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Scammer Targets Friends in Real Estate Ponzi Scheme

In part 1 of this podcast, Monique Brady's victims share their experience working with her

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Kim and Sal considered Monique Brady family. Their children were close friends, and the families even vacationed together. Despite her booming house-flipping business, everyone who knew Monique described her as generous and down-to-earth. Monique’s success and go-getting personality convinced Sal, who worked in mortgages, to invest in her projects. But when the IRS shows up at Sal’s office asking questions about Monique, everything the they think they know about their good friend begins to unravel.

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[00:00:00] Michelle: This week on The Perfect Scam.

[00:00:03] She was a charismatic. We, we just had a lot in common and she was down to earth which I loved. We clicked so much, you know we, vacations together and family gatherings, cookouts, holidays.

[00:00:17] I liked her. I, I liked her a lot. You start to meet all the friends, you start to meet everybody, and we just obviously just got sucked into the social scene with everybody that, that she was friends with as well. It never even entered into my mind at all that she was literally lying and scamming and stealing. I thought I knew her that well, that there's no way she would do that.

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[00:00:45] Welcome back to The Perfect Scam. I'm your host, Michelle Kosinski. This week you know scams are virtually always unexpected, that's the point, the insidiousness, the setting of the trap, the inevitable, terrible surprise. But this one grew from the most unlikely of places for the victims, from someone they thought they knew so well and loved for so many years. But I don't want to give anything away. It's all best told by the people who lived it.

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[00:01:19] Michelle: Let's take a trip up the coast, all the way up to New England, Rhode Island, and let the wind carry us along the rocky shores of the old Narragansett Bay to a village founded in the 1600s. There are bright white sailboats shining in the harbor. In town, quaint restaurants and gift shops, a calligraphy studio. East Greenwich is also the wealthiest community in the state and its sprawling gabled homes with welcoming porches, manicured lawns, and swimming pools make it like a movie set of Americana where having the perfect life might just seem possible if you dream it. And Monique Brady definitely dreamed it.

[00:02:02] I met Monique and, and her children, gosh, that was 2000 maybe? A long time ago.

[00:02:11] Michelle: Do you remember when you first met her?

[00:02:13] Our children had a birthday party and I; I remember my daughter saying, "Oh, Mommy, this is um, you know, the twins' mom. And I, I want to set up a playdate with them." And I remember I couldn't even get the conversation in because um, she was on the phone a lot. She was constantly on the phone and we'd just set up playdates with our kids and that's where our relationship grew, and um, we clicked instantly, instantly. She was a charismatic. We, we just had a lot in common, and she was down to earth which I loved, uh, 'cause that's how I am.

[00:02:50] Michelle: That's Kim Savastano. She grew up in Rhode Island, a mother of three, and lived not far from Monique and her husband, Tom, a firefighter. Their kids were little at the time, and she soon found Monique to be like a rare treasure amid the white picket fences and mock tudors that defined the landscape.

[00:03:09] Kim Savastano: We clicked so much that um, you know we, the vacations together and, you know, family gatherings, cookouts, holidays. That's how it became. It was very, very nice.

[00:03:23] Michelle: What stood out about her personality?

[00:03:26] Kim Savastano: Very giving. I, I, I mean, she really was generous with anything. Honestly, she really was, you know, borrow this, take this, um, you know, oh I, I, I picked you up this, and you know, very, very generous to me, my children, everything. Honestly, I, I, you couldn't ask for a better friend, really.

[00:03:49] Michelle: A new best friend that you meet as an adult. That's hard to find. Monique Brady's background was also different. The petite, smiley, bubbly sociable force of a woman was born in Vietnam. Her family was extremely poor and in the vast upheaval following the Vietnam War, she, her mother, and sister tried to flee in a boat that then sank in the South China Sea. They had to be rescued and ended up in a refugee camp in the Philippines, eventually making it to America where her father already was. But her parents divorced, and Monique lived with her dad in Houston. She and her sister had to take care of the house themselves and would be punished by being hit with a wooden spoon. She was always missing her mother.

[00:04:38] Kim Savastano: Very tough, very tough. It was a tough life for her. It really was. And if anything I, I admired her truly because she really worked her way up and, you know, a lot of time she was home alone with her sister and it, you know, her dad worked like three jobs, so it was, it was a tough life for her. But she was very determined, and she put herself through law school and schooling and it was a really tough part of her life, but she came out smelling like roses.

[00:05:08] Michelle: By the time Kim met her, they were in Rhode Island. Monique had stopped practicing law and had gotten into real estate. Then, as the economy started to implode, ultimately becoming the collapse of 2008, home foreclosures started happening. Monique built a business rehabbing these houses for banks so they could resell them and recoup some of their value. It took off like, well, a house fire. Her husband, the firefighter, was a down to earth regular guy, but with Monique's expanding success, she moved the family, their four children into a big picture perfect, traditional white house with black shutters, gabled roofs, and a row of dormer windows at the top. It was surrounded by land and trees. Had a beautiful pool and outbuildings. It would be just about anyone's dream home in the nicest part of the nicest town. But you can imagine for Monique, once this scared little girl escaping Vietnam in a sinking boat, she was the go-getter who made sure she got it all.

[00:06:17] Kim Savastano: If anything that made her stronger, um, and determined to succeed. So she was very driven.

[00:06:24] Michelle: So she presented herself as this self-made woman from very humble beginnings.

[00:06:31] Kim Savastano: Absolutely. Definitely. Definitely. It was a beautiful house. She fit right in with the, you know, the town of East Greenwich.

[00:06:39] Michelle: Monique made sure she did in her self-made Cinderella story. The pretty real estate tycoon with long glossy brown hair was always put together. She was charming, witty, liked to laugh and have fun and threw lots of parties. She knew everyone and became a center of social life in her sweet, but exclusive Rhode Island community.

[00:07:02] Michelle: And she would have, you know, um, moms' luncheons with you know, she was very involved with all the parents and the kids and the neighborhoods and sports and activities.

[00:07:15] Michelle: Like the kind of girl you want to be friends with.

[00:07:17] Kim Savastano: Yeah, yeah, exactly. Exactly.

[00:07:21] Michelle: Did she seem ever like she was trying to show off back in those days?

[00:07:25] Kim Savastano: Um, no, she didn't, she never flaunted it, because that's, that's what I loved about her. As much as she had that money, she still was down to earth. You know, I'd come to her house, she'd be in her bathrobe, and she'd be like, you know, chilling with her kids or um, not stuffy at all and never would throw it around and, you know, but yet we'd sit there and chitchat, like oh, you know, Dave's got the, the chicken cutlets on sale, and always looking for a bargain, and you know, um, I'm going to see if I can get a deal on this. She just seemed very ordinary, just, and I think that's what truly attracted me to her because I felt so comfortable with her and her friendship, and she seemed genuine.

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[00:08:07] Michelle: And the Savastanos and Bradys were becoming closer, beyond just kids and playdates. They would have dinners all the time, take trips together and have heart to heart conversations. They were like one big family after a while. They knew Monique's relatives. By now, Kim was even godmother to one of Monique's children.

[00:08:27] Michelle: But her husband, he was a pretty nice guy. You guys liked him a lot too, yeah?

[00:08:31] Kim Savastano: Yes, Tom, Tom was a great guy. Um, great dad. We would go out to dinner, and that's how my husband and Tom got friendly, and um, you know, there was, there was like a core group of us that was really, really close.

[00:08:44] Michelle: But as perfect as Monique's rags to riches life seemed, in some respects she was under pressure too. She had this busy career and four kids including twin daughters. Two of her kids had health issues. Her son has severe autism with all the challenges and heartbreaks that brings. Her days were full.

[00:09:05] Michelle: She seems like she must have been just a dynamo.

[00:09:07] Kim Savastano: I don't know how she did it either. Honestly. Her day would start very, very early. She'd be up at 4, 4:30 because um, bids would come in from whatever her, the line of work she was doing.

[00:09:20] Michelle: But Kim and Monique never really talked business, at least not in any detail.

[00:09:24] Kim Savastano: One time I was with her, and she, she had to stop to see a house that needed a rehab. Um, and I, I just went with her to the house. I mean it, it was, you know, obviously a foreclosure or something like that, and it was, you know, needed a lot, a lot of work and, and she just went and she took her pictures, and she did what she had to do, and I think that was the only time that I really had anything remotely close to seeing what she did.

[00:09:54] Michelle: So was that house in really bad shape? Was it like falling apart?

[00:09:57] Kim Savastano: Yeah, this house, this, this one particular house that we went to see needed a lot of work. I mean it was, I, I didn't even want to walk in it.

[00:10:04] Michelle: So while Kim knew the social mom side of Monique, Kim's husband, Sal, who's a mortgage banker is the one who got to know her business sense. Let's bring him in.

[00:10:14] Sal Savastano: I liked her. I, I like her a lot. Then you start to meet all the friends, you start to meet everybody, and we just, obviously just got sucked into the social scene with everybody that, that she was friends with as well. Uh, you know, without question, we got very, very close because her daughters practically lived at my house and I really would have done anything for her and her husband because that's the people that we are.

[00:10:35] Michelle: And he also understood the real estate situation that Monique seemed to have mastered.

[00:10:41] Sal Savastano: So, in my business, 2008 was a very monumental time.

[00:10:45] Michelle: Yeah. Yeah.

[00:10:46] Sal Savastano: You remember it, you know, the economy crashed, banks were dropping out, the mortgage institutions were just been dropping, dropping. Foreclosures skyrocketed. So that created this massive, massive vacuum of incredible amounts of properties, and all these lending institutions did not know what to do. They now owned all of these houses that people just said, here you go, here's the keys. Here are the keys, here are the keys, here are the keys.

[00:11:08] Michelle: Right.

[00:11:09] Sal Savastano: We don't want them. So she got in. I don't know how, she kind of fell into it a little bit, and she just went with it. And I think it was the wild, wild West. Nothing was being checked, there was no balance to anything. The banks were just desperate to have anybody come in and say, yes, yes, we'll, yes, yeah, whatever you want. Just do it.

[00:11:28] Michelle: Yeah, will you take this off our hands?

[00:11:28] Sal Savastano: Right, so, so I'll give you an example. So let's say you and I are, we'll use an example of Wells Fargo. We're Wells Fargo. We, we have now acquired a home. We, we, we've got it from foreclosure because the person didn't pay. We want to sell that asset, but the house needs work, you know, the person who owned it before kind of destroyed it.

[00:11:47] Michelle: Yeah.

[00:11:47] Sal Savastano: Now the banks were saying, whoa, we know the house isn't in very good condition, but if we just put a very small amount of money in it, we paint it, we fix the kitchen, we fix the bathrooms, we fix the roof, we can actually sell the house for a much greater price and get a market price as opposed to having to wholesale the property.

[00:12:06] Michelle: Exactly.

[00:12:06] Sal Savastano: So where Monique would come in is, her pitch was, listen, Wells Fargo has a house. It needs roughly 28, 30 thousand dollars’ worth of work. I put the bid in. If Wells Fargo approves, it's going to cost me 30, but we're going to charge the bank 45, so we're going to make $15,000. That's our profit. And we should be able to have that turned around within 2 to 3 months.

[00:12:29] Michelle: Got it.

[00:12:30] Sal Savastano: But she's like, but I don't, but I don't have one house. She's like, I have probably 20 or 30 houses going on at a time. And I have multiple contractors and I, you know, I need lots of plumbers and I need painters and I need this, and I need that. And now her big thing was is, I only have limited resources because I have to fund the job. I have to come up with the money first to do all the work and do all this.

[00:12:51] Michelle: Interesting.

[00:12:51] Sal Savastano: And then I get paid. So she was basically saying, you know, I, at any moment in time, I could have, you know, eight, nine hundred, a million, a million dollars out on the street in all these projects, and yes, it comes in, but then it goes out.

[00:13:03] Michelle: Yeah.

[00:13:04] Sal Savastano: And arbitrarily one day, we were in a cookout or wherever we were, and I just said, "Well, how many opportunities do you pass on because you just don't have the capital to fund them?"

[00:13:15] Michelle: Good question.

[00:13:16] Sal Savastano: And she goes, well, and she just said, "Well sometimes it's a lot."

[00:13:20] Michelle: And so were you already thinking, like I could, I could be in this.

[00:13:24] Sal Savastano: Of course, because I could, I could fund it a little bit. Now I'm looking at it saying, well it's already approved, and it's rehab work. I do rehab work because in addition to me being a mortgage banker, over the years I have bought lots of houses, fixed them up, and sold them. So I'm very familiar with that. I had contractors, I had plumbers, so I said, well geez, since the project's already approved and it's guaranteed money, because I know these banks aren't going to not pay, it's very, very low risk.

[00:13:54] Michelle: Right.

[00:13:54] Sal Savastano: I must have said, if it ever comes up and you were considering it, let me know and we can discuss the financial terms and see if it's worth it or not.

[00:14:01] Michelle: It was obviously working for Monique.

[00:14:03] Sal Savastano: She just happened to be at the right place at the right time that this glut of homes that needed attention by these lending institutions, that's what led to a lifestyle that she was very, very excited about. The money just came pouring in, and of course, what did most people do? They spent it as fast as they could get it. And, and that's, you know, you know, when she, obviously she bought a multi-million dollar home in East Greenwich.

[00:14:26] Michelle: And when they would spend time together, Monique loved to live it up. She enjoyed to the fullest.

[00:14:33] Sal Savastano: I mean vacations all the time. Kids go to private schools. Good cars. Live in a big house. Always out to eat. Right, I mean, you know, yeah, always had a, a new bag or something or whatever, you know. Oh, Super Bowl, off to, off, off to wherever the Super Bowl was going, wherever it was. She loved her Patriots. She would follow them wherever they went. No big deal.

[00:14:53] Michelle: And she would spend a lot of money and would you say that she was flashy?

[00:14:59] Sal Savastano: No, no, I mean she, yes, she liked her Louis Vuitton bags, but she wasn't one of those, you know, let's just say the few times that I actually went to drop the kids off to school in the morning, I was shocked to see a lot of the moms completely like done up, makeup here, like they were going out to dinner on Friday night with their husbands. And it's, and it's Monday at 8. Monique, she'd be the person who'd roll up in her bathrobe, um, and slippers, and look like she just rolled out of like a bender for three days. She could care less. That was, that was not her.

[00:15:38] Michelle: I love it. I love it.

[00:15:38] Sal Savastano: Yeah, no, she didn't care. She, yeah, she really didn't. And I guess kind of really, to be honest with you, that's one of the reasons why I liked her and why I liked her husband, 'cause I, they, you know, they lived in East Greenwich, but they didn't have the attitude that comes with East Greenwich.

[00:15:51] Michelle: Oh, that's interesting.

[00:15:52] Sal Savastano: But she always drove a nice car, she always wanted to have a nice car. She always wanted to eat at nice restaurants. I gravitate towards people who are more real as, as opposed to someone who really cares that much about their image and what other people think of them.

[00:16:06] Michelle: And when you would talk to her about real estate, she seemed to know her stuff.

[00:16:12] Sal Savastano: Absolutely. Completely, completely knew her stuff. Yep.

[00:16:16] Michelle: One thing the Savastanos came to realize about her, Monique liked to gamble, like really liked to gamble. She was a high roller in Las Vegas.

[00:16:26] Michelle: What kind of gambling would she do?

[00:16:28] Kim Savastano: She would just the slots. Just the slots.

[00:16:31] Michelle: Oh my gosh.

[00:16:32] Kim Savastano: She would sit there for hours and, you know, and just play the slot machines. Which I am not a gambler. At all. We went one time she invited us, my husband and I, to go with her, and we, we could stay for free, alls we have to do was pay for our airfare, because she had, you know, such comps as they call them, with this particular hotel. It was magnificent where we stayed and, and she had, you know, a penthouse suite up on whatever floor and you know, VIP access and um, you know, we dined at the finest restaurants and this, this was all, all new to me.

[00:17:15] Michelle: Did you think like, that's kind of weird, or that might be a problem, or did it bother you guys at all?

[00:17:22] Kim Savastano: No, I just thought that, you know, she liked to gamble, but she legit would just sit there for hours and hours and hours and just gamble, and this would be like in the wee hours of the night. Like she'd go down at like, you know, 11, midnight, and she would gamble till like 3, 4 in the morning.

[00:17:41] Michelle: And she, did she ever talk about losing a lot of money gambling, or she just wouldn't really go there?

[00:17:46] Kim Savastano: She would never tell me a dollar amount. She was just like, "Yeah, I didn't win, I didn't win." And you know, I wasn't the type of person to ask.

[00:17:55] Michelle: Right.

[00:17:55] Kim Savastano: I was just like, oh my god. I go, I said, "I don't know how you do it." I said, I would lose $20 and I would be devastated.

[00:18:03] Michelle: Yeah. Exactly. You would feel like robbed or something.

[00:18:07] Kim Savastano: You know, yeah, I, I assumed it was a lot of money because to stay where we stayed and have the accommodations, you know, it's not nickels and dimes. It, it had to be a substantial amount.

[00:18:16] Michelle: Yeah, like she was paying for it. Right.

[00:18:19] Kim Savastano: Yeah.

[00:18:19] Michelle: She was also always getting comped tickets for concerts and events at a local casino in Connecticut. Still, the Savastanos knew her well. Kim would speak to her at least on the phone daily.

[00:18:30] Kim Savastano: She was definitely like my best friend. My kids called her Auntie Mo or Auntie Monique or, you know, that, that's how close we became.

[00:18:40] Michelle: So close that after knowing each other for years, this was now around 2012, Monique asked the Savastanos if they could spot her $5,000 so she could pay her work crews while she was waiting on payment from a bank.

[00:18:53] Sal Savastano: My wife said, "Can we give it to her? She said she'd give it right back." She did give it like right back, like, like it was strangely, like it just, it didn't make sense.

[00:19:02] Michelle: Did that bother you that she had this big nice house and the Louis Vuittons, but she needed to borrow $5,000?

[00:19:10] Sal Savastano: I probably didn't look at it the way maybe I should have. It was strange and weird, and I didn't even think of it twice, but you know, you have so many things going on in your life. You know, I'm like, it would have been more of a hassle and brain power to have to worry about $5,000.

[00:19:25] Michelle: Got it.

[00:19:26] Sal Savastano: And figure out why she needed it, and so I just said, whatever. I don't care, right? And she never asked again. Never did.

[00:19:31] Michelle: There was at least one other time the Savastanos remember that Monique was very stressed about work, that she was crying, and something had happened that made her feel like she wasn't sure what she was going to do. But she didn't ask for money then. And remember when Sal had casually mentioned that he might want to invest here or there in some of Monique's projects if the opportunity arose? It wasn't until around 6 months later that she told him she might have something.

[00:19:57] Sal Savastano: "I have a project," she's like, "It's not a big job, but you know, it's like a 29, 30 thousand dollar job. I probably could do it myself, but if you want to get in and you want to test it out and just to see what I do..." I go, "Yeah, cool. That's right, what's the address?" I drove by the address; I went to see the house. It was a bank-owned property. I could tell. I know, right, it, it had all the makings. I'm like, okay, the budget sounds right, whatever, and then we negotiated. It wasn't a ton of money; it wasn't a lot. I think I had to put up, like whatever, say 29, 30, and in three months I'd probably make whatever, three or four or five grand. Not a lot, but when you do the, when you look at the time the money is, it's like, it's kinda sorta easy money, and I didn't have to do anything really. She was handling it. She's managing it, she's whatever it is, and so that's why I only received a portion of the profit.

[00:20:46] Michelle: It goes well. Sal likes it. Who wouldn't? He had the money to invest and was now ready to do more.

[00:20:53] Sal Savastano: But the money that I was investing was so minor. Worst case scenario, if it goes wrong, who cares? That's not lifechanging. I was never going to invest money with her that was going to affect the lives of myself and my family.

[00:21:07] Michelle: Right.

[00:21:08] Sal Savastano: It was an opportunity for me to potentially escalate the return, you know, so instead of having the money sit in the stock account that's variable, I looked at it like, this could help me so much more for, for things in the future.

[00:21:22] Michelle: Sal starts to invest in more and more projects with Monique. Sometimes he'd take the profit, but more often he'd just roll most of it over into the next project. And whenever he would tell her he needed a chunk of his money back for something, it was always there. No problem, no questions asked.

[00:21:39] Michelle: How many investments would you say you made with her?

[00:21:41] Sal Savastano: Oh, my god, so many.

[00:21:43] Michelle: Like dozens?

[00:21:44] Sal Savastano: So many. Oh jeez, over the years it was probably well over a few hundred, a couple hundred. Well over. Maybe the most at one time she owed me on paper was probably like $750,000.

[00:21:57] Michelle: But the money is always moving in and out with each project, and this goes on for years, like six or seven years during which Sal estimates he placed over a million dollars with Monique. Always earning on paper around a few thousand per project. It's all just perfect, extra money, reliable, and seemingly guaranteed by these contracts Monique has with banks. Although Sal has a brother named John, also a mortgage banker. They're very close, and he's kind of like Sal's conscience on these things. He starts asking questions.

[00:22:34] Sal Savastano: He's just like, "Something doesn't smell right there, kid."

[00:22:37] Michelle: What sort of set him off?

[00:22:39] Sal Savastano: Little things about her, like well why does she, why does she need you? After all these years of being so successful with all her money coming in and going out and then coming in and going out, making so much money, why wouldn't she be able to fund all of it yourself? Why does she need you?

[00:22:55] Michelle: Very good question.

[00:22:56] Sal Savastano: You and I both know very, very successful people who don't have a dime because they, they spend, they spend their money. I'm like, and he's like, "Yeah no, that's true." He'd ask a question and I'd be like, that's a very good question he'd ask. So I would like put that in the databank, and I would ask her, but I wouldn't go, hey, my brother raised some great questions, and I don't trust you. So what I would do is I would sporadically just ask her very random questions, and then I would also like, just watch, so to speak, 'cause some of the things that John had brought up, she always had an answer.

[00:23:28] Michelle: She had an answer for everything?

[00:23:30] Sal Savastano: Well it's just that he, he had a, you know, a spidey sense off the back of his neck so to speak, you know.

[00:23:36] Michelle: Interesting.

[00:23:36] Sal Savastano: But it would just be every once in a while that he'd mention like, "You know, I'm just telling ya, yeah something, something doesn't smell right in that kitchen. Why does she still have a mortgage? Why hasn't she paid her mortgage off?"

[00:23:46] Michelle: There you go.

[00:23:46] Sal Savastano: That was another one.

[00:23:47] Michelle: Your brother's, he's good. Like he thinks through these kinds of details. That's the guy you want to be in business with.

[00:23:55] Sal Savastano: I am in business with him. Well, you know, it's easier, it's easier to look at the details when you’re not connected, and that was easy for him.

[00:24:03] Michelle: Exactly.

[00:24:03] Sal Savastano: That's what probably prevented me from really, really analyzing it the way I should have. It's so much harder to look at that when you look at the person and you go, good friend, like, you know, somebody that you look as an ally, as a trustworthy person, like, you know, you'd think, you'd think that that person would give their shirt off their back for you just as you would for them.

[00:24:25] Michelle: Then one day in 2018 the world turns upside-down. And it started as many upside-down days do, with a surprise visit from IRS criminal investigators to Sal's office.

[00:24:41] Sal Savastano: Yeah, that was a terrible day. (chuckle) Um, the secretary came in, she said, "Hey, um, there's some gentlemen here to see you." And I really just thought it was a vendor, and I was so busy, and I just said, "Well, can you just get their card and just tell them that I'll call them, and maybe we can set up an appointment?" And uh, you know, when you see that card, you're like, wow, what is this all about, you know, it, it shakes you a little bit because you're like one, are they asking about me? Did I do something wrong? So, lo and behold, of course, it was about Monique, and you know, so, you know they were very, very nice, incredibly nice people and they're like, "We totally understand, and we really, really thank you for taking the time." And they said, "Okay, well we'd like to ask you some questions." And now, right away my brain says, well wait a minute. I'm invest--, I'm invested with her in her business, and that's when I started to think, well I hope she's not really a criminal, right. Again, thinking maybe she's cooking the books. Maybe she's, you know, maybe she's scamming the banks and now they're going to come after her because they found out she was lying or cheating on some of the things that she did. You know, maybe billing the banks for more than the work that she did. Like this is the thing that kind of comes through my brain. And you know, so I spent like 2½ hours and I was like, wow. I'm like this is, this is crazy. I said, "This is crazy, you know." And again, their questions and answers were more about documentation back and forth, this, that, and the other thing. In fact, they said to me, "You're the very first person we're talking to, because it seems like you, more than anyone, have the most involvement with her back and forth."

[00:26:21] Michelle: Interesting.

[00:26:22] Sal Savastano: So, ding-ding-ding-ding. We have a winner. His name's Sal. Let's go talk to him first.

[00:26:27] Michelle: Oh...

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[00:26:29] Michelle: Sal at this point is still hoping against hope that this is some kind of misunderstanding between Monique and the IRS or some bank, and not between Monique and him who she'd been close friends with now for nearly 20 years. But realization hits hard. And it's tough to fathom. All of those reams of documentation the IRS brought were painstakingly showing Sal what Monique had actually been doing all of these years in all of these projects. She had a few real projects apparently, but they weren't rehabbing homes. They were for hiring people to do things like cut the grass or put up a sign, and banks were not paying her tens of thousands a pop, it was like 25 bucks or 100 here or there. All of Monique's other transactions were fake. Poof. As intangible as the smoke that Sal imagined rising from this mountain of paper representing what Monique's investors believed to be millions upon millions of dollars in projects.

[00:27:35] Sal Savastano: They said, "Where there's smoke, there's fire." I said, "And there's so much smoke in this room, it's a third--, you know, 5-alarm blaze." And you know, they just looked at each other and said, "Well..." and I said, I go, "Can I..." I go, "Is there any way like I can try to like get all my money back from her before you like, you know, like really blow your investigation out and arrest her?" You know, and I was only kidding a little bit, because I really didn't know. And they're like, they looked, they said, "Look, you, you gotta do what you gotta do."

[00:28:00] Michelle: There were no million dollar fixer-uppers. There were no big repainting and repair jobs that Sal had looked over from afar. These were all completely made up in the mind of the irresistibly fun woman with the appetite for fine dining and great shoes. Sal felt like he was under that pile of evidence the Feds had patiently walked him through as he sat in his own office with the sick realization pulling the walls in closer. He could feel Monique's pretty house of cards already starting to burn down.

[00:28:36] Sal Savastano: It never even entered into my mind at all that she was literally lying and scamming and stealing. I thought I knew her that well, that there's no way in hell she would do that. Like I definitely could accept while I was investigating her that maybe she's a bad businesswoman. Thought maybe she would make a bad business decision. Yeah, maybe, that might lead to me potentially losing some money, but I wouldn't lose it all because, again, I looked at it from the perspective of, no, these are guaranteed contracts that banks have, have already and, and again, you remove the part from my brain that allows me to accept she's a lying, scamming person, I couldn't see it. Looking at it now, it's like clear as glass that I should have questioned certain things, but she was very good because she had answers to all of these questions. I mean this woman spent all her time just crafting her scam. It wasn't like she was legit sometimes and then she had a scam on the side that she kind of only worked at it. No, her entire life was a scam. I mean, it was played perfectly.

[00:29:41] Michelle: Also flying through his mind all those questions that his brother, John, did keep bringing up.

[00:29:47] Sal Savastano: When the IRS came, he looked at me, and he goes, "And I'm not e--..." he says, "I'm not even going to say I told you so." I go, "Nope, I'm going to say it. You told me so!"

[00:29:56] Michelle: Sal finds out that the profits he thought he had made over the years were merely funds taken from other investors. This was a huge Ponzi scheme right there in their perfect little town. And he learns that the whole investigation started because the banks became suspicious. Monique had multiple accounts with multiple local banks, something Sal didn't really understand and had actually asked her about before. Something she said was because of the fees some of them would charge which didn't really make sense, but the banks themselves apparently saw all this money constantly coming and going, and it didn't smell right to them either. Sal sat there, the Feds now gone from his office, sat there in disbelief and disgust.

[00:30:42] Kim Savastano: I remember she was going through a tough time, 'cause she would constantly get audited, and I didn't think anything of it.

[00:30:50] Michelle: At home, Sal's wife, Kim, did not yet know the truth about Monique, but she did know being on such close terms with her, that for the last several months Monique seemed not herself. Something had really been bothering her.

[00:31:05] Kim Savastano: Trying to get everything together and I remember that's when we really didn't see each other or, or communicate. She was just so stressed about this audit.

[00:31:16] Michelle: Ooh...

[00:31:17] Kim Savastano: Extremely stressed, and you know, I was just like, you know I, I felt bad. I'm like, "I'm sorry you're going through that." And, you know, "I wish there was something I could do." And she never asked me for anything. She, you know...

[00:31:29] Michelle: And she never indicated like, hey, I may have done some things wrong or anything like that.

[00:31:36] Kim Savastano: No. I do remember this one time, 'cause we had planned with a couple of other friends to go away for um, a weekend. And she's the one who planned it, put it all together, and last minute she backs out, which is not like her. She, she loved to go on vacation, she loved to do all this kind of stuff, and she backed out last minute. And I said, "How come?" And she said, "Oh, this audit, it's killing me."

[00:32:02] Michelle: Okay.

[00:32:03] Kim Savastano: When I got back, she had said, "Can we meet up and grab a bite?" And I said, "Sure." Now I hadn't seen her in a while, and she was so stressed, and practically in tears, and she said, "This audit's killing me." All she kept saying to me was, "Kimmy, I didn't do anything wrong." And I didn't know what she meant by that. And I'm like, "Well Monique," I said, "If whatever you, if you didn't do anything wrong then, and if you have nothing to hide, then you have nothing to worry about," I said. And she just seemed so stressed, but still never confided anything in me that she was not just being audited, she was being investigated by the IRS and you know they had been watching. I had no idea that this was going on.

[00:32:55] Michelle: Right. Right. It's chilling to think that at that time she must have known that the jig was up, like it's all falling apart.

[00:33:06] Kim Savastano: Exactly. And that's why she was so stressed, and I had no idea.

[00:33:10] Michelle: Until Sal had that cataclysmic meeting with the IRS.

[00:32:31] Kim Savastano: I'll never forget the day that he came home and told me, and I was like, "What?" And he was completely shocked and like couldn't believe that this was going on. Everything just started to, to boil up and explode.

[00:33:31] Michelle: What goes through your mind? I mean this is your best friend that you had known for...

[00:33:37] Kim Savastano: Couldn't believe it. I still can't believe some of the time. I really, really can't believe it, that this, that she did this.

[00:33:47] Michelle: They're both stunned, hurt. Sal has one thing to do next and that is confront their dearest friend, Monique. He picks up the phone, and next week, we'll tell you what happened. Just how intricately this was all built and how it all came tumbling down.

(MUSIC SEGUE)

[00:34:13] Michelle: If you or someone you know has been the victim of a fraud or scam, call AARP's free Fraud Watch Network Helpline at 877-908-3360. Their trained fraud specialists can help you know what to do next and how to avoid scams in the future. Thank you to our team of scambusters; Executive Producer, Julie Getz; Producer, Brook Ellis; Associate Producer and Researcher, Megan DeMagnus; our Audio Engineer, Julio Gonzalez; and of course, Fraud Expert, Frank Abagnale. Be sure to find us on Apple Podcasts, Spotify, or wherever you listen to podcasts. For AARP's The Perfect Scam, I'm Michelle Kosinski.

(MUSIC SEGUE)

END OF TRANSCRIPT

 

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