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Audible subscribers can listen to all our episodes of Scamfluencers ad free right now. Join Audible today by downloading the Audible app. Sachi, I'm one of those people where I feel like you could just look at me and know I'm bad at math. So I do have to ask you, because I can't tell, are you good at math or were you good at math? I think you know I was never good at math in large part because when we record this show and any numbers come up, I will say them wrong. I'll invert the numbers immediately. Okay, well, in my mind I was like, one of us has to be good at math. I just don't have any good memories associated with math. Like, don't ask me about long division or PI. Actually, do you know anything about pie? I don't even like it as a dessert, so I'm not gonna be able to help you with this. Yeah, I know you hate pie. Well, today I'm gonna tell you about a guy who might be a first us. He was a financial scammer who rose to the top through math nobody was really able to check. And let's just say by the end of the story, you will end up only more confused by the mysterious nature of both the stock market and numbers. It's October 1987, and in Princeton, New Jersey, an economist and financial consultant named Martin Armstrong is working late. Picture him in a plain beige office, the glow from his boxy 1980s computer lighting up his face. Martin's in his late 30s and balding, with dark hair, a well trimmed beard and deep set eyes. He's squinting at his screen and typing furiously because something huge is happening in the markets. He flips on wpix, the local news channel. Good evening. Today is Black Monday, the day the Dow dropped more than 500 points, almost double the rate of the black that signaled the beginning of The Crash of 1929. Around the world stock markets fell faster than a skydiver without a parachute. Martin's an economist and a history buff, so he knows this crash will send shockwaves across the global economy. His own great grandfather fell victim to the last big crash like this in 1929. It wiped out his investments and left his family with generational trauma. And yet, as the panic unfolds on tv, Martin is excited. His heart is pounding as he pulls up a file on his computer. It's an economic model he built to forecast financial markets. Basically a line graph with pointy peaks and valleys and a whole lot of data attached. He Built this model in the late 70s, and he's used it to guide his choices as a respected financial advisor ever since. He charges thousands of dollars per hour for his services and has offices all over the world. Martin prides himself on being the smartest guy on the trading floor. But the truth is, he's hit a rough patch. He's in so much trouble for unpaid back taxes that the IRS recently raided his office. And a month ago he had to file for personal bankruptcy protection just to keep his house. All told, Martin's in the hole for more than $4 million. But as he watches the Black Monday coverage, he starts laughing because his economic model predicted this catastrophe to the day. Oh, I have a feeling he's about to become very, very rich. Because a lot of people are about to become the opposite of that. Well, yes, from now on, he'll be known as the genius who predicted Black Monday. He'll have investors banging down his door, eager to learn his secret. Martin will gladly take their money. But the prediction that makes his name will also send him spiraling into numerology. The number PI and a theory so outlandish his investors would flee if they understood it. But when his woo woo model stops working, Martin won't admit it. And that silence will lead to lawsuits, a judge with a personal vendetta, and the ire of an industry that wants to present itself as logical instead. Instead of what it really is. Recurring disaster cycles driven by emotions and vibes. It will cost his clients nearly a billion dollars and Martin his freedom. 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As you brush the baking soda particles dissolve to Help break down plaque and stains for a whiter smile so your teeth can feel clean, look bright and make brushing a no brainer. Try arm and hammer toothpaste. Simple, powerful, clean. From audible originals. I'm Sarah Hagie. And I'm Sachi Kol. And this is Scamfluencers. Martin Armstrong is a Wall street outsider who created a financial prediction model with a hidden connection to the number PI. But he's convinced it's more than just a model. He sees it as the key to all economic history. And whether it's fortune telling or just a fluke, Martin's system really does predict some major economic events. Enough to make Martin the numbers Nostradamus of the financial world. Martin's discovery will attract billions in investor funds, make him nearly untouchable in financial circles, and give him the confidence to make bets no rational person would make. But when those bets fail, Martin will face a choice. Admit the model was wrong or insist the whole world is conspiring against him. What happens next is either one of the greatest deep state coverups in history or an unhinged numerology scam that has Martin's followers still tangled up to this day. This is Martin Armstrong, the man who bet billions on pieces. It's 1965 in Mapleshade, New Jersey. Ida Armstrong, a homemaker with a warm smile, walks past the bedroom of her teenage son Martin. She peeks through the open door and sees him bent over his desk sorting through bags stuffed with pennies. He counts and catalogs each one. When Ida asks what he's doing, Martin patiently explains that these aren't just any pennies. They're very rare Canadian pennies and they're going to make him rich. Ida doesn't blink. She's used to her son's niche interests, like ancient history. When he was 9, he started reading Aristotle. Ida is happy to let Martin be his own strange self. She even lets him go through her handbag and collect her loose change whenever he wants. She wasn't surprised when about a year ago, her son got a weekend job working with a dealer in rare stamps, coins and gold bullion. Sachi, do you know what bullion is? Yeah. Bullion is like really high quality, high percentage gold. Usually comes in bars or in coins. Yeah, like precious metals sold in bar form. Yeah. And at the dealership, Martin mans a counter and studies the value of various coins and stamps. Before long, he real coin collection well beyond the contents of his mom's purse. Like those Canadian pennies he's carefully sorting in his room. Once he's done, Ida is stunned to see that Martin has around a thousand rolls. And she's even more stunned when several months later, Martin mentions that the value of these pennies has skyrocketed. Just as he predicted. Every roll is now worth about $1,000. And since Martin has around 1,000 rolls, Ida realizes her son is a millionaire. That's a lot of money. That's a lot of money for 1965. And it's a lot of money to realize that your son has. From Canadian pennies, no less. Well, Sachi? Unfortunately, Martin Scrooge McDuck's status is short lived. Another collector finds a big stash of the same coin somewhere else. With this new supply flooding the market, the coin's value plummets. And Martin's millionaire advent over. Just like that, Ida tries to reassure her son that sometimes these things can happen. After all, look at his great grandfather and all those losses in the great crash of 1929. For Martin, his personal coin fiasco brings home just how devastating the market's fluctuations can be. And it ignites a lifelong obsession finding a way to avoid repeating his family's mistakes. It's 1966, one year after Martin's ill fated Canadian penny adventure. He's now 16 and still working at the coin and bullion dealership. But today is his day off, so he's kicking back with the business section of the newspaper. You know, like all teenagers do in their spare time. One article in particular draws him in. It traces a chronological history of financial panics from one in Western Europe in 16, through the panic of 1907, when Teddy Roosevelt was president. With all these crashes laid out in a row, Martin starts to recognize a pattern. It's almost like the numbers start speaking to him. There seems to be a cycle to these crashes. Almost on impulse, he starts banging out some calculations. He takes the total span of years. The article covers 224 and divides that by the number of financial panics that occurred during that time. He comes out with the number 8.6. This is the average number of years between major financial catastrophes. Martin figures if he knows the average time span between crashes, he can make investment decisions based on whether or not a crash is likely coming soon. Think of it like catching a bus. If you know your bus comes every 8.6 minutes on average, you have some idea of how long you'll be waiting for the next one. You may not know the exact timing of every single bus, but you have a rough idea, and you can use that to plan your Day, Martin's head starts spinning with what this revelation could mean. If financial panics can be predicted, the person making those predictions has knowledge that people would pay a fortune for. This is interesting, but it doesn't strike me as like brand new. I'm sure economists have been doing math like this for a while. Predictive kind of guessing about the markets exists. Like it doesn't seem like this is a revolutionary thing. You're totally right. Martin doesn't know it yet, but he stumbled into his own self taught version of an economics principle known as cycle theory. The concept has been around for thousands of years. Some say the cycles are seven years long, some say 10. And some people say the whole thing is bullshit. This is what economists fight about at faculty retreats. But Martin is sure he's hit on something real. And though it will take time to figure out how to turn his cycle theory into influence and power on Wall street, it gives him the confidence to start manipulating buyers and sellers in a world he's already familiar with. It's 1972 and 23 year old Martin is pacing the vinyl floors in a New Jersey mall. The chlorinated scent of fountain water fills the air. Martin has moved up in the world of stamp and rare coin collecting. Now he runs his own shop here in the mall. But today he's just gotten some bad news that can ruin everything. Not even an Orange Julius from the food court could cheer him up. Martin never bothered to get a college degree. School always bored him. He prefers choosing what topics he reads and learns about, whether it's 8.6 year economic cycles or coins and stamps. He believes he knows better than anyone else what he should be studying. But by this point, studying rare coins and stamps is way more than a hobby. Dealing them is how Martin earns his living. Martin takes the stamp trade seriously. He's even a member of an organization called the American Philatelic Society, which is a fancy name for stamp collectors. Or at least Martin was a member of the American Philatelic Society. But as of today, he's been kicked out. The group has been getting complaints from Martin's customers who say he hasn't been fulfilling stamp orders and when they ask for a refund, he refuses. Which means either Martin has the rare items and just doesn't want to part with them, or he's pretending to hold stamps he doesn't actually have. Martin denies the accusation and says the Philatelic Society is prejudiced against him because of his young age. They are being prejudiced against me because I'm too Young and too smart and too sexy is an argument I have tried to use before. It is not as effective as you would think. And you know what? Props to him for using it in a world where none of that stuff exists in stamp world. But this isn't the first time Martin's been accused of scamming. A few years earlier, Martin advertised a set of extremely rare stamps for sale, including two dating back to 1904. No one bought them, but a few months later, a different collector advertised the same stamps with the exact same markings. So one of them was clearly lying. When the news broke, it caused an uproar in the stamp collecting community, with most members casting their suspicion on Martin. And it inspired others to come forward with their own stories about orders Martin's never fulfilled. You have to wonder, what was Martin thinking here? If someone pays you for stamps and they never show up, they are going to notice. But Martin has a huge amount of faith in himself and his own intelligence. Maybe he believes he'll be able to get his hands on the inventory once he finds a buyer. Or maybe he just thinks people are too dumb to realize what he's doing. Ooh, this is a real Icarus case. We get these a lot. I bet this is what gets him in the end. It's the sign of a troubling pattern, for sure. Martin never admits he's done anything wrong, but it doesn't matter. His reputation as a rare collectibles dealer is tarnished. With his stamp business on the decline, Martin has to forge a new path. So he turns his back to his 8.6 year cycle theory. If he can turn this idea from a theory to a real model, he can challenge the established wisdom of Wall street and prove that he's an intellectual giant worthy of respect while making a fortune. But for a 23 year old, that is one big if. It's the mid-1970s and Martin is across the pond in London, deep in the stacks of the British Museum newspaper library, where he's researching old currency exchange rates and pricing histories. After Martin scaled down his stamp business around three years ago, he pivoted back to his bullion roots and started dealing in gold. The official term for what he does is commodities trading. Gold is obviously a type of commodity. Unlike stockbrokers, who buy and sell shares of a company, commodities brokers buy and sell raw materials, from wheat and soybeans to sugar and cotton. Long before there were stock markets, these guys were in the actual market, haggling over gunny sacks of corn and potatoes. This is why Martin's research goes back so deep into history, he's trying to understand patterns formed throughout hundreds of years of commerce. Well, you know, I gotta give him this. Unlike a lot of our scammers, he's really doing a lot of research and work. Yeah, I mean, it is actually truly the first we've seen of someone who's going into the stacks and researching. Martin's research is super time intensive. And this is the 70s, so it's not like he can just ask ChatGPT. He has to travel all over the world to find the information he needs, then build a giant spreadsheet that will predict economic outcomes into the future, Also known as an economic forecast. Martin realizes that all the research he's doing for his own gold trading business might be valuable to other commodities brokers as well. So he turns the data he gathers into analysis and predictions and start sending out a newsletter to other traders. And those other traders are willing to pay. Soon, Martin is making more money on his advice newsletters than he is on trading gold. In 1979, Martin creates his most important forecasting tool yet. A unified theory of market patterns and historical cycles. The one theory to rule them all. He calls it the economic confidence model. And he'll stake his entire career and reputation on it. Are you ready to get into some nerdy economic shit? Yeah, but you may have to like Clockwork Orange. My eyes open for it. Don't worry, Sachi. If I understood it, you'll understand it. Okay. In the economic confidence model, it's the confidence part that's key. When consumers have confidence in the economy, they buy more things, which leads to growth. When they don't have confidence, they don't spend. In fact, sometimes they freak out and start selling off assets. So when confidence is super low, it leads to panics and market crashes. Martin's confidence model is built almost entirely around his 8.6 year cycle theory. He says that every 8.6 years on average, something major happens, with each news cycle getting more intense. So higher highs and lower lows. And then every six cycles, something even bigger happens, like the 1929 crash. By focusing on confidence, Martin is basically breaking down the markets as a bunch of feelings, the stock market as vibes. But since he's couching it all on historical data and patterns, the vibes talk feels rooted in science. Remember, Martin didn't go to school for any of this. He developed all these theories as an outsider, which means his analysis sounds really fresh and different from anything else out there. And the other investors eat it up. In 1983, he founds an analytics firm called Princeton Economics Consultants. To be clear, it is not affiliated with the university of the same name. His firm is just located near Princeton. But clearly he wants some of that Ivy League shine at the firm. Martin writes a market forecast newsletter for paid subscribers, gives seminars and offers one on one consulting. And in no time, Princeton Economics is a success. About a month after it launches, Martin is profiled in the Wall Street Journal. The article makes a huge deal about his fee, $2,000 per hour or more than $6,000 today. Can you please read this quote from Martin from the profile? He said, quote Our cyclical analysis works because it is totally based upon human emotions. That is what moves markets. Okay, this is spooky, but it is kind of helpful to have someone say the quiet part out loud, which is that all of this stuff is driven by feelings. It's driven by vibes. Like financial actors are not all logical. Nothing is robotic. Betting on the stock market is an emotional act. I'm grateful at least for that clarity. I totally agree. I feel like every time we do an episode about the stock market it never becomes clear because it is kind of based on feelings. So the only scam here is a scam of convincing people that it's possible to predict what the markets do, which every finance bro in history is at least a little guilty of. But Martin's position as a successful finance consultant does give him a real case of intellectual snobbery. And I get it. He's the guy who traveled all the way to the British Museum to study grain prices from the 1700s. Obviously he feels like he's the smartest one in the room. But the self confidence Martin exudes at all times is about to lead him astray and tempt him to do more corner cutting, rule breaking and risk taking. All of which will ultimately cost his customers nearly a billion dollars. With the Venture X Business Card from Capital One, you earn unlimited double miles on every purchase. Plus big purchasing power means you can spend more and earn more. The Capital One VentureX business card what's in your wallet terms apply. See capitalone.com for details. Living your best life means being extra where it counts and skipping the extra where you don't need it. Like in your cleaning products. That's where Seventh Generation comes in. Their bio based cleaning power delivers a powerful clean with nothing extra in the bottle. Need a dish soap that cuts through the tough grease? A detergent that tackles the worst stains and odors? 7th Generation handles it all without any dyes or artificial fragrances. Real clean doesn't have to come with a long list of add ons. Upgrade to a powerful clean without anything extra. Look for seventh generation dish soap and laundry detergent wherever you shop for your cleaning products. I feel like a legend. It's September 1987. Four years since that glowing Wall Street Journal profile. Now 37, Martin is sitting in his house in Pennington, New Jersey. But he's not basking in his success, he's panicking. If he doesn't act fast, he'll be in foreclosure tomorrow. He's down to his last few assets. A gold ring, the home he's sitting in, and $350 in cash. It should not have come to this. Princeton Economics. Martin's forecasting business had been booming. He opened offices in London and Geneva. His client list included foreign heads of state and the owners of gold mines, all paying Martin for his know how. But for all of Martin's economic smarts, he's ignored some pretty basic business requirements like filing legally required PA paperwork and paying taxes. This has put him in trouble with several government agencies. First, there's a Commodity Futures Trading Commission, or cftc. They've filed complaints against him for not registering himself as a commodities advisor and for improper record keeping. These may sound like minor infractions, but not when you're trading millions in gold bullion and advising foreign leaders. And when you aren't keeping good records, it usually means you're not reporting your real income. Which means Martin is also in trouble with the irs. The tax agency has seized a bunch of his records saying Martin has failed to report several major transactions. Martin is also in trouble with the state of New Jersey for tax avoidance. All in. Martin is $4.4 million in the hole and is about to lose everything. You know, putting aside whether or not Martin knows anything or not, he was making so much money advising people with this ostensible nonsense and he is going to lose all of it because he doesn't want to pay his taxes. That's dumb. He had it made. It's really, truly so stupid. So Martin files for bankruptcy protection to keep his home. But less than a month later, something happens that shakes everything up. Black Monday. The October 1987 stock market crash. This is the moment from the beginning of our story when Martin watches the news roll in. In this clip from CBS News, you can hear the uncertainty in the voices of the traders as they step off the trading floor. They're calling it the Monday Massacre, the worst drop in Wall street history. I just came from inside and it looks Like a madhouse. So crazy you can't. Nobody even expected it to be down this much. The crash is terrible news for just about everyone except Martin, because his economic confidence model predicted this market panic to the exact day. Of course, Martin's model only predicted the crash. It couldn't stop it. Luckily for Martin, that doesn't really matter. At this point in his career, only a fraction of his job is actually handling other people's commodities. A lot of his business is just giving advice. So the fact that his model is so right, even in hindsight, is hugely valuable to his reputation as a stock market savant. This is what's so spooky about the stock market, is that even if you're right about terrible, terrible news and you can't do anything to prevent it or help anyone, that is still considered good. Yeah, exactly. It's. Being right is the most important thing, I guess. And Martin immediately starts touting his correct prediction as a calling card. But privately, even he is kind of shocked that his model lined up so well with Black Monday. He worries that maybe his success was just a fluke. So he starts doing some additional calculations. He needs to prove to himself that it wasn't just a coincidence, that he really is that smart. As he's punching numbers into his calculator, he sees something that blows his mind. We know the 8.6 year cycle is key to Martin's theory of everything. But now he notices something new, something he Never clocked before. 8.6 years is equal to 3,141 days. The number PI times a thousand. So PI or the number 3.14 is a key component of geometry. And you can use it to figure out the circumference and area of a circle with a couple of simple formulas like PI r squared. But the history of PI goes way deeper than fifth grade math. PI was used by the ancient Greeks and the ancient Egyptians. Without PI, we might not have the pyramids or, or Einstein's theory of relativity. PI even factors into the structure of our DNA. It's wild. The true facts about PI sound like what an influencer would tell you right before she sells you crystals. It's all catnip for Martin, who's a smart guy and also a self taught history nerd with a huge ego. When he realizes that PI is at the core of his cycle theory, he doesn't question it for a second. Of course, he belongs in the pantheon of philosopher scholars, from the ancient Egyptians to the Greeks to Martin. For most of his life, Martin has been mesmerized by the power of cycles. How history repeats itself over and over. Now he feels like there's a cosmic reason why. To him, PI reflects a unified theory of the universe. He calls it the geometry of time. Ah, look, I'm bad at math and I guess there's a version of the world where all of this is true and he is a genius. But I have my doubts that, you know, figuring out one number and calling it the geometry of time, that that would make me a super genius. This is, as you know, nothing. Sarah. I mean, yes, it sounds like the ramblings of someone yelling at you on the street. We should also point out that many economists say that Martin's cycle theory is total nonsense. One professor of economics at Cornell later compares Martin's work to numerology. It might roughly fit the last three US Recessions, but little else. This whole pie revelation is going to transform how Martin sees the world and the amount of money he believes he can make. It's November 1993, six years after Black Monday. Martin's just turned 44 years old and is at the Jersey shore where November is not exactly beach weather. The summer tourists are long gone and the late fall wind is whipping over the dunes. But Martin doesn't mind. He's just bought a beautiful mulberry multimillion dollar beach house in the town of Loveladies, New Jersey. Take a look at this place. Oh yeah, this is like Malibu Barbie dream house kind of house. It's like on risers. It's clearly on the beach. It looks like a mall. Yes, it does look like a mall. It looks like a mall or like, like a fortress somewhere that has no homey value at all. It's kind of scary and sterile and Martin buys this property just three months after his bankruptcy case is finally settled. The one he filed six years earlier to avoid losing his previous home. The terms of the settlement let him pay back only a fraction of what he owed. Martin thinks a lot of rules are beneath him and is generally fine to thumb his nose at regulators. But it does come back to bite him from time to time. Remember how Martin got in trouble with the CFTC for bad record keeping? Well, he lost that case and now owes them $12,000 in fines. Martin could just pay up. It's not that much cash for a guy who manages millions at a time and has gold bars and busts of Roman emperors scattered around his house. But he doesn't believe he should have to pay 12k to some pencil pushing regulators, so he just doesn't. Instead, he faces the consequences, and his fight with the trading commission ultimately gets him blacklisted by US Regulators. He's no longer allowed to trade in American commodities markets. We see this sometimes in the scam stories we tell where, like, someone would get away with what they're doing if they just paid a little tax or, like, got a permit. This guy could keep doing this if he paid $12,000 to regulators. He doesn't do that, so he can't do it anymore. It's still a scam, but he would get away with it if he just did a little bit of paperwork. I know it's almost one of the dumbest things a scammer has done because it is so simple. And $12,000 is kind of nothing comparative to how much he has. But don't worry. Martin has a plan to get around that. He's going to stick it to the man by taking his business overseas. Martin has already spent time cultivating international clients. But now that he's unlocked one of the enduring secrets of the universe, the power of PI, he feels he has the power to do so much more. Martin is a true believer in his own work. And the thing is, he does have reason to think he's onto something. Ever since he called the Black Monday crash, it feels like his forecasts can't miss. His economic confidence model also predicted the peak of Japan's Nikkei index in 1989, which gave him a ton of credibility among Asian traders. Some Japanese clients even started calling him Mr. Yen. By 1991, Martin was taking on significant Japanese investments. As his reputation grows throughout the 1990s, Martin opens offices in Japan, Hong Kong, and Australia. He speaks at global economic forums, including one where he appears alongside former British Prime Minister Margaret Thatcher. His writings appear in respected economic publications like the Wall Street Journal, and he's interviewed by Bloomberg News. Equity magazine names him their top North American economist. But throughout his whole glow up, Martin doesn't breathe a word about PI itself. He just keeps calling it the 8.6 year cycle or the economic confidence model. And once he fully digitizes the model into a software program, he rebrands it as Socrates. Listen, that's good marketing. That's good marketing. It is. And it's perfectly situated to appeal to other men who think they have a towering intellectual and want to use it to make money and do no other good in the world. Maybe he thinks the world just isn't ready or that it will seem too mystical for the CNBC crowd. He's also worried that someone will steal his formula. Whatever the reason, Hai remains Martin's little secret. As he starts taking on more and more international clients, mostly in Japan, Martin is riding high on a wave of self confidence. Forget $2,000 an hour, he's now charging up to 10. And in his mind, he knows one of the eternal secrets of the universe, the geometry of time itself. Armed with that mystical knowledge and a reputation that keeps growing, Martin is about to go after the biggest payday of his life from some of the most powerful corporations in Japan. Corporations that are trusting him with money they cannot afford to lose. It's around 1997 and Martin is on stage in the ballroom of the historic Imperial Hotel in Tokyo. Ornate lighting panels cast the room in a golden glow. The banquet tables are laid out with fresh cut flowers. And as Martin peers out into the crowd, he sees a sea of men in dark suits staring silently back at him. Martin gestures to a graph projected onto the screen behind him. Every few seconds, he slows down so an interpreter can translate his speech to the high powered Japanese executives in the audience. It's been eight years since the crash of Japan's primary stock index, the Nikkei, and a lot of Japanese companies are sitting on devalued investment portfolios. These are companies from all sectors. Chemical manufacturers, electronics firms, yogurt makers. All with assets that are now worth way less than what the companies originally paid for them. Martin's pitch to these CEOs is they can transfer their trouble assets to him and he'll turn a profit for them. Martin will sell off these bad investments and reinvest the cash in safe, reliable American government bonds. The bond accounts will be managed by an American bank and overseen by Martin himself. After five or ten years, Martin will turn the funds back over to their Japanese account holders. Revived and replenished, Martin assures his audience that investing in U.S. bonds is not just safe, it's conservative. He guarantees a fixed rate 4% yield with the possibility of much higher gains, as high as a 25% return on investment. And he puts these guarantees in writing. Remember, Martin has real credibility with this crowd. He predicted the Nikkei's peak. He's Mr. Yen, and he's continually giving lectures, positioning himself as the smartest and savviest advisor money can buy. He calls his Socrates prediction model, quote, the first fully functioning artificial intelligence system in the world. Which, spoiler is not true. And then, on July 20, 1998, another one of Martin's pie dates hits and the US stock market peaks on that exact day. Soon after, the Russian ruble collapses, wrecking a major American hedge fund in the process and dragging the stock market down with it. Martin claims victory on this prediction too. His model looks infallible. So why shouldn't his Japanese investors trust him? Now it seems like many of his clients either don't know or don't care about Martin's pattern of tax evasion or his refusal to pay a small fine to a U.S. regulatory agency. But even Martin's official speaker's resume is full of red flags, like the fact that, quote, Armstrong has been studying market behavior since 1962. In 1962, he was 13 years old. Cassivi also claims he holds a degree in computer science and engineering, which he doesn't. You know, having done this show for a while, I know we're constantly like, these are easily verifiable facts that anybody could look up. But some of this stuff is like lying about how old you were when you started studying markets or lying about your degree. That's just not something people are gonna look up. Cause it's so mundane. Exactly. At that point it's like, would it even really matter? Who would think that someone's lying about where they went to school when they're offering Socrates to you? Yeah, yeah. Why would you ask? Any follow ups? Well, of course no one checks up on anything. But by the end of the 90s, Martin will manage to raise around $3 billion from these Japanese firms. He promises their investments are safe with him. But unbeknownst to his clients, Martin is already losing their money by the hundreds of millions. Well, either that or he's the victim of a global conspiracy crafted by the most powerful people in the world. It's 1998 and Martin is hosting his annual company party at his sprawling Jersey Shore beach house. He's invited clients from all over the world and he's pulling out all the stops. Like parking his gleaming new Ferrari outside for all his guests to admire. His girlfriend slash executive assistant, Tina, is keeping an eye on the past hors d' oeuvres and making sure all the glasses are full. Then a stretch limo pulls up into the driveway. Out steps a plain looking man with resting banker face. This is William H. Rogers Jr. Better known as Bill. He's Martin's longtime colleague and the president of the futures division at Republic Bank. We haven't mentioned Bill yet, but he's been quietly working with Martin for years, helping Martin manage his clients accounts which are set up at Republic Bank. Everyone's having a great time at the party, but Martin and Bill know something the guests don't. The money they've been investing on behalf of all these clients is disappearing. Martin brags that his Socrates computer model is infallible. But using it to guide his investment decisions has revealed PI's limitations. His clients accounts are all tanking. Maybe Socrates is the world's first AI after all. Because it is so confidently wrong. I mean, I guess this is what happens when you bank on Vibes. Literally. Truly. Yes. I mean, Vibes can only take you so far. Yeah, and what happened here isn't mystical at all. Martin promised his clients he would invest their money in stable government bonds, but he didn't. Instead, he placed risky bets on everything from crude oil and precious metal futures to various currencies. He thought his PI system would make him invincible. Now these investments are going bad all at once. At first, Martin and Bill try to keep this to themselves. But Martin's Japanese clients start to realize that they're not getting any statements, which means. Means they don't actually know what's going on with their money. So Bill sends out some reassuring letters from Republic confirming account balances and stating that everything's fine. But the statements he's sending are made up. They show higher amounts on the balance sheets than actually exist in the accounts. Theoretically, they're doing this to buy Martin time to recoup the losses. Instead, he instigates one of the oldest, least sophisticated tricks in the scammer playbook. The Ponzi scheme. Martin starts using money from newer clients to pay off existing investors and so on. What I just described to you is the official story, the one eventually published in newspapers around the world. But according to Martin, this isn't what happened. He claims that the Ponzi scheme stuff is all a plot to frame him and was cooked up by the CIA. I mean, Sarah, I'm not one to stand the CIA, nor am I one to defend them, but I think they are busy and probably had other schemes to cook up. I don't think this one was them. Yeah, there are governments to overthrow. They're not going to be focusing on Martin, you know. Yeah, yeah. Well, Martin will later tell the New Yorker, and basically anyone else who will listen, that the CIA contacted him asking to get a look at Socrates. Remember, according to Martin, Socrates is an all seeing and all knowing prediction machine. And because stock market crashes create global instability, Socrates can do more than forecast financial panics. It can also predict the fall of nations. Martin says this kind of forecasting tool is exactly what a shadowy agency like the CIA would want. In this version of events, he refuses to hand over Socrates to The Feds. And according to Martin, that's when the government starts trying to ruin his life. In September 1999, the FBI raids the offices of Princeton Economics and takes boxes of documents with them. Martin says this is a plot to make him the fall guy for Bill, who Martin says is the real crook. He swears Bill has been running the Ponzi scheme, not him. Or maybe this is all part of an even bigger scheme cooked up by the head of Republic Bank, Edmund Safra. Martin claims Edmund is a CIA asset or in league with the Russian mob, or both. This might sound like Martin's stretching a bit, but his claims will get a lot more oxygen a few months later when Edmund dies in Monaco under suspicious circumstances. There's a whole Netflix crime documentary about it. See, this is the tough part about this story is there's like 10% of it that is true in bananas and the rest of it is bullshit. Yes, and also to Martin's credit, crazy things happen all the time. So just not to him. Just not to him. I just don't think in this scenari. But, you know, he's definitely trying. Well, none of this international intrigue stuff convinces the U.S. attorney that Martin is innocent. In September 1999, he hands Martin a criminal federal indictment on 14 counts of securities fraud, wire fraud and conspiracy. Martin's wild claims don't faze the securities and Exchange Commission either, nor his old nemesis, the cftc. These regulatory agencies file civil suits against Martin, accusing him of defrauding his investors to the tune of nearly a billion dollars. Martin posts Bail set at $5 million and starts planning his defense. But first, he writes one last report for Princeton Economics and posts it on his website. It's a treatise that lays out his core economic theory. The secret number that holds the key to everything. Yes, he's telling the world about the real value of PI. Does Martin think that pie will exonerate him? Is this a screw you to the Feds? Showing the world his precious formula before they can steal it? It's hard to say. What we do know is that this desperate move will fuel a brand new image for Martin. A truth teller being silenced by shadowy government figures. And what the justice system is about to put him through will only make that story more convincing. At least to the most crackpot conspiracy theorists of the 21st century. Overwhelmed. That was me with diabetes. Hey, I'm Jabron. Between teaching and coaching, managing diabetes felt like an extra job. With the Freestyle Libre 3 CGM, I get real time glucose readings and have the insights to make informed decisions. My life feels lighter now. Learn more@freestylelibre us. The views expressed should not be used for medical diagnosis or treatment as a substitute for professional medical advice. Individual circumstances may vary. For prescription only. Safety info found@freestyleibre us. I'm Alice Levine. And I'm Matt Ford and we're the hosts of British Scandal. Yes, indeed. In this series, a Derbyshire couple are bored of their curtain twitching, lawn mowing suburban life. So they sell their house, build a yacht and sail off around the world. Which sort of sounds idyllic. Until a sperm whale sinks their boat and they begin to starve. Oh yes, and they didn't bring a radio because real sailors don't use radios, right? This is the story of Marilyn and Maurice bailey and the 117 days they spent lost at sea. Follow British Scandal wherever you get your podcast or listen early and ad free on audible. I feel like a Legend. It's January 2000 in Lower Manhattan, four months after Martin's indictment. The Honorable Judge Richard Owen presides. He's an elderly man with a shock of white hair and an expression that says, don't try me. As a federal judge for New York's Southern District, Judge Owen has overseen Mafia racketeering trials featuring murder and extortion. So he's seen some shit. Also, fun fact, he writes operas on the side. All of which is to say the man knows drama. But even Judge Owen can't quite believe what's in front of him. He looks down at the defendant, Martin Armstrong, and reads from a list of assets that grows more and more a bust of Julius Caesar, 102 gold bars, a bronze helmet and other antiquities worth nearly $16 million. These are just some of the belongings Martin's been ordered to surrender as part of the civil suit against him. His freedom depends on relinquishing these assets to the court. If he can't produce the goods fast, he'll be held in contempt and sent to jail. Martin's lawyer argues that his client has turned everything over. Anything missing from Judge Owens list, Martin just doesn't have anymore. But the missing items are no mere afterthoughts. We're talking $1.2 million in gold coins, which prosecutors believe Martin is keeping in a hallway closet at his mom's house. There are also electronic files from company computers that Martin claims were deleted by mistake. But Martin's assistant girlfriend, Tina, has testified Martin asked her to delete those files after making copies that he then whisked away to hide God knows where. The hearing stretches for hours into the early Evening, Judge Owen is getting grumpy. He thinks Martin's purposefully hiding assets, and he doesn't appreciate the arrogance. Finally, the judge has had enough. He holds Martin in contempt of court and sends him to the Metropolitan Correctional Center. Judge Owen thinks a little time at MCC will set Martin straight. Martin will hand over the missing coins and files, and then the real trial can proceed. But the gold and the electronic files are never materialize, and Martin remains in city jail for years. This isn't supposed to happen. The statute for civil contempt says the longest you can be held is 18 months. But every 18 months, Martin's case comes before Judge Owen, who once again asks him where the missing assets are. Every time Martin says he doesn't know, Judge Owen gets annoyed. And back to jail Martin goes. This is like Looney Tunes jail. They're just doing this over and over again. It's Groundhog's Day. What is this teaching anybody exactly? Trust me, the lessons learned here are very confusing. Okay? Meanwhile, Bill, the Republic banker who falsified all those account statements, never goes to jail. He takes a plea deal in 2004. By then, Republic bank has been acquired by HSBC, who paid for most of the Japanese investors lost funds. At this point, nearly everyone who's been wronged by Martin's schemes has been made whole, except for Martin himself. As the years roll by, things only get worse. Martin's attorneys appeal Judge Owens contempt rulings, but the appeals get denied. Twice. During that time, Martin is attacked by a fellow inmate and has to be hospitalized. Then he gets accused of damaging a rec room vent and is moved to solitary confinement. His health and his mental state deteriorate. He becomes bitter and paranoid, which really concerns his mom. Judge Owen refuses to give him a break, and Martin refuses to admit to any wrongdoing. Martin's finally met his match in terms of pure stubbornness, and now he's stuck in limbo. After nearly seven years, Martin finally cracks. On August 17, 2006, he pleads guilty to one count of securities fraud. By then, his time behind bars is the longest civil contempt jailing in federal history. And then he catches a bit of a break. The second Circuit Court of Appeals removes Judge Owen from the case. At this point, Martin has now spent as long in jail waiting as he would have spent had he just pled guilty from the beginning. This is evil, right? Like, I am actually perplexed at how the legal system is working here, which is that it isn't like this is just not how it's supposed to work. And when systems don't work like this, by the way. This is what yields conspiratorial thinking. Absolutely. Of course this is gonna happen to, like, a person or people who are like, I believe that numbers are talking to me, and I'm so smart, they're gonna try to keep me away from other people so I can warn them. Like, I'm such a genius that I'm gonna be kept in jail through this very complicated, circuitous path that is not lawful. This is not lawful. I know. It is really something else. And now Martin's fate is in the hands of Judge John F. Keenan. He hopes his guilty plea will encourage the court to give him credit for time served. But Judge Keenan says, no deal. Martin is sentenced to five years on top of what he's already served, to be carried out in federal prison. Martin's freedom is still years away, but like you said, Saatchi, his extreme mistreatment by the justice system has turned him into a sympathetic figure. Judge Owen wanted to make Martin an example. Instead, he turned him into a martyr. And that will give Martin more power and influence than he's ever had before. Once Martin is transferred to federal prison, things actually start looking up. He's placed in a low security facility in New Jersey, close to his elderly mom, Ida. Martin also gains access to a typewriter and immediately starts writing and predicting again. He fills page after page with economic advice, opinions on capital flows, and, of course, his 8.6 year cycle, which he's now openly calling the pie cycle. Then something else swings in his favor. His pie formula seems to point to the height of the 2007 housing bubble, right before the 2008 global financial crisis. Just like that, financial analysts start paying attention to him again. In 2011, Martin gets released just in time for the rise of social media. He launches a new firm, Armstrong Economics. On the company website, he dispenses his particular brand of wisdom about the financial world. Think a substacker before substack. He's no longer allowed to manage securities for other people. But there's nothing stopping him from putting his predictions on the Internet. In 2014, he gets his own documentary called the Forecaster. The film is unabashedly on Martin's side, and his conspiracy claims, including the bit about the Russian mob and the CIA plotting to steal his economic models, go largely unchallenged. I don't know if it was by design, but a lot of Martin's conspiracy theories fit really nicely in the conspiracy theories of a lot of people, especially on the Internet now. And so a documentary that says the shit about the Russian mob and the CIA is out to steal his ideas. I mean, it's. It speaks to a community of people who believe that, of course. And they believe they're special like Martin and maybe are going to come up with their own little pie theory. If you search Martin's name now, he's all over right wing podcasts and YouTube shows about trading gold. His own YouTube channel currently has 50,000 subscribers, and he posts regularly, despite all the economists who debunked his PI theory. You can tell from the YouTube comments alone just how many people believe Martin is a martyr, genius and soothsayer jailed for his beliefs. Honestly, Martin's biggest scam wasn't even the Ponzi scheme. It was that his PI theory doesn't really work. And yet to this day, he's still out there talking about how it explains the geometry of time. It's totally possible that Martin scammed himself. Or maybe he's just laughing at everyone who believes him. Which to Martin only proves he's the smartest guy in the room. Okay, you know, Sachi, we've dealt with a lot of stock people and securities fraud, blah, blah, blah. But I think the difference is that Martin, the more I think about it, I don't think he thinks he's a scammer at all. Like, I don't think there's a part of him that was thinking he was being deceptive or. I don't even know if this makes sense, but, like, intentionally deceiving. Yeah. I think it's tough when. When we have scammers that veer into conspiracy theory, which happens all the time, it's almost more heartbreaking because you can't quite pinpoint where reality stops existing for them and they're just somewhere else. And how much can you blame a delusional person for believing in their delusions that they think are true? I think the place that I hesitate to sort of side with Martin is that it's always these, like, random ass white guys who are like, I am so profoundly powerful in the world and in society that only I could figure out this, like, weird math equation about the stock market and get super rich. It's delusion in the pursuit of economic power, and it's always delusion that keeps them mostly safe until the last minute. And so it's hard to like, really wrap my arms around this. Cause it's like, well, you were still doing it for you, you know? Exactly. And I was doing it for your ego a hundred percent. It's like, okay, say there's a universe where this guy is incredibly genius and special, and everything he says about the C wanting to get him is true. So you're telling me you're this once in a lifetime brilliant theorist who can predict things and knows when things are gonna happen, and you just don't do anything about making the world a better place? You did this all to make other people and yourself richer, like him even saying that Socrates was able to predict the downfall of regimes or whatever. So, like, you're not gonna do anything with that, even though you're some kind of super genius. You know? I mean, the reality is, is that for him to interfere with the markets that he's predicting would be to cut his profit if he actually, like, cared about, like, how people were gonna do or, like, what was gonna happen if the market crashed. But he's not going to do that. No. Another thing is, like, even if you were correct, wouldn't they have just killed you? Like, you're telling me the CIA was trying to put you in prison where you could still be someone who has access to a typewriter at least, instead of just killing you off? They're known for assassinating, you know, it's not really a thing that they're going to be like, oh, should we? Should we not? No, they're going to kill your ass, bro. Also, like, if he was so right about his model, he didn't pay his taxes, and he. He or his partner, whatever, lied to the Japanese clients about what was being done with their money. If he didn't do those things, he could have just kept promoting his model forever and just been rich ripping off these Wall street types and giving this fake advice and not really even, like, having to do much. But he did lie and evade taxes, which is what got him into this whole thing in the first place, you know? Yeah. I mean, it is conspiracy theory that somehow only benefits one, and conspiracy theory that also suggests that you are too smart, too great, too brilliant to be like the rest of us idiots who have to pay taxes. He doesn't want to pay it because he thinks he's too good for it. He thinks he's too good for a $12,000 tax bill. The whole thing with the contempt of court is just, like, you know, more proof of his weird psyche where, like, he makes himself a martyr. He's not waiting for someone else to, like, turn him into a martyr, like, he's going to do it himself. It kind of sucks because the judge was correct in my opinion, of being like, no, you're in contempt of court. You're not going to admit it. You're not going to show us where this stuff is. Like, how is this trial going to move on? But it's crazy that, like, when you realize how the rules can empower the guilty party in that way. As someone who knows shit all about math, if you think you're the person who's going to invent the new math or the math that will save the world, you're wrong. Stop. Stop right there. They've already done it all. There's other people who've dedicated their lives to math who are working on it. Right? You're not the hero. You're not inventing a new math. You're not using PI in a way that no one on earth has ever used it before, bro. I mean, yeah, I guess the story is a testament to just how nebulous the stock market is, because he's right. Like, it is cyclical. There is a repetition to how it crests and falls. Like that is true. He's just devised this mechanism that, again, isn't necessarily wrong. It's just the trappings around it seem flimsy at best. Yeah, exactly. I mean, if anything, to be generous, he kind of just like, exploited the stock market and predictions markets in a newer, bombastic way that someone else is probably gonna do at some point. I'm happy to report I know about as much math right now as I did when we started this episode, which is none of you know what? I know less math now. Oh, you lost some. That's impressive. I lost math. That's how much this messed me up. All right, well, maybe, you know, as I leave and walk around today, I'll try to forget how to tip. From Audible originals. This is Martin Armstrong, the man who bet billions on pie for scamfluencers. I'm Sarah Hagke. And I'm Sachi Kol. If you have a tip for us on a story that you think we should cover, please email us@scamflancersoudible.com we used many sources in our research. A few that were particularly helpful were the Secret Cycle by Nick Palmgarden for the New Yorker. Armstrong's Visions of Business Glory Collapse and securities Fraud Indictment by Jathan Sapsford, Peter A. McKay, Mitchell Passell and Bill Spindle for the Wall Street Journal in In Fraud Case, Seven Years in Jail for Contempt by Gretchen Morgenson for the New York Times and the recording of Noel Knox, who covered the Martin Armstrong story for the Associated Press and USA Today. Katie Clark Gray wrote this episode. Additional writing by us Sashi Cole and Sarah Hagie. Alex Burns was a story editor. Our senior producers are Sarah Enny and Ginny Blume. Our associate producer is Charlotte Miller. Our managing producer is Desi Blaloff. Fact checking by Gabrielle Joliet. Sound design by James Morgan. Additional audio assistance provided by Augustine Lim. Our music supervisor is Scott Velasquez for Frisson Sync. The executive producer for Audible is Jenny Lauer Beckman. The head of Creative development at Audible is Kate Navin. The head of Audible Originals North America is Marshall Louie. The Chief Content Officer is Rachel Giazza. Copyright 2026 by Audible Originals, LLC Sound Recording Copyright 2026 by Audible Originates, LLC Legend Follow Scamflancers on the Audible app or wherever you get your podcasts. You can listen to all episodes of Scamflancers ad free by joining Audible.