Gordon Grigg – How a massive Ponzi scheme fraud was exposed – Part One

The article stated, “Thanks to taxpayer protector and crusader of bailout transparency, Inspector General Neil Barofsky — under the guide of the ever-noble Obama administration — Tennessee is in the headlines as the home to the first exposed bailout-related criminal case. Franklin’s very own Gordon Grigg was accused by the U.S. Attorney’s Office in Nashville on Wednesday for his creation of a $10.9 million fraudulent investment scheme.”  But that’s not the total truth…the real exposure of Gordon Grigg’s fraud started well before Neil Barofsky got involved.  Frankly, it started with a little known retired US Airways pilot named Steve Wieland.

I can’t forget the call I received from Steve.  I didn’t know what to make of it at first, but quickly I began to realize that he was spewing a tale of an ongoing fraud that in many ways he uncovered.  Carefully I listened to his story and understood that not only had he been defrauded, but he became unknowingly entwined in the web of deceit having expanded the trust network that Gordon Grigg so carefully played upon.

But this story is not so much about Gordon Grigg’s fraud – that is clearly known.  Rather, this is about how the fraud was exposed and, likewise, how Grigg lured his victims into the web of deceit.  For this series of blogs I asked Steve Wieland to share with me answers to many questions I asked.  Here I will, with Steve’s help, show how easy it is to become a victim of a talented fraudster.  Let the interview begin…

HOW DID I GET SUCKED IN?

I had met Gordon Grigg in the summer of 2005. He fathered my girlfriend’s child. This child was a product of an extramarital affair between the two of them. He had moved away from our town with his family. I had just started to connect with his son where I live. He was divorced and had a new, young fiancée. He was extremely charismatic, funny and generous.

For the next two years he came to visit on multiple occasions. But in that second summer, after I met him, I became sick. I was a professional pilot and my illness caused me to lose my medical license to fly airplanes. I had broken my back and had extreme pain due to nerve damage in my feet. I was on 17 medications a day and under psychiatric care due to depression. Additionally my girlfriend and I had broken up, although we remained friends.

My finances were not going well, my airline had already taken my pension, and I was 57 years old with mandatory retirement at age 60. One day my ex-girlfriend told me I should seek financial advice from the father of her child, and now my friend, Gordon Grigg.

Interesting that many, if not most, fraudsters find victims that are susceptible or vulnerable to a scam based on their expanded need.  Steve exposed his need based on the varied circumstances he found himself in at the time.  And Gordon, being the astute fraudster saw a weak individual that became easy prey to advance his Ponzi scheme.  But back to the story…

Gordon Grigg’s website was exemplary.  He touted advising everyone from racecar drivers to foreign rock stars to country music singers and professional athletes.

Since we had been friends for over two years and my girlfriend, the mother of his child, had recommended him, I felt comfortable in having an interview with Gordon to take over my finances.

As a side note, it is quite common that a fraud is expanded to new victims based on a close relationship of trust.  Note:  Gordon first got close to create the bond of trust, so that when it was time to lure Steve in – closing the sale was easy!

This would be the first time we’d ever talked about money. He came into my home, opened his briefcase, and after four hours we had never talked about finances. Instead he talked to me about religion. He asked me how long I’d been angry at God. He told me about his own depression and how he had to commit himself for 30 days to a psychiatric ward to become normal again.

He held my hand and prayed with me. At the time, he seemed like a godsend. I mean what more could I want? Here was a man who had been a college football star, handsome charismatic, extremely versed on investing and was willing to take on my financial package. When he left my home I asked him about the finances. He just smiled and told me not to worry about it and to get myself better. He said that was the most important thing. He said he would take care of me. And believe you me, take care of me he did!

The mark of any good sales person is to first find out what motivates you and then meet those needs.  NOW CAREFUL…not all salespeople are bad or use their talents for unscrupulous means.  But, Gordon was, well lets call him, an unconscious competent.  Perhaps, at some point he became a conscious competent…in other words he was an expert at what he was doing – all be it, what he was doing was WRONG!

Two months went by and Gordon had taken  away all of my control of my finances by having me sign a limited power of attorney up to and including my will where he made himself the executor. My health was starting to come back, but nowhere like it should have been. He invested me in legitimate TD Ameritrade accounts and then sold and bought in these accounts without  my knowledge until I received the monthly statements. He would visit periodically and I would take HIM to dinner. He would tell me that in 12 months I would kiss the ground he walked on. And then he told me of some special investments that only he could make because he pooled other investor’s money. These investments would be for millions of dollars and  I alone could not make these investments without being in his pool.

I often refer to victims of Ponzi schemes as having fallen into the PIT – PROMISE, TRUST and ILLUSION.  Based on what Steve shared above, Gordon got in based on trust, created the illusion (so Steve would continue to believe) and then made promises that enticed the victim – giving the illusion that they were special – that what they would receive was unique and only offered to a select few.  Actually, in that last part they were telling the truth – only a few select people would become victims!

As it turned out, I have a friend in California who is much like myself  being medically retired from the airlines. We talk all the time and visit occasionally. After investing with Grigg, he asked me what I was doing with my dwindling investments. I told him about Grigg and what a fantastic job he was doing for me and suggested he call him. After talking with him on the phone, Grigg suggested that he fly to California and meet with my friend.

Many of the fraudsters find that they grow their fraud based on the referral of those who are fully sucked into the scam.

At the time Grigg had advertised that he had offices all over the United States. But neither one of us did due diligence to investigate any further than what Grigg had published or had promised.

Interesting, but as I interview victims of frauds one of the most common comments is, “we were so caught up in the belief that our financial needs could be met that we forgot or ignored doing due diligence.”

After two or three meetings my friend decided that  he was going to invest with Grigg as well. Grigg did the same thing to him. He took over all his finances, reinvested them, and then put hard cash in bogus investments.

We were both very happy to see our investments growing while the rest economy was falling dramatically. What we didn’t understand was that the investments were only growing because Grigg typed the statements up on his laptop and generated them to us via his website.

I told yet another pilot friend, who was and is still active, and suggested he talk to Grigg as well. Grigg made a couple of trips to Phoenix where he met with my friend, driving a lavish rental car, dressed to the nines. This friend, however was skeptical, and did some research. He found out that Grigg had a $560,000 judgment against him by the state of North Dakota. When my friend called to inform me of this I immediately called Grigg. He assured me that it was a bogus complaint made by a widow, who did not know her husband’s investments and that no one could be in the business for 20 years or more and not have a complaint. I relayed this to my friend, and although he was still skeptical, chose to invest $20,000. That is less than 10% that myself or my friend in California invested.

For PART ONE…this sets the stage.  The fraud that Gordon Grigg had taken from North Dakota to Tennessee was soon to be completely exposed.  But, for now in the time we have this is quite enough.

Let me thank Steve Wieland for his courage to step out and expose (through his experience) how a fraud is perpetrated and how easy it is to be sucked into the PIT.  I regret Steve’s loss, but know that others will, perhaps, avoid the same disaster Steve and others faced at Grigg’s hand.

I have been alerted that Steve Wieland’s perceptions of the facts (from his perspective) stated above are inaccurate and untrue.  My objective is to uncover and/or discover what motivated folks to “invest” with Gordon Grigg, to review how a Ponzi scheme takes place in reality and identify how it unraveled or was exposed.  As such,  according to the SEC:

Grigg and ProTrust defrauded at least 27 clients out of approximately $6.5 million by obtaining such funds from them and claiming to have invested them in securities that do not exist. Specifically, the Complaint alleges that the defendants have: (1) obtained control over client funds and falsely claimed to have invested such funds in fictitious securities that were described as “Private Placements;” (2) created false and fraudulent account statements reflecting the clients’ ownership of non-existent securities; (3) falsely claimed that the defendants had the ability to invest client funds in government-guaranteed commercial paper and bank debt as part of the U.S. government’s Troubled Asset Relief Program (“TARP”), and that they did invest client funds in the TARP program; and (4) falsely claimed to have partnerships and other business relationships with several of the nation’s top investment firms.

I welcome any of the 27 client “investor” victims to contact me in an effort to seek the truth about how you became involved with Grigg and ProTrust.  There are many victims in a circumstance like this, and if there is a way to expose how what happened – happened, perhaps in the future others will have the benefit of learning from others mistakes.  Likewise, if there is anything stated above that is inaccurate, please contact me with details so that corrections can be made.

STAY TUNED FOR PART TWO!

YOUR COMMENTS WELCOME!

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13 Responses to Gordon Grigg – How a massive Ponzi scheme fraud was exposed – Part One

  1. Rafael Martin says:

    Thanks for the words of wisdom. Hope to learn more from you.

  2. Mr. Bali says:

    Nice info…thx!

  3. Pamela Hagen says:

    Gordon started scaming me in 2001 right after my husband had passed away. I went through years of hell with Gordon after he had all my money. I started asking questions and for my money back but he always had an excuse. It was one of the most frustrating times in my life.
    My husband and I became involved with him in Charlotte, NC. He was a New York Life Agent and we gave him some money for investments and bought life insurance policies from him. I still can’t believe anyone with a heart would jeopardize a life insurance policy. I thought he was such an upstanding, Christian man and even asked him to take my teenage children out for dinner and share some of his wisdom. WHAT A JOKE! The hurt and devastation is impossible to get over.

  4. KD says:

    Has anyone come forward about Gordon Grigg and his pursuit of models to manage? I am here to attest that I too was drawn in by Gordon and his promises of a profitable future in modeling. I guess things didn’t work out for a reason….his motto, “never ever lie to me, because I will never lie to you” resonate in many directions.

    • TE says:

      I too was a product of his model scam. You are not alone! I believed so many lies from him. He claimed to be a professional photographer, a manager, and other things. Finally, Grigg is paying the price for scamming so many innocent people and taking advantage of them.

      • K Dawn says:

        Thanks so much for sharing, if it’s ok, I’d like to ask…how he impacted you and for how long? I will share the same. Are you aware of others in the U.S. or abroad? Did you have “yahoo chats” with the supposed super model in the U.K. that was his #1 model? How did you learn that he was in prison? Again, just curious if he was twisting your mind with similar tactics? thanks…kd

  5. steve wieland says:

    In my pursuit to put Grigg in prison for his Ponzi scheme I received a lot of media attention.After his sentecing i was contacted by some individuals who were victums of his modeling scheme.thier lives were completly devistated.I contacted thr FBI in Nashville, TN to see about filing criminal charges against him and the agency that represented him but since I was not personally involved they could do nothing. The FBI required the individuals to come forward……Due to the devistation and embarassment they had, they chose not to due so. That is each indivduals choice…..I,myself, decided to forgo that and came forward…..

  6. LM says:

    I too was a victim of that model scam and recently googled to see his sentencing for the financial situation which makes me feel somewhat relieved. But as for me and the other models he molested and sold footage of, he needs to spend an additional 10+ years in prison per girl. He truly is a con artist and after he builds your trust knows how to use it to his advantage. If you have money he takes it and if you’re a pretty girl he molests you and takes your picture while doing so. He truly is the lowest of the low.

  7. Wow says:

    Blows my mind that so many people were wronged by this man. I’m glad I got away from the modeling scam when I did. Things could have been much worse.

  8. KD says:

    thanks Wow for sharing….I’d not looked at this exchange for a long time, and am curious if you OR any of the models who were scammed, could share a little about the storyline. I’m just quite curious to know if he followed the same pathways as he did with me on some of those AMAZING life experiences. For example, did he put you in yahoo chat with his “#1 Euro model” who was supposedly saved by him while in Serbia (he was there for some top govt. undercover mission LOL) … she was supposedly only 12, and was orphaned when her parents were killed during some violent disturbance there. He said he took her to London to be rasied by close friends of his, and she decided she wanted to try modeling, so he said he started managing and developing her when she was around 20 years old, and when I was talking to her on yahoo, I believe she said she was 29 years old, and making over 500,000 a year because of Gordon, and all his help. SO …. quite exciting for a model to think that Mr. Grigg had that kind of influence! (you can imagine with his super potent personality, he was extremely easy to believe). He never seemed bragadocious, and his energy was intoxicating, like he was some sort of super power. So if anyone would be willing to share….I’m not asking for anyone to divulge their identity, I just would like to hear of another model’s experience.

  9. Steve Wieland says:

    My name is Steve Wieland. I am the man who uncovered Grigg and Chuck was the man who published my story nationaly. I had been on TV and in various newspapers both in Charlotte and in Nashville but it was Chuck who made the story I told to people all over the U.S. For the record I have recieved no money for my story nor do I want any. I only wanted to expose him, and others like him, to as many people as possible.Chuck has helped me do this. Please read my comment posted on Sep 7 2010… I am asking again for you to bond together and file a comlaint with the FBI both in Charlotte and Nashville.Grigg is by far the LOWEST scum of the earth I have ever met. I told the Judge in my statement in the in the courtroom who would determine how much prison time he would get that the most valuable thing we have is not money but the time we have here on earth. I believe that even more today as my wife commited suicide by shooting herself in the head. What I wouldn’t give for one more day with her. So I ask of you ladies to bond and put this animal back in a cage forever……

    • kent steel says:

      Steve,
      There is no difference between this thief and all the rest of them doing the ponzi thing, they all start the same by asking you about your relationship with God, as if they are going to pray for you and help you to have what they have, all along they are preying on you, like an evil money hungry piece of shit that only cares about getting more to feed there nasty non caring greedy habit, and unfortunantly we have all experienced this with creepy people. We are still not recovering from the $187,000.00 that was taken from us either from a so called broker.
      It’s “All about the Money”

      Kent Steel

  10. [...] Gordon Grigg – How a massive Ponzi scheme fraud was exposed …Mar 30, 2010 … Frankly, it started with a little known retired US Airways pilot named Steve Wieland. I can’t forget the call I received from Steve. I didn’t know … [...]

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