Podcast Summary: The Binge Crimes: Lady Mafia | Episode 4: “Cut up into Little Pieces”

Introduction

In Episode 4 of The Binge Crimes: Lady Mafia, veteran reporter Michelle McPhee delves deep into the tumultuous rise and catastrophic fall of Sara King, also known by her many monikers such as the “Female Bernie Madoff” and “Anna Delvey of the OC.” This episode offers a riveting behind-the-scenes exploration of Sara’s descent into the dark world of high-stakes deception, hard money lending, and financial ruin in Orange County.

Sara King’s Ambitious Rise

Michelle McPhee begins by painting a picture of Sara King at the height of her ambitions. Once a lawyer, Sara transitioned into hard money lending under the banner of King Family Lending. Her goal was to emulate the success of Brian Quinn, another prominent figure in the lending industry, by providing quick loans to affluent clients who needed fast cash without the hassle of traditional banks.

“I’m not stupid, by the way. I get that this likely isn't the whole truth, but this is part of what's so puzzling to me about Sarah.” [11:29]

Sara’s business model involved offering loans with exorbitant interest rates, sometimes up to 30%, to individuals who could present substantial collateral, such as luxury cars and high-end jewelry. This high-risk, high-reward strategy initially attracted a clientele willing to pay the steep interest due to their immediate financial needs.

The Partnership with John McCabe

The turning point in Sara’s operation came with her partnership with John McCabe, a mysterious figure introduced to her by Brian Quinn. McCabe, whose background and legitimacy were immediately questionable, became an integral part of Sara’s business.

“He had this, you know, this little hat on, and he's just in his, like, board shorts and flip flops and T shirt.” [06:25]

Sara described John as a friendly and resourceful individual who owned a large marijuana farm in Hawaii. His involvement seemed to offer a solution to Sara’s mounting debts, including a $10 million loan she struggled to repay. However, McCabe’s elusive nature—he had no verifiable online presence or arrest records—raised red flags for Michelle and her team.

“John McCabe was like, oh, I have a lot of guys who want to do loans. And I started doing some just shady ass loans.” [09:39]

McCabe’s entrance into the business introduced chaos. Loans were being processed rapidly without proper documentation, resembling a "shell game" that was difficult to track and fraught with potential fraud.

Investor Interactions and Red Flags

The episode highlights Sara’s interactions with various investors, particularly George Poulos, a retired IT business owner who became entangled in Sara’s lending scheme. George’s experience underscores the disorganization and lack of transparency within King Family Lending.

“What loans? I don’t see anything on here about any money. I go, what about the one I’m on? It’s right there. And it was just chicken scratch right on, like, a little piece of paper.” [26:47]

George recounts how Sara provided him with minimal and poorly organized documentation for the loans, relying instead on verbal assurances and hastily scribbled notes. This lack of proper records was a significant indicator of the precariousness of Sara’s operations.

The Unraveling of the Scheme

As Sara’s financial situation deteriorated, the partnership with John McCabe began to falter. Sara found herself unable to manage the mounting debts and the disarray within her lending business. The pressure intensified when investors, including George, realized that their funds were unlikely to be returned.

“When I saw the lack of any records, I went, uh, oh, I’m screwed. And she kept making excuses.” [30:44]

Influenced by desperation, Sara turned to gambling in a last-ditch effort to salvage her finances. However, this gamble only exacerbated her problems, leading to further financial instability and personal turmoil.

Investor Retribution and Threats

The most harrowing part of the episode details the vengeful actions taken by Sara’s disgruntled investors. George Poulos shares a chilling account of how some investors resorted to intimidation and threats to retrieve their lost money.

“If we don’t have all of our money by tomorrow morning, you’re not going to make it till 8 o’clock and you'll be cut up into little pieces.” [33:39]

These threats manifested in Sara being constantly surveilled and ultimately physically overpowered by those she had defrauded. The episode underscores the severe consequences of financial deceit and the lengths to which victims might go to seek recompense.

Possible Ponzi Scheme

Throughout the investigation, Michelle McPhee explores the possibility that Sara King was operating a Ponzi scheme from the outset. Expert Derek Lewis corroborates this theory, noting Sara’s continuous borrowing and the escalation of interest rates as signs of an unsustainable financial model.

“Essentially she keeps borrowing. She knows she’s got to pay off other people. She’s lending money in situations that are probably more and more risky.” [28:53]

The lack of verifiable transactions and the disappearance of funds further support the notion that new investments were being used to pay off previous loans, a hallmark of Ponzi schemes.

Sara’s Denials and Final Downfall

When confronted, Sara consistently denied the fraudulent nature of her business, claiming legitimacy and insisting that all loans were genuine. However, her inability to provide concrete evidence or verifiable records ultimately undermined her credibility.

“I absolutely did do loans.” [29:29]

Despite her denials, the accumulation of evidence pointed towards deliberate deception. Her unavailability and the mysterious disappearance of her business partner, John McCabe, left investigators with more questions than answers.

Conclusion

Episode 4 of The Binge Crimes: Lady Mafia presents a compelling narrative of ambition gone awry, highlighting the intricate web of deceit spun by Sara King. Through meticulous reporting and firsthand accounts from investors like George Poulos, Michelle McPhee exposes the vulnerabilities and risks inherent in high-interest lending practices. The episode serves as a cautionary tale about the allure of quick financial gains and the devastating impact of fraudulent schemes on individuals and communities alike.

Notable Quotes

• Sahra King: “I’m losing big money and I had to sell them as fast as I could. So it was a nightmare.” [01:54]

• Sahra King: “John McCabe was like, oh, I have a lot of guys who want to do loans. And I started doing some just shady ass loans.” [09:39]

• George Poulos: “What loans? I don’t see anything on here about any money. I go, what about the one I’m on? It’s right there.” [26:47]

• George Poulos: “If we don’t have all of our money by tomorrow morning, you’re not going to make it till 8 o’clock and you'll be cut up into little pieces.” [33:39]

Final Thoughts

The Binge Crimes: Lady Mafia masterfully intertwines investigative journalism with compelling storytelling, providing listeners with an in-depth look into the complexities of financial fraud and its ensuing chaos. Michelle McPhee’s dedication to uncovering the truth behind Sara King’s scheme offers valuable insights into the mechanisms of deceit and the personal toll it takes on both perpetrator and victim.