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- [00:00]
Sachi Kol
Hey, Scamflancers fans, Sachi here. If you live for the outrageous stories and unbelievable cons that we cover, you need OneDryPlus. It's like sitting in the room with us as we unravel every twist ad free, a week ahead of everyone else, and packed with exclusive content you won't hear anywhere else. Start your free trial in the Wondry app, Apple podcasts, or Spotify. Sarah, have you ever hung out with, like, newish friends and gossiped a little too hard, and then you realized that you weren't really in the right company for the kind of gossip you just told?
- [00:36]
Sarah Hagie
You know what? That is so close to being my worst nightmare. I've been close where I've tested the waters, where I've been like, yeah, you know that girl? And then people are like, oh, yeah, I love her. And I'm like, gotcha. But usually I try and, like, dip my toes in to see what the vibe is. But, yeah, I mean, it happens to everyone. I'm sure it's happened to me, and I've just, like, erased a memory.
- [00:58]
Sachi Kol
This has never happened to me because I do not gossip, and I do not start every single Scamflancers recording session with, do you have any gossip?
- [01:05]
Sarah Hagie
Oh, my God, you actually do that. Yes, I do. And when I don't have anything to offer you, I'm like, I failed.
- [01:11]
Sachi Kol
Yeah, And I feel that you have failed. Well, I ask because today's scammer got caught doing a version of just this. Trusting the wrong people with the intricate details of his scam. God, Sarah, it's like you can't trust anyone to keep a little secret about fraud. It's an Early Morning in March 1977, and Jack Brennan is sitting by the window in a hotel room in Honolulu, Hawaii. Jack's in his early 30s, with boyish round cheeks, sandy hair, and a Southern drawl. He's about to spend the next few days at this luxe resort. But he's not on vacation. Jack is an FBI agent, and he's here working undercover. Jack and his partner, J.J. wettick, are trying to gather enough evidence to bust a scammer they've been following for months. A guy named Phil Kitzer. Phil has been running a fake bang con for almost a decade. He offers people phony loans that never come through. And right now, he's targeting a new Hawaii's lieutenant governor. But this isn't a typical FBI assignment for Jack, because this time, Jack and JJ are along for the ride. Phil thinks they're scammers, too. And he's brought them into his entourage of rowdy, hard drinking con men. Over the past few months, Phil has taken them all over the world to meet other ne' er do wells and cook up schemes. But he also has them out dancing all night while he picks up women to keep from blowing their cover. The agents have to stay up late too, drinking all the booze they can't discreetly pour out into potted plants while they're out partying. Jack and JJ have to try to memorize everything Phil says until they can sneak off to write it down and send their notes back to the FBI.
- [02:53]
Sarah Hagie
I don't really believe in being sneaky this way, but I understand it's necessary sometimes, and I feel like it'd be so much fun.
- [03:02]
Sachi Kol
It is kind of zany. Well, staying at this beautiful tropical resort has posed all kinds of new problems. Phil is taking all his meetings poolside, and the agents can't hide their recording devices when they're in bathing suits. On top of this, Phil has gotten so familiar with the guys that he tends to barge into their rooms and rifle through their stuff. It's making it extremely hard to gather evidence. But today, Jack has a plan. He uses a pair of scissors to cut a small hole in the hem of his hotel room curtains. And then he slips a tiny tape recorder inside. Jack adjusts the cloth around the recorder and probably says a silent prayer that they catch Phil saying something incriminating on tape. He feels a rush of adrenaline and fear because he and JJ are flying by the seats of their pants. These young FBI agents have had zero undercover training and they're working under their real names. JJ is single, but Jack is married with two young children and a new baby on the way. So there's a lot at risk if he gets caught. As Jack gears up for another long day of partying with Phil, he can't help but worry. They need to put this con man behind bars before Phil figures out that they're the ones conning him.
- [04:25]
Sarah Hagie
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- [05:08]
Phil Kitzer
You know how we all have that one friend we go to with all our financial questions? I'm talking the one who gives you advice like no one else can. Well, meet Experian, your bff. And by that I mean big financial friend. I'm telling you, Experian is gonna be your go to app when it comes to taking control of your finances. And this big financial friend is always there for you. Just hanging out on your phone where we all kinda are. Anyway, Experian has a bunch of legit ways to help you save. And get this, the Experian app lets you check your FICO score. Matches you with credit cards and a bunch more totally BFF kinda things to help you manage your finances. Bet your other BFFs can't do all that, huh? Anyway, it's easy to have this big financial friend by your side. Just download the Experian app and get started for free. Trust me, you'll be up to speed with this BFF in no time. Results will vary. Credit offers, approvals and reward programs Based on FICO score.8 model and subject to lender terms. Offers not available in all states. See experian.com for details.
- [06:08]
Sachi Kol
From Wondery I'm Sachi Kol. And I'm Sarah Hagie and this is Scamflancers. Come and give me your attention.
- [06:16]
Sarah Hagie
I will ever learn my lesson.
- [06:18]
Sachi Kol
10 my speakers to 11. I feel like a legend. Phil Kitzer was a world class scammer who spent more than a decade creating banks and insurance companies only to loot them for millions of dollars by selling worthless policies that offered no real coverage. By the late 70s. Phil's scam is so prolific that the FBI takes an unprecedented step to take him down. They authorized the first ever white collar undercover sting operation. Two young agents join Phil's entourage and quickly get way over their heads. With no undercover training, these two newbies will have to scramble to keep up with one of the best conmen in the biz without blowing their cover and hopefully get enough evidence to put Phil away for good. This is Phil Kitzer and the G men. Gretchen. It's 1950 in Chicago. Phil Kitzer is just a teenager, but he's already ditched school. He dropped out after 10th grade to start working for his dad's bail bonds business. He's a strong sense of hustle that he inherited from his dad Phil Sr. Who emigrated From Hungary to the US and worked his way up from bricklayer to bondsman, it's clear that Phil Jr. Is a natural born salesman. He's charming as hell and relentless about getting what he wants. For example, one day, he meets his friend's girlfriend, Helen. And even though she's dating his friend, Phil asks her out. Helen says no. She already has a boyfriend. But Phil doesn't take no for an answer. He keeps calling, and eventually she agrees to go out with him. They start going steady, and a few years later, he asks her to marry him. Helen again says no, but this is Phil we're talking about. So naturally, he keeps asking, and ultimately, she comes around.
- [08:08]
Sarah Hagie
This happens to me all the time, and it just. It sucks. And, you know, I've never. I've never given in.
- [08:13]
Sachi Kol
Yeah, men are always proposing to us. It's really frustrating. Well, by the late 1950s, Phil's family bond business is booming. A bail bond is an agreement that allows a criminal defendant to stay out of jail until they go on trial without having to pay the full bail amount set by a judge. Instead, they pay a percentage of the bail to a bondsman like the Kitzers, who guarantee that the defendant will show up in court. By this time, the Kitzers are writing more than half of the bail bonds in Chicago's federal court. One of their clients is the notorious mobster Jimmy Hoffa. And eventually, their work catches the government's attention. At one point, the Kitzers are investigated by a federal grand jury. They're suspected of giving kickbacks to cops in exchange for sending people they arrest straight to the Kitzers to write their bail bonds. And in 1959, Phil, his dad, and his brother Joe are questioned by the FBI as part of another courthouse corruption probe. Phil Sr. Is accused of giving bribes, but he brushes the allegations off as malicious rumors. Ultimately, the FBI drops the investigation. And just like that, it's back to business as usual. You know what?
- [09:22]
Sarah Hagie
Nothing happens to them. So that tells me they're gonna learn an amazing lesson from this and never do anything bad.
- [09:29]
Sachi Kol
Yes, exactly. Well, by 1960, the Kitzers are looking to diversify. Phil Jr. Has been running his own insurance business as a side hustle for a few years. Since he already has a foot in the door, his dad and his brother decide to join him, and they start a car insurance company together. But when Phil goes to the bank for a business loan, he gets a rude awakening. The bank officer wants a kickback in order to approve the line of credit. Phil is not happy, but he needs the loan. So he pays up. His early experiences in Chicago have taught him that sometimes you gotta pay to play. But Phil's no chump. So he's gonna take what he's learned and figure out how to give himself the better side of every deal. From now on, Phil, his dad, and his brother named their insurance company Adequate Mutual.
- [10:20]
Sarah Hagie
That would inspire belief in a company. Adequate. Thank you.
- [10:24]
Sachi Kol
Truth in advertising. While his dad is focused on the bail bonds, Phil runs the family's insurance business. And he quickly turns it into an empire. Over the next few years, the Kitzers take over and start more than a dozen insurance companies that in total employ more than 25,000 brokers in Illinois, Minnesota, and London. Adequate Mutual pulls in millions of dollars in premiums. While Phil has been growing the family's insurance business, he's also become a responsible family man. By now, he and Helen have a rapidly growing family. He takes care of the kids and does chores whenever Helen suffers from migraines, which is fairly often. But this changes around 1963. The business is doing gangbusters, and Phil has more cash than he knows what to do with. He's also traveling a lot and only home about once a month. This does not go over well with Helen, who has just given birth to their fourth child. Phil assures Helen that he's taking care of business and that she doesn't have to worry. But he doesn't tell her where the money's really coming from, because Phil's insurance empire is built on lies and he's using his companies as a personal atm.
- [11:30]
Sarah Hagie
I mean, insurance already a scam we have to buy into, so why not just add another layer, right?
- [11:37]
Sachi Kol
Well, Phil learned early on that the system is broken, and if you don't take advantage of it, you're a sucker. So he started running a scam that is so complicated, it's almost undetectable. First, he starts a real estate holding company to invest profits from his insurance companies. But instead of filling the portfolio with real investment properties, he buys pieces of property nobody wants for next to nothing. Then he finds an assessor who will claim the property is worth much more in exchange for cold, hard cash. Once that overvalued asset is part of his real estate company, Phil is able to pull out an equivalent amount from the company in cash. It looks fine on paper because he's withdrawing cash against an existing asset, but because the value of the asset is fake, Phil is really robbing his own company blind.
- [12:26]
Sarah Hagie
Clearly, this is working right now, but it will catch up to him, and he just doesn't Care at all.
- [12:32]
Sachi Kol
Yes, exactly. This will not serve him in the long term, but that's not the point. He's not trying to build a sustainable business. It's more like a pyramid scheme where each new asset props up the ones Phil has already looted. He's just looking for a quick buck now, and he doesn't care what happens later. Phil is also looting from his other companies. By 1965, Phil, his dad, and his brother have siphoned nearly $4 million from their string of fake insurance companies, the equivalent of over $40 million today. That money should stay in the company coffers to pay out claims, but since it's gone when a customer, say, gets in a car accident and needs to replace their vehicle, they get almost nothing in exchange for all the premiums they've paid. Phil's first insurance company, Adequate Mutual, is insolvent within a year of opening, and the others meet similar fates. Meanwhile, Phil is living it up, spending his stolen millions on lake houses, speedboats, gambling, trips to Vegas, and travel to warm tropical locales. So while Helen's at home with the kids in a pounding migraine, Phil is hanging out with beautiful women. Even on mother's day.
- [13:42]
Sarah Hagie
It seems pretty crazy that he's doing all that, considering he basically begged Helen to marry him. That's usually how it goes.
- [13:50]
Sachi Kol
Well, Phil meets many of these young women in nightclubs and offers them plane tickets to keep the party going in Miami, San Francisco, Puerto Rico, and Acapulco. Some guys can't pull off this playboy lifestyle without seeming creepy, But Phil is charismatic and fun to be around. He puts a lot of this travel on the company tab. At one point, he runs up a $9,000 bill while staying at the famous Fontainebleau hotel in Miami, which is more than 90 grand in today's money. Phil is loving his new playboy lifestyle, and the thought of going back to Helen, her migraines, and their four kids becomes less and less appealing. So in 1966, he walks out on his family for good. But while Phil is partying it up and conning his customers, federal prosecutors are starting to catch on to the kitscher's growing scampire. Soon, Phil will need to leverage one of the only real assets he actually his persuasive personality. It's a chilly spring day in April 1967 in Bismarck, North Dakota. The usually sleepy courthouse is swarming with reporters, and everyone in town is talking about the Kitzer case. Government prosecutors are charging Phil and a dozen other people with conspiracy to defraud thousands of auto insurance policyholders they claim Phil and his dad siphoned $3 million from their customers. The trial is centered on victims in Minnesota, where 6 of their insurance companies are based. But the Kitzer family successfully argued that they wouldn't be able to get a fair trial there. So the proceedings have been moved to Bismarck. And it is a scene. Several women take the stand to testify that Phil took them on fancy free trips. And don't worry, the reporters covering the trial make sure to emphasize how young and attractive the women are. The prosecution alleges that they were all partying on the company dime. And they say that Phil is a bad person who abused the, quote, great concept of social justice that is insurance.
- [15:51]
Sarah Hagie
I guess, like, in theory, these people think that insurance is a concept of social justice. But he's taking the scam of insurance one step further because there are things he's not covering at all. And he's using these people's money to go to Miami. So they also only realize they've been scammed once something bad has already happened to them because they try and use insurance, realized they weren't covered, and by then, their money's gone. Right?
- [16:17]
Sachi Kol
Yeah, Phil is the worst of the worst. But the government has to explain Phil's scam to the jury. And it's complicated and confusing. The jury, which the New York Times describes as, quote, six North Dakota housewives, three nurses, and three laboring men struggle to keep up with the intentionally byzantine scheme. But Phil is a salesman with a gift for storytelling. So when he takes the stand, he's a breath of fresh air. He explains his side of the story as a narrative, and the jury is able to follow along. He grandstands with lengthy explanations, and at one point, he claims that, quote, the American way of life is to borrow money and start a business. In the end, the jury comes to a unanimous verdict. Phil, his father, and his brother are all not guilty. When Phil hears the news, he bursts into tears. Then he pulls himself together and walks out of the courtroom wearing a winner's smile.
- [17:14]
Sarah Hagie
Well, I do feel like this is the kind of thing that literally will just push him to keep going and just going even harder.
- [17:23]
Sachi Kol
Yes, that's exactly right. The only thing he's learned is that when people hear his version of the truth, they believe it. Phil has one other takeaway from his brush with the law. The more complicated the scam, the more likely it is that he'll get away with it. With this in mind, he ups the ante on his previous insurance scams. This time, he's not Just running fake companies. He's running fake banks. Over the next decade, Phil jets around the world setting up a series of fake financial institutions, several headquartered in the Caribbean. He lures in customers by promising investors tax free returns offshore. He masters the art of forging documents. And he finds clever loopholes, like naming a company Corp instead of corporation so he doesn't have to legally incorporate it.
- [18:10]
Sarah Hagie
My favorite thing is when a scammer finds a loophole that is so cartoonishly stupid. Corp instead of corporation. That's lying. Final hut.
- [18:19]
Sachi Kol
I know. It's like a Looney Tunes fake doorway drawn on a wall, basically. Phil's fake banks often have names that sound very similar to legitimate banks, which further confuses customers. For example, he creates the First National Citibank and Trust of Grenada, a play on the very real First National City bank of New York. And Phil makes sure that he almost never meets his victims. He builds a layer in between a person called a broker. The brokers use Phil's fake documents to con marks into giving them money in exchange for access to credit. And then they give Phil a cut of the profits. Without Phil's fake banks, the brokers can't run their con. It's a win win situation for everyone except the customers. Though it's obviously risky, Phil stays out of legal trouble by moving around a lot, shutting down fake banks that attract attention and opening up new ones. Apparently, all it takes to open a bank is a little bit of paperwork. By the mid-70s, Phil has a team of more than 50 brokers working across four continents. He's the go to guy for nefarious types who want to fleece vulnerable customers looking for credit. And as Phil refines his system for scamming and gets bigger and bigger partners in crime, their marks get a lot bigger too. In June 1976, Fred, PRO, one of Phil's proteges, calls his boss with some big news. Fred is in his early 50s. He's tall and stocky and wears a salt and pepper toupee. He's eager to talk to Phil, but the connection is spotty because Fred's calling from an air to ground phone in Elvis Presley's private jet. Fred is pumped. He tells Phil that he just closed a big deal on this plane, which Elvis no longer needs. Elvis might be the King of rock and Roll, but he's just become the most famous pawn in their scheme. The details are a little complicated, but what you need to know is that Fred arranged for Elvis dad Vernon Presley to pony up more than $300,000 to upgrade the Plane so that it can handle commercial charter flights. Fred would get a third party to buy the plane and pay off its mortgage. This new owner will then lease the plane back to Elvis dad, Vernon, who will lease it back to Fred. If this sounds insane to you, you're not alone. It's a really weird deal. But the bottom line is that it'll earn Elvis $1,000 a month in easy profits. And Fred assures Vernon that he can buy the plane back for a dollar after the lease is up if he wants.
- [20:48]
Sarah Hagie
It is such a crazy deal. And also, whenever our scammers get close to, like, a truly famous person, it always blows my mind how small the world is.
- [21:00]
Sachi Kol
There's just not that many people. Yeah, well, to win Vernon's trust and make this convoluted deal, Fred draws on his reputation as a legit businessman. Before getting into the con game, he was a vice president at a major manufacturer of railroad cars. But then he was scammed out of $160,000. The loss left him reeling, and he was willing to do anything to feel good about himself again. So naturally, he turned to a life of crime. Fred has another explanation for this. Walk on the wild side, Sarah. He claims that he received a life changing blowjob on the Eiffel. Eiffel Tower that made it impossible to imagine going back to an honest living. Who amongst us?
- [21:41]
Sarah Hagie
That is disgusting. Honestly, it's disgusting. And it's probably a lie.
- [21:46]
Sachi Kol
Yeah, no one's that good. Well, Phil is helping Fred pull off the scam behind the scenes. He creates fake documents to assure Vernon that Fred's got enough money in the bank to lease the plane at the agreed price, which he does not. Of course. Fred's checks for the lease payments immediately bounce. He pockets the money Vernon gave him to make upgrades and divides it between himself, Phil, and the other conmen who are in on the deal. Of course, he never does any work on the plane, but he does fly it around to look fancy while making other scammy deals. About eight months later, Vernon finally speaks with the FBI about what happened. As Fred, Phil and their cronies keep pulling audacious scams, it's only a matter of time before more of their victims start talking. Chime understands that every dollar counts, especially in this economy.
- [22:40]
Sarah Hagie
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- [22:51]
Sachi Kol
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- [23:02]
Sarah Hagie
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- [23:09]
Sachi Kol
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- [23:47]
Sarah Hagie
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- [24:01]
Sachi Kol
Again and again by working directly with top artisans and cutting out the middleman. Everything at Quint's is half the cost of similar brands. Sarah, you know that a bunch of my wardrobe is comprised of Quint stuff, but it's actually all stuff that I bought a couple of years ago and it still really holds up. I still look very cute, which, as you know, is top priority.
- [24:21]
Sarah Hagie
You know what? I will give you that. You do always look cute. Well, give your summer closet an upgrade with quints. Go to quints.com scampod for free shipping on your order and 365 day returns. That's Q-U-I-N-C-E.com ScanPod to get free shipping and 365 day returns. Quince.com Scampod I feel like a legend.
- [24:52]
Sachi Kol
It's October 1976, and Jack Brennan is at his desk at the FBI bureau in Gary, Indiana, when the phone rings. It's one of his informants, a cop turned conman turned pizza shop owner named Norman. After Jack caught him writing illegal bail bonds last year, Norman made a deal with the FBI. Lately, Norman's been telling Jack about a shadowy network of fraudsters who've been using fake banks to cheat people and even governments out of millions of dollars. Today, Norman has a hot new tip for Jack. He tells him that if he really wants to take down this racket, he needs to look into their leader, a man named Phil Kitzer.
- [25:29]
Sarah Hagie
Well, well, well, it's crazy because also, it's like he is truly leader status.
- [25:36]
Sachi Kol
Yeah, well, Jack's ears perk up right away. His work focuses on organized crime, but he's interested in financial fraud too. He worked as a commodities trader before joining the FBI. So unlike all the people who are confused scams, Jack can actually wrap his head around them and why they're so dangerous to consumers. The very next day, Jack opens the Wall Street Journal to see a story about a fraudulent bank in the British West Indies. And Phil Kitzer is named as one of the bank's officers. Jack realizes the FBI has actually tried to indict Phil before. But with no informants to prove Phil is purposefully defrauding people, the case went nowhere. Jack's excited to finally bring this guy down. And with Norman on board, he thinks he has a pretty good shot. But he'll have to convince his bosses that going after Phil is worth the resources. At this time, the FBI isn't doing very much about white collar crime, and the local bureau chief is more concerned with the high number of murders in town. But there's someone in the office who Jack thinks would be down to help with the case. A fellow agent named J.J. wettick. At 26, J.J. is a few years younger than Jack. He's tall and skinny with dark brown hair and a thick 70s mustache that could rival Tom Selleck's. He's a fast talking New Yorker who started with the FBI three years ago. While Jack is trying to balance work and a family, JJ is an unmarried workaholic who grinds out 16 hour days. He's got a reputation for being ballsy and hot headed. He loves the adrenaline rush of chasing thieves and bankruptcy robbers. And once he even pulled his gun on two people trying to mug him.
- [27:13]
Sarah Hagie
You know what? People like this in my mind either end up in law enforcement or being like daredevils. Yeah, like he would be walking on a tightrope between buildings. Or doing this.
- [27:24]
Sachi Kol
He's in the right place. Maybe. Well, Jack corners JJ by the office coffee machine and pitches the case to him. At first, JJ turns down Jack's offer. Financial fraud sounds slow and boring, but he respects Jack, so they keep Talking. And it doesn't take long for JJ to realize that going after Phil could be a chance to do something he's always dreamed going undercover. At the time, the FBI's undercover work and training is limited, so it could be a while before JJ gets his turn. He decides that this case might be an opportunity to jump to the front of the line. So he comes back to Jack and tells him he. Norman helps them arrange a meeting between Phil and an undercover specialist at the FBI who pretends to be a failed restaurateur looking for a loan. And Norman attends too, pretending to be in on the deal while wearing a wire. It goes off without a hitch. Phil accepts cash in exchange for a fake letter of credit. And it's all caught on Norman's wire. JJ is psyched about the big fish they've got on the line, and he's ready for more. It's a frigid day in February 1977 in suburban Minneapolis, and JJ is wired up with a clunky audio recorder as he walks towards the Thunderbird motel. He's sweating through his three piece suit because he's about to meet Phil for the very first time. After desperately angling for his first undercover assignment, it's finally here, and the role is a doozy. He and Jack are posing as young con men in training who want Phil to show them the role. Hopes JJ had to get clearance from an entire chain of FBI higher ups to even go to this meeting. So he's eager to prove himself. But he's anxious he'll have to pretend that they have connections to the insurance industry as their way in with Phil. But unlike Jack, he doesn't know anything about finance. JJ and Jack have had basically no undercover training. They've been approved to do this meeting as a one time undercover thing. But since they haven't been trained by the FBI, the bureau won't create fake names for them. So they're using their real names and their very own credit cards.
- [29:33]
Sarah Hagie
It's so risky. But also, it's 1977. It's not like you're gonna go off and be googling these guys. Also, this does sound like a movie.
- [29:42]
Sachi Kol
It's so lousy.
- [29:43]
Sarah Hagie
This is like 21 jump street levels of undercover hijinks.
- [29:49]
Sachi Kol
Looney Tunes. While JJ spots Phil waiting for them at the hotel bar, which is a Native American themed spot called Powwow Lounge. Sarah by now, Phil is in his mid-40s, and his face has creased from years of hard partying. He's wearing a suit and tie and Sipping a highball of scotch. And he's puffing on a cigarette, which he lit with a gold plated lighter. JJ Puts on his game face and tries his best to look like a scammer. But when Phil sees JJ and Jack, the first thing he tells them is that they look like a couple of feds.
- [30:22]
Sarah Hagie
Oh, my God, again, this is straight from a movie. And then, you know, one of them's like, yeah, we get that all the time.
- [30:30]
Sachi Kol
Well, for a moment, JJ Holds his breath, wondering if they're about to be exposed. But then Phil starts laughing. He says that if they were really feds, it wouldn't have been so hard to set up this meeting. Phil buys their cover story that they want to buy stolen bonds for Jack's grandpa's insurance agency. He even invites them to come along on one of his business trips to Cleveland the very next day. Phil thinks he's helping a couple of upstart criminals learn the ropes. But this masterclass in con artistry will be the start of his undoing. It's a crisp evening in New York, a few months after JJ And Jack first met Phil. The three of them are sitting in a restaurant surrounded by women Phil invited. It's a fancy place, and even though Phil's picking up the tab, the women keep gawking at the prices and struggling with what to order. Phil's getting annoyed, so he asks the waiter to bring them one of everything on the menu. JJ tries to keep a straight face, but he's embarrassed by Phil's big show of opulence. When the food arrives, there's nowhere to put all the plates. Everyone in the place is staring at them, but Phil doesn't care. When the desserts come out, Phil tells the waiter he forgot the spumoni. Just when JJ Feels the spectacle can't get any worse, Phil spots a couple in the restaurant, giving them the stink eye. And then Phil tells the woman that J.J. thinks she's ugly.
- [31:55]
Sarah Hagie
I mean, that is crazy. But it also, in a way, feels like a test to see maybe how uncomfortable they're going to be around him. Like he thinks they look like feds, and now he's putting them through the wringer, you know?
- [32:09]
Sachi Kol
Yeah, you could be right. Or he could just be an asshole. Or both. JJ Wants to sink into his chair, but he can't break cover. He knows Phil can be cruel and capricious, but since their first business trip to Cleveland, Phil seems to have taken a liking to him and Jack. He calls them the Junior G men. Slang for a government man. And makes fun of their clean cut appearances. Phil probably likes that about them. If they really were conmen, their spotless records and boy scout good looks could be useful for pulling off scams. And he's enjoying showing these promising young con men how it's done. The two men spend the next few months traveling around the world with Phil on a series of business trips that takes them as far away as the Bahamas, Frankfurt, Hong Kong, and Tokyo. It's a blur of boozy nights as Phil and his gang fraudsters court new marks and beautiful women in each new city. They make time to party at Studio 54 and run up crazy hotel bar tabs around the world. JJ and Jack document everything they can about Phil's scams, Gathering the evidence they need to put him away. But Phil doesn't make it easy, so they have to get creative. Like the time Jack chopped up the hotel room curtain in Hawaii to hide a secret recording device. JJ and Jack keep having to come up with excuses to peel off from the group so they can talk to their FBI colleagues and report back on what they found. At one point, Jack sneaks away by pretending to have a nasty case of dysentery. Other times, they pretend to pick up women at bars and go home with them, but the women are actually fellow FBI agents.
- [33:44]
Sarah Hagie
This sounds insane to experience, and it's mind blowing that they are engaging in these activities for the sake of a bigger get. And it kind of exemplifies all the ways something like this could go wrong as far as abuse on the FBI's end. You know what I mean? It's like there's still people engaging in these crazy activities, even if they are cops. It's just so weird seeing it laid out this way.
- [34:08]
Sachi Kol
Yeah, the line between doing crime as part of your cover and just doing crime could get confusing. And it also seems like they're having a hard time parsing how they feel about Phil personally. Like, while they're collecting evidence on Phil, they're also forming a bond with him. They buy him Tums for his chronic stomach problems. Phil even lends JJ some of his clothes and buys Jack his own gold plated lighter. But the Asians try to never lose sight of who their travel buddy really a scammer who's hurting people. While JJ and Jack are on the ground with Phil, their colleagues in the FBI are busy setting up wiretaps on members of Phil's entourage and collecting other evidence. Finally, after spending 23 straight days traveling the world with Phil, Jack and JJ say goodbye to him. Phil is off to his farmhouse in Minnesota to dry out, and the agents return to brief their bosses. After laying out all of the leads Jack and JJ have identified through their work, the FBI decides that they've got what they need to wind the investigation down and make arrests. JJ and Jack are finally free in September 1977. Jack calls Phil, who says the FBI just showed up at his door with a search warrant. Jack lies and says that he and JJ were searched. Phil reassures Jack and JJ that everything will be okay, but he also warns that they might be called before a grand jury to testify. Phil's not thrilled, but he doesn't seem too worried. He tells JJ the FBI doesn't care about white collar cases. They're too complicated and confusing to win. So now would actually be a great time to pull off even more scams. JJ is floored by Phil's logic. According to Phil, it would be a logistical nightmare to add new charges on top of an existing indictment, so they may as well go nuts. He seems to be trying to insulate JJ and Jack from the impact of the investigation, while also making sure they don't give him up. But Phil's efforts are coming too, too late, because he's about to get hit with a shocking truth about his two favorite proteges. It's a balmy day in October 1977, and Phil is in the middle of trying to con a bank in Panama when he gets some bad news. The FBI has indicted him on fraud charges. He's not surprised, and he gets on the plane without incident. But when Phil lands in Miami, he is shocked by one thing. The FBI agent waiting for him at the airport is Phil Hanlon. Hanlon is a senior FBI agent from la, and even Phil's gang never wanted to mess with him. But now he's putting Phil in handcuffs. And Phil knows that if Hanlon is here, this case is a bigger deal than he thought. Hanlon tells Phil that he's being charged for his role in the Elvis Plain deal and another fraud case and that there will be more indictments down the road. Phil asks to call his lawyer. He also makes sure to tell Hanlon that JJ and Jack had nothing to do with this. Maybe these two agents are surrogates for the sons Phil abandoned and is now estranged from. Maybe he wants to pass his scamming skills on to the next generation, just like his father did for him. But whatever the reason, Phil wants to protect J.J. and Jack.
- [37:21]
Sarah Hagie
This was like, something in my mind that was kind of bound to happen. Like, despite them being cops, they've spent so much time together that how could they not be forming some type of bond?
- [37:32]
Sachi Kol
Yeah, they're buddies. When Jack and JJ show up to visit Phil in FBI custody, he's confused at first. Phil thinks they've been picked up, too, and he warns them not to talk to the FBI. Finally, JJ rips off the band aid. He flashes his badge and and explains that they're here because they are FBI agents and they've been gathering evidence on him this entire time. Phil demands to see their badges again. Up close, he feels queasy and looks so rough that Jack offers him a tums. Finally, after a long silence, Phil starts to smile. He probably feels a begrudging sense of respect for these agents. He has to hand it to these guys. They ran a really good conversation. Maybe in a weird way, he taught them well after all.
- [38:22]
Sarah Hagie
I know it's really common now to think about undercover assignments and that people go deep undercover, but considering this is the first ever for white collar crime and how deep it went and how many layers there were, it is so crazy to me that nothing went wrong and that Phil didn't figure it out at all. Which, I mean, I guess it does make sense. Cause he doesn't know that this. This concept exists. But it is just crazy to me that it works at all.
- [38:49]
Sachi Kol
I know. And meanwhile, Phil was convinced he could wriggle out of legal trouble yet again. But now the government has so much evidence on him. Plus, he's broke and isolated. His former entourage of promoters are all furious that he brought a pair of feds into their group. And now, thanks to him, they're all in hot water, too. JJ and Jack tell Phil that they want to make a deal, but they've been lying to him for the last nine months. Phil has to decide if he can trust these guys or if he'd rather face them in court.
- [39:27]
Phil Kitzer
You know that person in your life who just can't stand mayo? Call them traumatized. Call them close minded. We get it. They're stuck in their ways. But here's the thing. They just haven't tried Hellman's flavored mayo. We're talking bold flavors that will flip even the biggest skeptics. Spicy mayo that adds the perfect kick to your burger. Garlic aioli that transforms ordinary fries into something extraordinary. Chipotle mayo that turns your basic wrap into a smoky sensation. So to all the mayo haters out there, yes, we're looking at you. It's time to eat your words. Because with mayo this flavorful, any hater is just a Mayo lover waiting to be convinced. Hellman's flavored mayo. Get ready to eat your words. Why are there ridges on Reese's peanut butter cups? Probably so they never slip from her hands. Could you imagine? I'd lose it. Luckily, Reese has thought about that. Wonder what else they think about? Probably chocolate and peanut butter.
- [40:30]
Sarah Hagie
I feel like a legend.
- [40:35]
Sachi Kol
It's March 1978, and Phil is standing before a federal jury in Louisville, Kentucky. He has a lot to say, and he starts by telling them, quote, I don't know where I would be today were it not for JJ Wettick and Jack Brennan, but I do know I sure would not be in this damned courtroom. To save his own skin, Phil makes a deal to cooperate with the FBI and rat on his old friend. Friends. The experience is a rude awakening. He flies around the country to testify in all the different trials. But instead of staying in hotels, he's constantly moved between local jails. And unlike his usual lux treatment, on business trips, the guards sometimes deny him his medication and even beat him. JJ And Jack try to intervene and take care of him, but the witness protection program at this time is pretty bare bones. There's not much they can do. While Phil receives harsh treatment in custody, he becomes something of a media darling. He doesn't speak to the press, but tons of newspapers cover his court appearances. They marvel at his skills as a conman, nicknaming him the king of scam.
- [41:37]
Sarah Hagie
We've had a lot of scammers. Has anyone been nicknamed the king of scam yet? I don't think so.
- [41:46]
Sachi Kol
This might be our first. Well, Phil is ultimately sentenced to 10 years in prison, but he only serves two in exchange for cooperation operating with the FBI. He won't be able to go back to the crazy life he had before. But he'll turn being a rat into a more successful career than any of his previous scams. It's December 1985, and Phil has been out of jail for five years. He's sitting with JJ in the dining area at a tiny municipal airport in Mobile, Alabama. They're joined by two guys Phil knows from prison who are looking to start up a major drug dealing operation. They want Phil's help and underworld connections to get it up and running. JJ Is wired up again, pretending to be a big time gambler with access to chemicals for cooking meth. But this time, he and Phil are partners.
- [42:37]
Sarah Hagie
Oh, really?
- [42:38]
Sachi Kol
Yes, Sarah, it's catch me if you can.
- [42:41]
Sarah Hagie
I feel like he could also be going undercover because he knows how it works.
- [42:44]
Sachi Kol
He really does know how it works. Phil understands the assignment. While JJ's tape recorder rolls, he coaxes the two men into admitt criminal intent. And minutes later, a massive team of armed agents show up to arrest them. Phil's not doing this as a favor. It's his job. Now. The government is paying him $36,000 a year, a little over 100,000 in today's money, to work with Jack as an informant. He reels in conmen and corrupt politicians, and Jack and the FBI take them down. This time, he's more than happy to share what he's learned in all those years that he ran con men. He even serves as an expert witness in fraud cases and gets paid to give lectures to FBI agents and the IRS about how his scams worked.
- [43:28]
Sarah Hagie
While, yes, I understand this is a very smart thing for him to do, it must be so crazy, him being, like, a former criminal now being, like, truly a rat.
- [43:41]
Sachi Kol
He leaned in well. After they took Phil down, Both Jack and JJ went on to have accomplished careers with the FBI. By 2004, they'd both retired. Their crime fighting careers outlived Phil, who died in 2001. After spending a lifetime bending the rules as the king of scammers, Phil used his expertise to go after anyone who might come for his crown by putting people like himself behind bars. Sarah, what did you learn? What I learned is that you can have a second career in life if you just become a rat.
- [44:17]
Sarah Hagie
I know it opens up this whole can of worms of also, like, the kind of people who are allowed to do that, you know, but, yeah, it's pretty insane to have someone ask, what's your job? And then you'd be like, oh, I'm an FBI educator because I once was the target of a major investigation. So now I'm using that expertise as my job.
- [44:39]
Sachi Kol
Well, it's so interesting too. Cause it's like his scam worked because it was so complicated, but he understood it. And so, of course, why wouldn't you hire someone who created this, like, insurance snare that so few people could understand? Like, the only reason he got busted is cause they just, like, gave him friends. His downfall was that he wanted friends too much. Yeah.
- [45:00]
Sarah Hagie
I mean, also, it's like, it probably is pretty hard finding friends when you're a criminal mastermind, you know? Like, do they just want to be around you for your money? Do they actually like you? It's probably very similar to being, like, a celebrity, you know?
- [45:14]
Sachi Kol
Sarah, do you think you would make a good undercover agent?
- [45:18]
Sarah Hagie
You know, sometimes I feel like I'd be a good undercover agent because when I'm around people that, like, are crazy. I'm very, very good at just, like, letting them speak at me without trying to add too much. Like, to be honest, I do like being around a certain type of chatterbox because I could just like, take the backseat and have them keep talking. But also, no one would ever assume I'm like, a mastermind of manipulation and deceit. I'm kind of too clumsy. I don't know.
- [45:48]
Sachi Kol
I think what this taught is that if it looks like a fed and sounds like a fed and smells like a fed, might be a fed.
- [45:53]
Sarah Hagie
You know, I do agree. And I also, it would take so much to think, like, I am important enough for people to go this deep undercover for me.
- [46:03]
Sachi Kol
Yeah, the thing about Phil too, is, like, he got a lot of clemency because they liked him. They liked him, so they cracked him a deal. So he didn't spend that much time in jail. They wanted to take care of him while they're, like, moving him around at all these weird prisons while he. He's testifying, you know, they start working with him. Like, being a good hang can help you get away with a lot.
- [46:20]
Sarah Hagie
It can. It really, truly can. That is why there are personality hires. You know what I mean?
- [46:25]
Sachi Kol
There's two of them right here. Yep. Loving Scamflancers get exclusive episodes and early access to new ones. All ad free on Wondry. Join now in the Wondry app, Apple podcasts, or Spotify. Before you go, help us out by taking a quick survey@wondry.com survey. This is Phil Kitzer and the G Men. I'm Sachi Kol.
- [46:55]
Sarah Hagie
And I'm Sarah Hagie. If you have a tip for us on a story that you think we should cover, please email us@scamfluencersunderee.com we use many sources in our research. A few that were particularly helpful were the book Chasing Phil by David Howard, an article from the 1960s, 70s and 80s in the Charlotte observer, the Honolulu Star Advertiser, the Los Angeles Times, the Bismarck Tribune, the Morning Pioneer, and other newspapers.
- [47:20]
Sachi Kol
Suzy Armitage wrote this episode. Additional writing by us, Sachi Cole and Sarah Hagie. Olivia Briley is our story editor. Fact checking by Meredith Clark. Sound design by James Morgan. Additional audio assistance provided by Augustine Lim. Our music supervisor is Scott Velasquez for Freeze on Sync. Our managing producer is Desi Blalock. Our senior managing producer is Callum Plews, Janine Cornello and Stephanie Jens, our development producers. Our associate producer is Charlotte Miller. Our producer is Julie McGruder. Our senior producers are Sarah Enni and Ginny Blume. Our executive producers are Jenny Lauer, Beckman, Marshall Louie and Erin o'. Flaherty. For wondery movie night, date night or solo marathon, IMDb is your ultimate entertainment companion. Discover new favorites, rate what you've watched and never miss an episode with the free IMDb app.
- [48:18]
Phil Kitzer
Curate your watch list with a tap.
- [48:20]
Sachi Kol
Get personalized notifications for your favorite shows.
- [48:23]
Phil Kitzer
And find your next must watch movie or series.
- [48:26]
Sachi Kol
From blockbusters to hidden gems gems, we've got you covered. Download the app now, register for free.
- [48:32]
Phil Kitzer
And find your next favorite.