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Michelle McPhee
Listen to all episodes of Lady Mafia ad free right now by subscribing to the binge, visit the binge channel on Apple Podcasts and hit subscribe at the top of the page or visit getthebinge.com to get access. Wherever you listen the binge feed your true crime obsession.
Ryan Reynolds
The Bench.
Michelle McPhee
Remember what I said at the beginning of this story? Sara King seemed to be speeding towards a collision. She's bobbing and weaving in and out of traffic, searching for daylight. Well, at this point, the marijuana empire was stalled, but Sahra's mortgage on those two industrial buildings wasn't going anywhere.
Sahra King
I losing big money and I had to sell them as fast as I could. So it was a nightmare. That's really when nightmare number two happened and I met an even bigger crook in the whole world.
Michelle McPhee
It feels like we need one of those walls with photos, pins and string on it. You know, the ones in a detective TV show, a murder board. Except instead of a map of bodies and bloody crime scenes, we're going to track money. How it moves from a contract on a yacht to cash in a Chanel pocketbook to another contract in a glove box in a Ferrari, it seemed like loans were happening so fast and loose, it was hard to keep track of who owed what to whom. It was like trying to play a shell game in the bottom of the ocean. And on the bottom of the ocean there are what else? A lot of hungry bottom feeders.
Sahra King
The LA Beverly Hills loan shark guy, like big time. He isolates you from everyone that you know, and just dep. He kind of got me on board to do whatever he wanted and as soon as I ran out of money, he's gone. He's kind of a scary guy. He's not. He's no joke.
Michelle McPhee
Sarah was living the dream. She told me that she had wanted being the boss lady in charge, Lady Mafia. But also looked to me like that territory came with a lot of riffraff, pretenders, felons and hucksters. Now that she was a hard money lender, desperate people would come to her for help. She'd negotiate hard. They'd have to kiss the fucking ring. She'd be a kingmaker. She'd be rich. But was she ready for it? From Sony Music Entertainment, this is Lady Mafia. It's a story about going from lawyer to lawless, living high and blowing millions. I'm Michelle McPhee. This is episode four, cut up into little pieces.
Ryan Reynolds
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Sahra King
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Michelle McPhee
Here'S what I know. At this point, Sara's life as Lady Mafia is off to a rocky start. To pin up some of that red string here, Sarah is in trouble because she couldn't repay the money she borrowed for the marijuana buildings. She secured an additional loan from a friend that she also couldn't pay back. She thinks the way to dig herself out of this hole is to become a hard money lender. She'd seen Brian Quinn make money giving loans to cash poor rich guys. If she charged high interest, she might be able to generate some money fast. But if King family lending is ever going to make bank, she has to sell those marijuana buildings and get out from under her own debt. That's when Sara told me a new man entered into this mess with a solution.
Sahra King
I meet this guy named John McCabe.
Michelle McPhee
One more dude can solve all her problems, right?
Sahra King
The guy is Mr. Hawaii. I walked on his boat with Brian Quinn. It was Brian Quinn who introduced me to him. Go figure.
Michelle McPhee
Brian Quinn introduces John as someone who might be interested in buying Sara's buildings. They drive down to a dock in Brian's white Rolls Royce. Sarah's wearing white jeans and a T shirt, you know, all very laid back, except for Brian, who was wearing a Gucci shirt with his hair slicked back. But that's the uniform of the junior mafia, so you can't blame him. Meanwhile, John McCabe is dressed like he's about to go paddleboarding.
Sahra King
He had this, you know, this little hat on, and he's just in his, like, board shorts and flip flops and T shirt.
Michelle McPhee
In my mind, John McCabe looks like the dude from the cult classic the Big Lebowski, mid-50s. He's a tall, big guy and sometimes has a beard. Always lumbering around in shorts and slip on shoes.
Sahra King
And he's, you know, really nice. Him and his assistant, really nice people. And they said, come down into this, like, deck area.
Michelle McPhee
At first, John and his assistant give Sarah a business presentation. Sara brings up the buildings that she needed to sell, and it turns out John is also in the marijuana biz.
Sahra King
John McCabe says he owns this huge farm in Hawaii of marijuana, and he wants to buy the buildings and put it together with his, you know, company in Hawaii and build something big.
Michelle McPhee
Let me tell you, I have tried everything to find this guy, John McCabe. His name comes up in this story over and over again. You're probably sensing a pattern. A lot of the people around Sahra have made themselves scarce in recent years. Sahra said he once told her he was a pilot for Hawaiian Airlines. And I found a guy on LinkedIn who listed his job as a corporate pilot and reached out. Nothing. My producers ran a LexisNexis search, and I called all his numbers. Nothing. Again, he has no social media presence. Couldn't find any arrest records.
Sahra King
He had a boat. I met him on a boat. Okay? So he said, it's his boat. I'm thinking, okay, you got a boat, you got money? Like, okay.
Michelle McPhee
John seems to see an opportunity in Sarah, someone he can use.
Sahra King
He got very excited when he learned I had a lending license.
Michelle McPhee
As she's telling me about this McCabe guy, I'm thinking the Sarah I know likes to be the one calling the shots. She wants to believe she's in charge, but to me, she sounds like she's out of her league, like she's the prey not the predator.
Sahra King
And he said, I found your buyers. You just don't know it. And at the time, I was so desperate. I mean, I literally was at the last stage of. I mean, I almost lost absolutely everything that I believed him.
Michelle McPhee
And soon enough, Sara said she and John started working together.
Sahra King
And when the buildings were not selling, John McCabe said, I have this idea in Hawaii. Let's partner your buildings with my project and we'll go and sell it. So we started doing that.
Michelle McPhee
Like Brian Quinn before him, John is good at making connections with the guys Sarah's trying to get in with.
Sahra King
He's very good at meeting people. He met all sorts of people in Orange county. And he went from, oh, you don't want to invest in cannabis. Well, we have a lending company. Well, we, you know, it's.
Michelle McPhee
Where do you want to put it in short order. Sahra said John's acting like King family lending is his too. Trying to woo potential investors.
Sahra King
We need your money kind of thing. So that's kind of how I started, was just talking to people, just letting them know what I did. But as a female, it sounds ridiculous, but it's really, really hard.
Michelle McPhee
And, you know, it works having a man there to sell them on it.
Sahra King
So he started getting people to invest that he said it was his company.
Michelle McPhee
Maybe John is overstepping, but he also seems to be helping Sara reel people in. There are two sides to a hard money lending business. Getting investors to give Sara money so that they can make money. And the other side, giving out loans to men and women who needed money quick and don't want Citibank to ask a ton of questions. Sara told me there was a special type who could and would pay 30% interest on a loan.
Sahra King
Oftentimes you're looking at a guy in Newport beach who God knows what he wants 20 grand for, right? Between 20,000 and 100,000 they usually need. And they gave me a Rolex worth 40. I gave them 20 grand. I don't ask the questions. I don't want to know what's happening.
Michelle McPhee
Yeah, it was a little weird, but they had the hard assets to back it up.
Sahra King
Some guys would hand me their wives Birkin bags and jewelry and they said, just, I have to get it back within a month time. And I said, okay, in one month, you know, you're going to pay 30% on the money, big time money. Like I. These guys have boats and whatnot. They're now they're poor all of a sudden. So they gave me the little assets and I literally gave Them the cash for half the value and charged them 30%.
Michelle McPhee
So why would people okay with paying 30%? Because I can tell you, like, I don't know, I'm broke as shit, but I'm still not giving my credit card company 30%.
Sahra King
I will say that people do it because they're struggling for cash. Like, I don't do a credit check. If you give me assets to hold that are worth the money, I will give you the cash without a question. And that's a huge deal. That's what made my whole business, you know, work to begin with.
Michelle McPhee
If Sahra was actually getting 30% interest on these loans, it was an insanely good business proposition. A little too good.
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.
Michelle McPhee
Sarah said she put all her trust in John McCabe.
Sahra King
He would tell me that these people owe him money. They're just going to use my account because he doesn't want to used cash because of his business. I said, remember, I'm a fixer, right? So I said, no problem. So he uses the account I gave him, I cash out the money for him and I never see it again. And I'm on the hook for owing people money.
Michelle McPhee
We later find out that John McCabe denies this. He says Sahra wasn't even a business associate of his. Saradin seemed to be taking careful note of where the money was coming from and where it was going. For someone who should have been dealing with hard facts, crunching numbers day in and day out, Sahra told countless stories about money and collateral just disappearing in a bad deal. 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. I can't tell when Sarah's lying to me or lying to herself. Things were not going well for lady mafia, and John seemed to be creating more problems. He hadn't even helped her sell the marijuana buildings. And it was looking like Sarah was on the verge of losing her parents home. So when she was dead broke, Sarah told me she decided to make one last gamble.
Sahra King
I had like 100 bucks left to my name, right? So I go to the store, I buy, I put $100 on the scratchers.
Michelle McPhee
My jaw dropped when she told me this. So let me get this straight. She went from big money deals with fancy people to scraping her fake nails off a scratchy.
Sahra King
I take the scratches to my office and I'm like in tears, but I'm scratching and I'm winning, winning, winning. And I get the call that we've sold the buildings. And it was just amazing.
Michelle McPhee
When a buyer eventually came through and purchased the buildings, Sarah said John McCabe took the credit.
Sahra King
When I finally found buyers for the building, he said, oh, that's. Those are my people. So I felt loyal to him. I was in such a stage of failure, I wanna say from the buildings at the time. My income was just terrible that I believed him. I felt like he was there for me the whole time.
Michelle McPhee
So as Of January of 2021, the pot buildings were finally off her plate. No more desperately trying to sell gummy bears at the country club. And the lending business Sara had been launching with John McCabe's help was finally getting off the ground.
Sahra King
We started needing all these big time investments, right? So that's when I started funding a lot of things. He buttered me up. He would come every day to my house and be my best friend.
Michelle McPhee
But John McCabe was unfindable. No LinkedIn, no Facebook. Our fact checker even tried a reverse image search for him with a photo Sara sent, but nada. Deep into reporting this series, Sara told us that she wasn't even sure that John McCabe was his real name. That was gutting. I had spent months looking for this guy and now, only now, she was admitting that the name might be an alias. Then one Friday, my editor got a call. A man said, you've been trying to get in touch with me. We had even sent a certified letter to his last known address in Hawaii. At long last, John McCabe had called. The conversation was brief. That's when he denied even being an associate of Sara Kings. My editor wasn't deterred. She asked to send him a bunch of questions we had about his dealings with Sahra. He agreed. Only we never heard from McCabe again. Instead, his criminal defense lawyer, a guy out of Irvine, California, called us to say that he had advised John McCabe to not comment at this time. It was frustrating, but I wasn't ready to throw in the towel. I needed to find someone else who'd met John McCabe, someone who'd worked with him. I needed to understand what was going on with Sahra's lending business. So I went hunting for one of the people who gave money to King Family Lending. If the story of King Family Lending sounds all over the place, yeah, you're not imagining things. Sara told me time and time again that she was legit, that King Family Lending was legit until John McCabe showed.
Sahra King
Up the first five or six loans there absolutely was, and everything was totally cool and fine and it just turned out that they never got paid back. So I had to try and fix that money.
Michelle McPhee
I finally got someone to talk with us, an investor of Sara's, a man by the name of George Poulos.
Ryan Reynolds
It's a fucking disaster. Pardon my fucking French, but, you know, is what it is.
Michelle McPhee
George wasn't pulling any punches.
Ryan Reynolds
Buckle up, girls, buckle up.
Michelle McPhee
George is married, has two young kids, and used to run an IT business, but is now retired very comfortably, it seems. He lives in a wealthy family friendly neighborhood in the oc. He looks a little like Christian Bale in his wiry beard. Era. George first met Sarah in July 2021, around six months after the pot buildings were sold.
Ryan Reynolds
I met her through a friend. I was looking for an investment and that's how I got introduced.
Michelle McPhee
They met at a restaurant in Laguna beach, overlooking the ocean.
Ryan Reynolds
Yeah, she was. How do I want to word this? Flirtatious to a male, of course. You know, she's not exactly what I would consider ugly. She wore relatively revealing clothes, which no big deal, I mean, but she told me about some of her deals and I had said I would be willing to split one with her. And that's how we started progressing forward.
Michelle McPhee
So Sarah came up with a deal for 125k. She told George a little about the person they'd be lending money to.
Ryan Reynolds
It was a famous CPA accountant in Newport. She told me, I don't even know the guy's name. I know nothing about him. And we get the money back plus interest in 90 days. She goes, I've loaned to him before. He always pays early and he's a repeat customer. I went, oh, okay.
Michelle McPhee
While they were working through the deal terms, Sara introduced George to John McCabe. Sarah and John, that is.
Ryan Reynolds
She always made it sound like he was protecting her. That's how she worded it. There didn't seem to be any love interest between the two of them. It was more of maybe a mentor type of thing.
Michelle McPhee
Why would Sahra have needed protection? From who? Kind of strange, right? George insisted on doing his due diligence.
Ryan Reynolds
One day, and it was before I had put the money into the deal. I went, I spent a day with John McCabe. He drove me around first.
Michelle McPhee
They met at Sara's office and George asked to see the collateral for the loans.
Ryan Reynolds
So she was holding the car with a signed pink slip from the owner. She had them in a little, like a little plastic envelope Like a clear envelope just to protect them, you know? And I collected six of them because I wanted to verify vin's. And so John was like, hey, no big deal. I'll take you to all the car places.
Michelle McPhee
George took the pink slips so that they could drive around to the lots and verify that each of the sign slips corresponded to one of the cars in their possession. Honestly, I mean, a smart idea.
Ryan Reynolds
We went to a place kind of close to where I'm at now in Costa Mesa. There was probably 20 Ferraris, not all hers, but some. And there was one the guy was working on. He was a restoration. He was working on. He was a black one, and it was an older one, like in the 80s or something like that. But it was pretty well torn apart on the inside. But he was restoring it. And children matched the Vince. And I'm like, it matched. So we did that to the rest of the cars. I had lunch with John.
Michelle McPhee
Then he took George to the marina to see the collateral for his loan. An F44 Tiara yacht.
Ryan Reynolds
So we go down into Newport, we go to Lido, and it's down there. We go in. I go right on it. I'm standing on it. It's got a little dinghy next to it. Very nice condition. Clean, not stinky, the whole bit. Oh, okay. He fires it up, see? Blah, blah, blah.
Michelle McPhee
And next they went back to Sahra's office.
Ryan Reynolds
You know, she spilled a bunch of jewelry and watches onto her desk out of the safe she had under her desk. You know, it was like 12 inches by 12 inches square. And she just dumped it. You know, she had tags on them saying who they belonged to, you know, that kind of thing.
Michelle McPhee
So it seemed like all the collateral checked out. And what was more, Sarah seemed loaded.
Ryan Reynolds
She showed me her Rolls Royce she was having wrapped.
Michelle McPhee
She had a 2019 Rolls Royce Dawn. It's an almost $400,000 car. And she was having it wrapped white on white with a navy blue soft top. It was kind of trashy, but also kind of gangster. Her rose was an advertisement that if you worked with lady mafia, you'd be rich, too.
Ryan Reynolds
You know, when you're in that mode, you're excited because you're theoretically going to make money.
Michelle McPhee
George just came off a day where he verified a half a dozen VINs on some Supercars, tore the yacht, and eyeballed a bucket load of rocks and watches.
Ryan Reynolds
And so it all looked legit. So I said, let's go ahead and do it. So she drew up a contract, and we just did a deal. For that particular deal, 125,000 for me to go in, and then I'd have the money back in 90 days plus X amount of money.
Michelle McPhee
The rate George was promised was 36% a year. To put that another way, imagine if you could wave a magic wand and make 11 grand in three months, not lifting a finger. And George was confused, too. Who is on the other end of these loans? What kind of person can afford that much interest? But is that cash poor?
Ryan Reynolds
And they're like, well, these rich people get paid once every three months, and they need this money just to bridge from one paycheck to another. Their checks are so big, it doesn't matter to them. And I'm like, okay.
Michelle McPhee
And this might not make sense to you or me, but George lived in the O.C. he told me he knew somebody who said he was worth 100 million after doing a decade of hard money lending. Imagine you took that 125,000 and invested it for a full year. By the end, you'd have almost 200 grand in 10 years. By then, you've made around $4 million. And why stop investing at 125k at that rate, which is better than almost anything else out there. Why not pour in your whole savings account? What if you discovered the secret for getting not just comfortable, but filthy, stinking rich? George became more and more involved in Sahra's business. They were going out for lunch. Each time Sara was dropping a couple of hundos on the table for the bill.
George Poulos
Yeah.
Ryan Reynolds
Yes, yes, yes. Yeah, I heard it. I heard it. She wanted to make, like, a lone mafia situation down in South Orange County. And that was kind of our motto. We were all like. It was me, her. Her assistant John, and. And another guy. We're like, let's just put our head together. We have all these skills here. Let's make something of this. Let's make it like a legit big business, and let's use her business model that she's got running, which at that time we didn't know was false to build upon. And, you know, I was going to be the guy to, like, technologize everything, because everything. There was nothing on the computer. So I was going to do that side of it, you know, take care of all the technology. And, you know, everybody was going to do some of their part and she was on board.
Michelle McPhee
So George was doing his part being an IT business guy and all.
Ryan Reynolds
I had worked with an online software company to put her loan business online. And so we could track it, we could look at everything. All the loans, where they are, where they are in their process, how much money is going to come back to us? Everything. It was all spelled out well. So I said I got it all running, and I worked with her assistant to both learn it. The guy gave us lessons and the whole bit.
Michelle McPhee
This online setup could take the whole operation to the next level, make their lone mafia legit. But George started hearing hints, just little whispers that people were after Sara.
Ryan Reynolds
As John and I got to know each other a little bit, he goes, dude, you don't want the people that are looking for her after you. You don't want it. And I was like, what? What have I stepped into? You know? Cause I got two kids at home, dogs, wife, the whole. I don't need any trouble.
Michelle McPhee
George got spooked, but not enough to quit. He was still on board with the idea of becoming the loan mafia of the oc so he was still moving forward with his part of the operation, getting the business online.
Ryan Reynolds
When I got the system all running, I needed to put the loans in, and she had made comments like, well, we have 10 or 15 loans out that are in flight that we. That were in process, you know, including the one I was on in her. I go, great, give me the list and I'll put it in the system so we can get this thing started so it's like active. Oh, all right. She hands me a fucking napkin with, like, chicken scratch on it, and I go, well, what's this? Well, those are loans. I go, what loans? I don't see anything on here about any money. I go, what about the one I'm on? What's in there? It's right there. And it was just chicken scratch right on, like, a little piece of paper. And I'm all, you don't have, like an Excel spreadsheet or something that this is in? No. Why? I mean, it's in all in my head. I go, then write it into English. Right? Loan 1. How much was it for who? How much did you put in? What's the end date and what kind of profit? Let's get columns so we can just look at it and know where we are.
Michelle McPhee
It's a fucking mess. He said she couldn't find the paperwork for a single loan.
Ryan Reynolds
Massive pile of dog crap. Massive. And she couldn't produce one. I gave her a couple days, you know, she goes, I'm working on it. I'm working on it. And then to pay for the software, she gave me her credit card, which shocking, bounced. You know, they wanted, like, a small fee per month for four or five users and she couldn't even pay that.
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George Poulos
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Michelle McPhee
So how did that little piece of chicken scratch turn into a Rolls Royce? How exactly was Sara able to run a financial business with such sloppy accounting? One of the ideas that's come up is the possibility that Sara was never actually a lender at all. She was just taking investments, taking money. I've heard this from several people we've interviewed. The idea is she was running a Ponzi scheme from the very beginning, using new investments to pay old ones.
Derek Lewis
It's a person that is running a Ponzi scheme.
Michelle McPhee
Here's our expert on hard money lending again, Derek Lewis. He's familiar with her story.
Derek Lewis
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. She's got the signs of, you know, this escalating need for higher and higher return. The documents prove that out. She's just, it's just somebody that's getting behind the eight ball constantly and probably has, you know, probably has more confidence then she has. Ability to make it work because she's not paying her bills as they come due.
Michelle McPhee
That's certainly what it looks like to me. I asked her about it.
Sahra King
Yeah, no, absolutely. I absolutely did do loans.
Michelle McPhee
So yeah, I told her receipts would be helpful. Still waiting on them later on in a text message. She claimed all the paperwork was on a computer that had been stolen. We pushed for anything that would prove her business. She'd message back with a text only list of supposed bank transactions or old photos with people she claimed to have loaned money to. Sara gave us the names of a few people she said she loaned money to. A global investor in culture, another dude with a crazy long rap sheet. We Reached out to the name she gave us, but never got a response. I feel for her and the mess she got herself into. I think she's fearless, funny, a total character. But at this point, I'm starting to think she's a compulsive liar, a loan shark with a license. George's filthy rich dream had turned into that massive pile of dog crap. And what was more, George realized it was highly unlikely he'd ever get his $125,000 investment back.
Ryan Reynolds
So when I saw the lack of any records, I went, uh, oh, I'm screwed. And she kept making excuses. I'll get them. I have them. They're in my house. I lost. You know, all this bull crap. It's like third grade. You're like, really? I mean, you claim you're a lawyer. You don't lose stuff.
Michelle McPhee
George decided on a strategy at first. Stick close to Sarah in hopes that he'd be the first in line to get his money back. But he wasn't the only investor. Sara wasn't paying back. And these other guys were just about fed up. They weren't going to play nice at that time.
Ryan Reynolds
They were watching Sarah's house 24 hours a day. She was on full surveillance by non PI people 24 7.
Michelle McPhee
Her relationship with D. John had begun to sour.
Ryan Reynolds
I honestly thought she would not make it. Honestly, between all of us, I thought, somebody's going to get her. I didn't know who it was going to be, but I just thought, you know.
Michelle McPhee
And George says that all of these guys who did not mean her well, were watching her from across the street.
Ryan Reynolds
Her apartment, I think it was a fifth or sixth level, and across the street was a parking garage where you could go up to the top and you could park. And that's where they were observing her from. And they had some sort of binocular telescope. Whatever it was, I wasn't there, but I knew where they were. They bring food, and they'd just sit there and watch her. And you could see her buzz around her apartment at like midnight. And you're just going, what the fuck?
Michelle McPhee
And what they saw was Sara's life spiraling out of control.
Ryan Reynolds
You know, she's doing Adderall nonstop. You know, she's up all night because she goes, she just doesn't sleep. And I go, she just looks very jittery, whatever the word you want to use. I. I didn't know at the time what was going on until, you know, they all told me, and. And even John would go, she doesn't.
Michelle McPhee
Go to bed, George saw this one video of Sarah.
Ryan Reynolds
It was 3:00 in the morning. You could see the timestamp on the iPhone, 3am and Sarah was on a treadmill singing at the top of her fucking lungs. And it was like 3, 10 in the morning. She's a messed up individual. I mean, there's no way around it. She's down there bringing like birthday cards to me with full of hundred dollar bills and exchanging that for Adderall. At different places.
Michelle McPhee
In this mix, George met another guy Sara had fleeced.
Ryan Reynolds
I ran into one of her other people again. He shall remain nameless. And they had loaned a similar amount of money that I did, but he involved his mom and dad, so. And they're part of a very large wealthy family here in Newport beach, like horrifically wealthy.
Michelle McPhee
And these horrifically wealthy people, they had a different strategy with Sara.
Ryan Reynolds
The dad, they invited her or I don't know how the phone call went to get her to go to this restaurant, but she showed up. Maybe they said, we're going to give you more money. Maybe they tricked her. I don't know. I wasn't there. But the dad leaned in and just told her, if we don't have our 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. There'll be no investigation. There'll be nothing. You will cease to exist. And they had all their money the next morning complete. Just boom. He goes, I don't want any fucking profit out of you. I want the money you took.
Michelle McPhee
Next time on lady Mafia. With threats pounding on Sahra's door.
Ryan Reynolds
She was physically overpowered by some of the people she ripped off and she got scared. She told me some pretty bad stories. I think there are certain people you shouldn't defraud in this world.
Michelle McPhee
Sara chose a Shangri La that many have fallen for.
Sahra King
I started to panic and that's actually when I finally told, you know, I told Cameron, I'm like, this is what's going on. Like I don't know how to handle it. And that's when he said, okay, you're good at these thoughts. Win back. Because he's seen me win tons of money on him. So I said, okay.
Michelle McPhee
In the midst of a financial wreck, Sarah chose to follow the promise of easy money. In Las Vegas, you kind of go.
Sahra King
Down this rabbit hole, you know, I told you, my dad's quote to me is, winning isn't everything. It's the only thing and so you get competitive against a stupid machine. And you should know better than to gamble against the house like it doesn't ever pay off. Ever.
Michelle McPhee
That's next time on Lady Mafia. Don't want to wait for that next episode. You don't have to unlock all episodes of Lady Mafia ad free right now by subscribing to the Binge Podcast Channel. Search for the binge on Apple Podcasts and hit subscribe at the top of the page. Not on apple. Head to getthebinge.com to get access wherever you listen. As a subscriber, you'll get binge access to new stories on the 1st of every month. Check out the Binge Channel page on apple podcasts or getthebinge.com to learn more. Lady Mafia is an original production of Sony Music Entertainment. It was hosted and reported by me, Michelle McPhee. Odelia Rubin is our lead producer and wrote this episode with a little help from me. Catherine St. Louis is our story editor. Shara Morris and Jonathan Hirsch are our executive producers. Sound design and mixing by Scott Somerville. Theme and original music composed by Hans Dale Shee. We also use music from Epidemic Sound, Blue Dot Sessions and apm. Our associate producer is Zoe Kulkin. Our fact checker is Fendal Fulton. Our production manager is Tamika Valens Kolasny. Special thanks to Steve Ackerman, Emily Rossick, Jamie Myers, and Allie Kilts.
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.