesses and subsidiary companies and funding his lifestyle.
[00:07:23] Ciara O’Rourke: More than 100 million through The Meridian Group.
Were there people who invested, others that you’re aware of that had invested that much?
Some people lost everything.
Investing 500,000 dollars or losing 500,000 was a horrible thing to do.
It’s just a horrible thing to happen to you.
And you know then you look at someone might lost 100,000 uh, invest everything to them.
You know, it’s just, regardless of amount, right?
They have nothing to live on, ‘cause they lost everything.
[00:09:04] Kenneth Hines: Yes, exactly.
That’s one thing.
And in some cases, you know it dries up when the money dries up.
So people were running to other ways.
The police finally put the handcuffs on him.
Jance heard about Berg’s arrest on the news.
[00:11:28] J.A.
Jance: I found out about it in a newspaper article.
It felt like my stomach went through the floor.
It was a shock.
But of course, it was true.
Uh, even to the court process.
Uh, investigations can take uh, years to put something together like this.
He wasn’t, was he completely truthful or not?
He was helping some, but they don’t believe, might have been completely honest.
[00:12:31] Will Johnson: It was up to a judge to decide Berg’s fate.
Ciara O’Rourke read letters that Berg’s mother and sister wrote to the judge.
[00:14:41] Kenneth Hines: Yes.
And that they were collateral as a result.
[00:15:47] Will Johnson: Darren Berg was sent to a prison in Atwater, California.
The story’s far from over.
[00:16:59] Will Johnson: Berg wasn’t just missing from the inmate count.
So, or “walked away from prison.”
[00:17:17] Ciara O’Rourke: I thought, how do people escape from prison, really?
[00:18:02] Kenneth Hines: Just that he’s got money somewhere.
[00:18:14] Kenneth Hines: Uh possibly, yeah.
[00:18:15] Will Johnson: Possibly.
[00:18:57] Will Johnson: J.A.
[00:19:03] J.A.
Jance: He escaped with some kind of help.
Well you don’t get; you don’t get to fly on a private jet.
I know something about private jets, and private jets cost a lot of money.
He had help, he had money, he had assistance, and they, nobody cared.
Nobody’s really trying to catch him.
Nobody’s trying to get our money back.
I asked Kenneth Hines about his personal feelings about Berg’s escape after working to put him behind bars.
Others thing that there’s no way that he’s ever going to turn up again.
[00:20:35] Will Johnson: J.A.
Jance deals with her anger and feelings about the case by writing.
[00:20:45] J.A.
[00:21:04] Will Johnson: There’s a weird Hollywood twist to Berg’s story.
Along the way, Ciara O’Rourke talked to a former Berg employee.
He was able to tell her a lot about the culture of The Meridian Group.
He also told the story of a lavish party Berg threw with A-list musicians.
[00:22:11] J.A.
Jance: How can this be?
How could this have happened?
Retirees who’ve gone back to work in their ’80s to venture to make ends meet.
So what can you do?
How can you avoid an investment scam like Darren Berg’s?
Kenneth Hines says there are red flags you’ve got the option to look out for.
Uh, look behind the numbers.
Ask them questions, ask follow-ups.
Uh, see what else is going on, see what else is out there.
Those are the kind of things you hear people say.
So there are so many different little nuances to this.
[00:25:37] Will Johnson: There are a lot of people who want to find Darren Berg today.
I can imagine a wall with a map and clues and leads and agents passing information back and forth.
Jance isn’t so sure.
[00:25:47] J.A.
He flew away on a private jet somewhere and is gone for good, and still spending our money.
[00:26:26] Will Johnson: All right, I’m back with Gerri Walsh.
She is President of the FINRA Foundation, and we conclude our rather shocking story of Darren Berg.
You were just telling me that you actually checked to see if he’s been caught.
We have not heard anything, but you, you looked as well.
[00:27:01] Will Johnson: He is not, and where he is, apparently no one knows.
Do some cross checking.
[00:27:47] Gerri Walsh: Use, right, right-right.
It is a real tragedy.
It’s intelligent, often married individuals who are college educated, who have some knowledge about financial matters.
[00:28:59] Will Johnson: We heard an interesting point, uh that J.A.
Jance, the author made in the first episode last week of this story.
She was able, you know, and is able to build back what she lost.
It’s the inability to concentrate.
They lose faith in the industry.
They lose faith in their fellowman.
[00:30:01] Will Johnson: And you hear about lives really just falling apart?
I mean…
[00:30:05] Gerri Walsh: Shattered.
[00:30:05] Will Johnson: Yeah.
[00:30:14] Gerri Walsh: Especially depression.
You have heard them.
I’ve got this.
Darren Berg was in it for quite a long time.
[00:31:43] Gerri Walsh: And clearly a master of persuasion.
[00:31:45] Will Johnson: Yeah.
They’re, it’s not the long haul Ponzi scheme.
It’s often pitched that way, and it’s pitched as being as safe as that.
[00:33:03] Gerri Walsh: Absolutely.
[00:33:08] Gerri Walsh: And a great way to do it is to work with investment professionals.
The truth is that most investment professionals are hardworking, honest individuals who put their clients first.
Um, and you also want to have an amount of cash.
A lot of these investment schemes, they tell you that it’s a long term investment.
[00:34:56] Will Johnson: you could do it.
[00:35:21] Will Johnson: And you’re there answering it personally, right, Gerri?
[00:35:36] Will Johnson: Yes, hey give us the number.
[00:35:36] Gerri Walsh: Absolutely.
It’s 844-574-3577, toll-free 844-57HELPS, H-E-L-P-S.
[00:35:50] Will Johnson: Great.
Gerri Walsh is President of the FINRA Foundation.
Thank you so much for being here this week and last week talking about Ponzi schemes.
This particular one and in general, a lot of great advice, thank you.
[00:36:01] Gerri Walsh: Thank you.
Be sure to find us on Apple Podcast or wherever you listen to podcasts.
For The Perfect Scam, I’m Will Johnson.
END OF TRANSCRIPT
Darren Bergs crimes are catching up to him.
People such as best-selling author J.A.
Berg is charged with nine counts of wire fraud and one count of money laundering.
Considered a flight risk, hes remanded to custody.
Berg claims to be cooperating with authorities, but they arent sure hes being truthful.
They think he might be hiding funds and planning an escape, and what happens next proves their suspicions.
