MEG: Welcome to the Stand With Meg Show. I’m your host, Meg, and this is Shawn from The Shawn Lee Report. Welcome, Shawn.
SHAWN: Thank you for having me.
MEG: How are you today?
SHAWN: Wonderful. It’s a hot day here in Kansas.
MEG: It’s very hot. I don’t know if you guys are experiencing the heat wave that we are, but it’s pretty miserable. So I’m excited to see what you have planned for us today, Shawn.
SHAWN: Oh, so much. So much. We’re going to try to accomplish as much as possible today. As you can see, our fraud folder has gotten a lot thicker.
MEG: Very, very thick.
SHAWN: Yes. And I have been reading some of the comments, and I’m prepared to address some of them here today.
MEG: From Facebook, from Instagram, from TikTok. And I also have a list of questions to ask Shawn today, so we’re looking forward to that. As always, on any episode or any reel, if you ask a question, I try my hardest to pull them all together so we can answer them while Shawn’s with us.
SHAWN: All right. So, Meg, this is not just me trying to talk to you and to victims. We’re talking to law enforcement agencies. We’re talking to United States attorneys, prosecutors, judges. This is meant to be an educational show. So the first thing I’m going to plug is all the lawyers out there.
MEG: Wait, you’re promoting lawyers?
SHAWN: Lawyers. I brought with me the Bar Association directory for Kansas City. If you all think you’ve got a bad lawyer, well, look how many of them are out there. So if you think you got a bad lawyer, go out, burn up the phones, find a new lawyer. I assure you there’s more, and we make new ones every year. So if you think you got a bad apple, go get somebody fresh out of law school.
MEG: Yeah, like the gentleman who helped my friend in California.
SHAWN: Yes. They come out of law school, and not all of them have some silk-stocking firm with marble and mahogany lined up.
MEG: And they’re not corrupt yet, either.
SHAWN: So you can pay them a relative pittance, and they’ll go do the research. They’ll do the work, because they don’t have jobs yet or they’re opening fresh solo practices. They have no allegiances, no conflicts of interest.
MEG: And they probably don’t have any bad history.
SHAWN: A lot of them come from victimization themselves. You’ve got to understand, this has been going on for a while. Some of them got motivated to go into the law…
MEG: Like you did, right?
SHAWN: Right. Like me. I was motivated to go into the law because I saw injustice. And there are a lot of people coming out of law school today all over the country, raring to go, and they can’t start until they have a client.
MEG: That is so good to know. So we just helped lawyers! That made my whole day.
SHAWN: People forget we are a cannibalistic species. We will eat our own.
[Break]
SHAWN: Meg, how would you like to learn about one of the first major frauds that our country publicized widely?
MEG: The first one?
SHAWN: One of the first ones. Have you ever heard of a fellow named Charles Ponzi, from Ponzi schemes?
MEG: I’ve heard of Ponzi schemes. Wait, that’s where the name came from?
SHAWN: Yeah. Ponzi schemes are named after the fellow who got indicted and convicted of it, Charles Ponzi.
MEG: I had no idea.
SHAWN: Before Charles Ponzi, the schemes existed, but they didn’t have a name. Now they do: the Ponzi scheme.
MEG: Wow. Learn something new every day.
SHAWN: So some of these schemes being run on victims don’t have a name yet, and they’re not going to get a name until somebody gets indicted.
MEG: Wow. Oh my goodness, my light bulb just went off. (clicks on a light-bulb prop) I need a light right here, so when I learn something new, I click it and the light bulb goes on.
SHAWN: I love it. In the law, we call that a demonstrative exhibit.
MEG: A demonstrative exhibit. We’re demonstrating the light bulb going on.
SHAWN: So, Charles Ponzi. The reason Ponzi schemes are named after him is because he’s the guy who got indicted. I have the original Supreme Court syllabus from 1922 here, Ponzi v. Fessenden. You can take a look at this; it’s fairly thick. He wasn’t necessarily using wires. He was using the mail. What he would do is recruit money from investors with fake financial statements about how successful he was. They would invest, and he’d provide some returns, but he would use new investors’ money to pay old investors. A Ponzi scheme eventually runs out of people and runs out of money. That’s how it ends, every single time.
MEG: This was in 1922?
SHAWN: 1922. Here are Charles Ponzi’s original letters to the Massachusetts State Prison and to the U.S. District Court, to the Honorable [judge’s name unclear]. Mr. Ponzi was an incredibly intelligent person. He represented himself pro se, unsuccessfully. But what you can see here is that schemes and artifices to defraud have always existed. And some of the schemes and artifices to defraud that exist today as a result of these virtual court orders don’t have a name yet, because nobody’s been charged and convicted yet.
MEG: Well, and if you think about it, family court is such a new thing. They didn’t have family court back then. They had court. There have always been divorce laws and custody laws, but what we’re doing now used to be child labor laws. I looked into the history. Have you ever looked into the history of it?
SHAWN: Child labor laws? I worked for $7 an hour growing up, mowing yards.
MEG: I’m talking about back in the ’40s, when it started, how it broke off into child laws, and then they turned into family court and all that fun stuff.
SHAWN: And child labor, if you go back to a certain point in history, was child slavery.
MEG: Yeah, exactly. So we’ve come a long way. Family court didn’t really get big until the ’80s.
SHAWN: So family court has existed for a long time, but so has the exploitation of children.
MEG: Yes.
SHAWN: And so what you have to be wary of are policies, procedures, people, and organizations that realize the extraordinary revenue opportunities in schemes involving vulnerable classes. And children are a vulnerable class.
MEG: They are. They can’t speak up for themselves, and they make the most money.
SHAWN: They can’t log into Zoom and say, “Look, Zoom judge and Zoom lawyers and Zoom doctors, I’ve seen it all. Y’all are way off base.” Children can’t do that. So that’s the history of Charles Ponzi. That’s the history of the Ponzi scheme. He was charged in state and federal court.
MEG: I want to bring up a fun fact real quick while we’re talking about this. Have you ever heard of the most haunted hotel in the Midwest?
SHAWN: No.
MEG: It’s in Eureka Springs, Arkansas.
SHAWN: I’ve been to Eureka. It’s a fine town.
MEG: I can’t think of the name of it, but the whole hotel used to be a hospital back in the ’30s. And the guy’s pitch was, “Come here and we will cure your cancer.” What they were doing was having people from all over the United States go there and send letters back telling their loved ones that they were getting cured and getting better, all through the mail.
SHAWN: Right.
MEG: And of course they weren’t. They were all dying, and he put them in the back. It’s one of the coolest hotels to visit. The history is neat. But that is a Ponzi. That’s what he was doing. He was lying. I’d have to look and see if he got in trouble.
SHAWN: I wouldn’t call it a Ponzi scheme, but it’s a scheme.
MEG: But it’s still fraud, right? Because it went through the mail.
SHAWN: Yeah. And they could name that scheme after him, because he got convicted of it. Forevermore, that’s his scheme.
MEG: And if you think about it, there were no laws for hospitals back in the day. There weren’t any of the regulations we have now. So you could do whatever you wanted, until people started reporting it and holding people accountable. That’s when things changed and more laws came in for hospitals and all that. So this is what we’re trying to do: get you guys to report family court fraud and CPS fraud, because no one’s been doing it. Well, we really couldn’t until now, correct?
SHAWN: Correct. It’s just not anybody’s job other than federal agents. It is not CPS’s job to enforce the federal criminal code. It is not the family court judge’s job to enforce the federal criminal code. It’s not the bar association’s job to enforce the federal criminal code. You just have to go to the federal criminal code people, meaning federal agents.
MEG: Now, I’m going to ask a stupid question. When the federal government comes in… let’s say you have a killing. The FBI won’t come in to look at that incident, that death, unless it crosses multiple jurisdictions, right? Multiple states. That’s the only time they can come in as the FBI.
SHAWN: You are leading me into my next folder.
MEG: Oh, really? We don’t even prep for this. He just shows up, we just start going, and I have no idea what’s coming.
SHAWN: Okay. So I’ve introduced you to a famous example of a scheme and artifice to defraud. Now let’s go into our new cast of characters.
MEG: Our new cast of characters. If you don’t know, look at our previous episodes. Shawn made these characters so we can talk about them and so he can protect his license. He put them together himself to resemble the actors in your cases.
SHAWN: Sure. I can have suspicions. I can have a good-faith belief that people are engaging in these terrible things. But unless I have proof, I really can’t comment on some of these things. Unless I’m hired to come in and file something, I can’t give a comment. So that’s why we created fake characters.
Some of the questions we’ve received have been about law enforcement. Why can’t we get the cops to do anything? Why aren’t the cops doing anything? So let me walk you through some of our police officers and their jobs, and let’s start with some famous examples.
Here is the famous sheriff from Three Billboards Outside Ebbing, Missouri. Will you hold that one for me? And here is his deputy. Well, his sergeant or his deputy. This is his SWAT team. He’s got a SWAT team, and a good-looking one, too. This is the detective assigned to the case. This is the patrol officer. They’re going to take the initial report.
MEG: My goodness, there’s a lot here.
SHAWN: There is a lot. Law enforcement is incredibly complicated. Here are state police officers. Here is FBI Agent John Good. And here is our task force. So let’s put these in a row and reintroduce them.
MEG: We’ll put them up on the screen. So you’re going to describe… you’re trying to help us understand…
SHAWN: I’m trying to help you understand how law enforcement interacts and works. At the very base level, you have your patrol officer. You pick up the phone, you dial the law enforcement agency, you say, “I want to file a report,” and they’re going to send a patrol officer. In this case, it’s Officer Jake Gyllenhaal.
MEG: This is like 101.
SHAWN: Yeah. Officer Jake Gyllenhaal is going to come out and interview you, and you just tell him whatever you tell him.
MEG: File a report.
SHAWN: Right. And the only way you can really get in trouble is if you give them false information. They’re not going to arrest you for having an opinion. They’re not going to arrest you because you gave them information. But if you give them false information, you can be charged.
MEG: So the report’s happened, the police officer leaves, he writes the report. Then where does the report go?
SHAWN: Then, potentially, it gets assigned to a detective. Now, if it doesn’t get assigned to a detective, guess what you can do?
MEG: What?
SHAWN: Complain.
MEG: Okay. And how do we know when it’s been assigned to a detective?
SHAWN: You may not know. But think of it this way: if you go to McDonald’s and you don’t get a good order, you complain to the manager.
MEG: Okay. So people file a report, and it’s supposed to go to a detective. What makes it not go to a detective? When they don’t think a crime was committed?
SHAWN: There are several reasons it might not go to a detective. Number one, nobody’s paying attention. That could be it.
MEG: What do you mean, no one’s paying attention? Isn’t there a system where it goes through a pipeline?
SHAWN: I can tell you that law enforcement faces a crushing, overwhelming amount of information. Agencies are frequently understaffed, underpaid, underappreciated, and have complicated stuff going on. So unless you have a bullet hole and are actively bleeding out in the right zip code, you’re probably not at the top of the list.
MEG: Okay. So if it doesn’t go to a detective, you have a right to complain. You call the sheriff or the police department you reported to, and you ask to talk to the chief or the person in charge.
SHAWN: Yeah. Say, “I want a detective assigned. You’re not doing anything on my case. I want to talk to a detective.”
MEG: And I have personally done this, just so you guys know, and it worked.
SHAWN: Now, here’s the problem. There’s a shortage of good detectives. Everybody wants to be SWAT. They all want to run around in their tactical gear with their AR-15s and their body armor, riding around in armored vehicles. Everybody wants to be SWAT. And that’s a problem, because there’s only so much SWAT work. And frankly, if there were more detectives, there’d probably be less SWAT work.
MEG: Why?
SHAWN: Because detectives have the capacity to go after the more complex crimes, and to do it in a way that avoids risk to life and limb. Before it turns into a SWAT situation, it was probably a detective situation for a while.
MEG: Right. But the SWAT team only gets pulled out when there’s a heavy arrest and a warrant out that a judge signed.
SHAWN: Yes. And the SWAT team is there to protect life and limb to the extent it can. They have to execute warrants. They have to save people. Sometimes people don’t survive these things. You have police-involved shootings. I practice a lot of criminal defense, and I like to tell my clients: there are two ways to go to jail. You can walk into jail, or you can get carried into jail. It’s better to walk in.
MEG: I agree 100%.
SHAWN: So you get a detective assigned. That’s when you can go to the detective and say, “Look, here’s the case. Here’s how the case works.” Now, that detective may or may not take any action. They may not believe it. They may not understand it. It may not be at the top of their priorities. Again, they could have hundreds of cases, and some of those cases are horrific: horrific injuries, horrific losses. And that’s where the task forces come in.
There’s a famous movie, The Untouchables. This is a task force. It’s an example where multiple people are on the same team, but from different agencies. We have an accountant, we have a federal Treasury agent, and then we have two officers from the Chicago police. The veteran admits right up front, “Look, it’s corrupt. I know it’s corrupt, and I’m just trying to get to my retirement.”
MEG: Of course.
SHAWN: Just trying to get to his retirement. And then you’ve got the rookie they pull off the vine, who’s not associated with anybody. He’s like, “I’m a rookie. I don’t care. I can make a career out of this.” What you do is balance interests. The rookie is excited to take on something new that no one else will do. The veteran is happy to let the rookie go do what he’s going to do and to be part of something before he retires. He’s tired of the corruption he knows about.
And then the federal agent and the accountant are hunting down the money, the nuanced math, the tiny little facts that prove the scheme exists, and they’re bringing the resources. The local officers probably don’t have the resources to do this sort of thing. They don’t have an accountant on staff. They don’t have a team of people they can send evidence to. The federal side does, but it doesn’t have the relationships local law enforcement has. So that’s why you have a task force when you go after fraud: it takes a task force to go after fraud.
Now let’s talk about state police. The Departed is a great film, and it somewhat mirrors real life. In this particular story, you have two officers, and neither of them has any idea the other one exists. And that happens.
MEG: Wait a second. Two officers… what?
SHAWN: Two officers, same agency, neither aware the other one exists. That happens. That’s the part people need to understand: law enforcement is not purely political. It’s like a hammer or a wrench. If you use it correctly, it will function. And what law enforcement can do is send people into areas without notifying the local agency.
MEG: Is that like the reel that’s been going around, where a police officer pulls over an undercover FBI agent and starts giving him hell?
SHAWN: I mean, that happens. If you’re in a confidential investigation or you have a cover identity, you’re not going to go tell the local police department or the local sheriff.
MEG: Unless there’s corruption involved.
SHAWN: Exactly. You’re not going to tell anybody, and you’re going to keep a confidential file. The only way people are going to find out who you were is the day the cuffs go on, and then it’s too late. So these resources exist.
Same goes for this. This is FBI Agent John Good. It’s a film that’s somewhat historical, I think, but essentially he goes undercover. That’s something FBI agents can do. One of the risks of going undercover is that you forget who you are and what you’re supposed to be doing, and you get wrapped up in what you’re doing there. Undercover work is inherently dangerous.
However, let’s hold up our patrol officer. Say our patrol officer reports the same type of scheme. More importantly, say 5,000 patrol officers all across the country report it, with complaints from people all over the country about the same type of scheme. Or say the patrol officer himself went through a $100,000 divorce. Then they can get a detective assigned, and a detective can get a task force.
MEG: And that’s when they go interview people, look at all the information, look at the invoices you provided.
SHAWN: Exactly. You work the system, and it all starts with getting an affidavit on file. All these people who are complaining about this scheme and artifice to defraud have to start by filing the law enforcement complaint, asking for detectives to be assigned, and asking for a state and federal fraud task force.
MEG: So you’re saying when somebody files their complaint with the FBI, like I did, and they don’t hear back from a detective, they can call them?
SHAWN: With law enforcement, what typically happens is you put information in and get nothing back. The reason for that is they don’t want to compromise the integrity of their investigation. When you file information with law enforcement, one of their challenges is the sheer volume of information coming in. The FBI gets so many tips that they need algorithms to go through it all, because no human being could read it all in a lifetime. That’s why it’s important to build face-to-face relationships with detectives and federal agents, so you have somebody you can contact. Even if your email or your call goes unanswered, you’re a real person to them, not some nameless, faceless figure who submitted a tip online.
MEG: Okay. Is that going to take us into the job posting?
SHAWN: It certainly can. I’ll take your suggestion. Let’s put our cast back in our folder. We’re building a file, a fraud file. We’ve got to keep it organized, because we’re going to give this away.
MEG: Give it away? Like, this is what you would hand over?
SHAWN: We are putting together fraud research to give to a task force investigating fraud.
MEG: Oh, got it. I love that. So smart.
[Break]
SHAWN: Check this out. Tell me what you see there.
MEG: It’s a LinkedIn post: “Special Agent, Law and Legal.” So the FBI is trying to find special agents with a law and legal background?
SHAWN: They’re hiring lawyers to be special agents.
MEG: Oh my gosh. One week ago. That is insane.
SHAWN: If you’re going to go after legal corruption, meaning schemes and artifices committed by people with bar licenses, you need people with bar licenses to do it. We know how it’s supposed to be done, and we know what it looks like when it’s fraudulent. So they’re actively trying to get the people in place to investigate current schemes and artifices to defraud people.
MEG: That’s crazy cool.
SHAWN: And look, we’re not saying people involved in the family courts are innocent. We’re not saying people in the family courts don’t have challenging and asymmetric issues. We’re saying it shouldn’t cost as much as it’s costing, it shouldn’t take as long as it’s taking, and it shouldn’t be as horrifically bad for everyone involved. The fact that a client may have mental health issues, drug issues, alcohol issues, and communication issues doesn’t make every single case exceptional. That’s actually run-of-the-mill. If I charged $50,000 in criminal defense to everybody who’s on drugs… I can’t do that. It’s up to me as a lawyer to have systems in place so I can protect people from themselves and not charge unethical and illegal fees.
Now let’s talk about a famous case of corruption: the Kids for Cash case. Tell me a little bit about what you see here.
MEG: (reading) “Philadelphia Division. County Court of Common Pleas Judge Indicted on Racketeering, Fraud, Money Laundering, Tax, and Related Charges. The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a federal grand jury sitting in Harrisburg has returned a 39-count superseding indictment charging former County Court of Common Pleas Judge Mark Ciavarella…” How do you pronounce his name?
SHAWN: Ciavarella, I believe.
MEG: “…Ciavarella, with racketeering and related charges in connection with alleged improper actions to facilitate the construction and operation of juvenile detention facilities owned by PA Child Care.” Wow. When was this?
SHAWN: Let me break this down for you. PA Child Care was a private, for-profit company, and it ran detention centers for children. So if you were a child accused in a juvenile matter, anywhere from assault and battery to rape to murder, if you violated the criminal or juvenile code, you had to go to a detention center. Well, families started noticing that he was sentencing kids to these detention centers in an overly harsh and horrifically long manner, for trivial things. So they conducted an investigation, and sure enough, there was a money trail. He had a private, vested interest in these companies.
MEG: So the more kids that went in, the more money he got.
SHAWN: The more kids that went into the system, the more money he made. That was the system. Now, what you don’t see in this indictment is any of the family law practitioners in his court who knew and stood silent.
MEG: Oh, that’s a good point. So that means they should be in trouble too?
SHAWN: Theoretically, yes.
MEG: It’s like… what’s it called? I can’t think of it right now.
SHAWN: He got convicted of this. This happened. PA Child Care LLC and Western PA Child Care LLC are the companies. He got convicted, and he’s doing the time for it. And if the victims and the companies and the judge knew, then it is inconceivable to me that the bar didn’t know.
MEG: Of course they knew.
SHAWN: Right. Which is why I keep coming back to this: go to the legal directory, hire somebody fresh out of law school, and say, “Here’s what I think is going on.” There might be some lawyers who are in on some schemes and artifices to defraud, but by and large, the majority of them are not.
MEG: So what do you do, though, if your attorney is brand new, right out of school, and he goes up against your ex’s attorney, who’s a veteran, and that attorney just bulldozes him?
SHAWN: Don’t be afraid of people who are fresh out of law school. I’ve been a person fresh out of law school. You can reach out to people for mentorship, but more importantly, you’re hungry, and you’re not blind. Some of these lawyers who’ve been at it a long time develop tunnel vision. They know the people they know. They know the judges, the social workers, the GALs. And when somebody comes in who’s not part of the team and really makes problems, that’s their worst enemy. So don’t be afraid to try those new people out of law school. They’re hungry, they’ve got something to prove, and you can get them for dirt cheap.
MEG: Yeah, I agree.
[Break]
SHAWN: Tell me what you see here.
MEG: (reading) “InfraGard… Kansas City Members Alliance… FBI, Internet Crime Complaint Center, Department of Homeland Security, United States Computer Emergency Readiness Team.” What is this?
SHAWN: That’s a card I applied for and received.
MEG: A membership card?
SHAWN: I saw the changes coming from our virtual courts, and I applied to an organization called InfraGard. InfraGard is a partnership between the private sector and the Federal Bureau of Investigation, and it grew out of the September 11 attacks. It’s civilians who work in areas of critical infrastructure. We provide information to the FBI to help them protect that infrastructure. There’s a lot of engagement from bankers, engineers, people in agencies. We don’t want our systems taken down. We’re not focused on the smaller stuff, a little bit of drugs or a little bit of violence. Our focus is the protection of critical infrastructure. That’s why you have to apply to get in. I had to submit an application, and they ran a background check on me. Once I was approved, I got access to some of the intelligence the FBI published to InfraGard about pending threats to the American people.
MEG: I’m so confused. So you’re part of this organization, this is your card, you got background-checked, and now you’re part of this group? They only let in certain people who pass?
SHAWN: That was true. I submitted my resignation a couple of years ago, after I’d done my tour. But before I did, I prepared a 90-minute presentation for them about the risks to our virtual courts. Now, I can’t publish that presentation.
MEG: Because it’s private?
SHAWN: Because it lays out risks to our courts that could be exploited by foreign nations, by criminal organizations, and by all manner of bad actors. I have to keep a list of everyone I show it to. But the FBI is aware, because I gave them a 90-minute presentation on the risks to our virtual courts.
MEG: How many people are in this group?
SHAWN: I’m not sure of the exact number of members, but I can tell you it’s nationwide.
MEG: And people who get in can see stuff no one else can see?
SHAWN: You get in, and yes, you can see things the FBI publishes that are secret. You have to apply to get in, and under penalty of potential legal consequences, you have to keep any of that information from leaking.
MEG: So, to help people understand this: the Minnesota case, when they decided to arrest those people for fraud. That information probably could have come through here first, before they actually arrested them. Is that what you mean?
SHAWN: I mean, potentially.
MEG: I’m not saying it happened like that. I’m just trying to give people an example, because everyone knows about the Minnesota fraud from Nick Shirley’s video, the daycare and learning center fraud.
SHAWN: As an InfraGard member, what you do is identify risks to our critical infrastructure. Say something could damage the national security of the United States, hurt hundreds of thousands of people, or cause millions, billions, or trillions of dollars’ worth of damage. You explain it to them so they can prevent harm to the American people. It stemmed directly from the 9/11 attacks, because they didn’t want that repeated. Nobody heeded the warnings, because there wasn’t a system in place.
MEG: Got it. That makes sense. Awesome. Okay, Shawn, what are we going to talk about on the next episode?
SHAWN: Well, we’ve got a big folder here, and I think the appropriate thing to do would be to get into family court social media.
MEG: That’s a good one. Oh my gosh, I’m so excited. Thanks for joining us today, Shawn from The Shawn Lee Report, on the Stand With Meg Show. Tune in next time. Thank you, Shawn, for this wonderful education on criminal law, filing a complaint, and all that fun stuff. We learned a lot today.
SHAWN: Thank you for having me.
MEG: And Shawn, what’s your ending line? We’re going to get better at this. Ready?
SHAWN: There’s less criminals in criminal law than in family law.
MEG: Good job. Stand with Meg.