Steve is a popular guy. He edits the local paper. He owns the local stationary store. His new restaurant is the most popular spot for miles around. And he’s just opened up a new pub. The only problem is every one of his businesses seems to be failing. Detective BK gets a tip that there’s something shady is going on with Steve’s accounts and his investors have started to notice. BK uncovers a small town scandal that tests the fabric of neighborly trust.
The Detective: Detective Sergeant BK has worked in law enforcement since 1998. Over the course of his career he worked patrol. He spent seven years as a detective working Major Crimes: murders, rapes, drug crimes, and felony thefts. Three years ago he was promoted to sergeant and is currently the Detective Sergeant at his police agency. BK lives in the city he works in. His wife is a school teacher and they have four children who are currently attending college.Read Transcript
BK: Yeah, this big businessman, editor of the newspaper, fairly big deal in a small pond, and he just was a con artist, really. He groomed adults for money and children for sex.
Yeardley: [00:00:18] Hi, I’m Yeardley. This is Detective Dan.
Dan: [00:00:21] Hey there.
Yeardley: [00:00:22] And his identical twin brother, Detective Dave.
Dave: [00:00:25] Hello.
Yeardley: [00:00:26] And this is Small Town Dicks.
Dave: [00:00:30] You will hear detectives from small towns around the world to discuss their most memorable cases.
Dan: [00:00:34] We cover the intimate details of what went wrong and what went right.
Yeardley: [00:00:38] As these dedicated men and women search for justice and crack the case.
Dan: [00:00:43] Names and certain details have been changed to protect the privacy of the victims and their families.
Dave: [00:00:48] So, please join us in maintaining their anonymity out of respect for what they’ve been through.
In Unison: [00:00:53] Thank you.
Yeardley: [00:00:59] Today, on Small Town Dicks, we have the usual suspects. We have Detective Dave.
Dave: [00:01:07] Hey there.
Yeardley: [00:01:08] (laughs) Hey there. I feel like I caught you walking out the door. And we have Detective Dan.
Dan: [00:01:14] Hello.
Yeardley: [00:01:15] Hello. And we are so pleased to welcome a new guest to the podcast. Please welcome Detective BK.
BK: [00:01:24] Thanks for having me. I’m excited to be here.
Yeardley: [00:01:26] We’re so thrilled to have you. Thank you so much for giving us one of your days off. I know those are precious, few and far between. So, we’re very grateful. So, BK, please tell us how this case came to you.
BK: [00:01:39] This case came to me when a local attorney called me directly and said that she was representing her clients, Janet and Tom, and they had invested almost $200,000 with their friend, Steve, and his wife, Linda in a limited liability corporation to start a high-end fancy Mexican restaurant in town. I was aware of this restaurant living in our town and it was popular from the day it opened its doors, and it opened in 2005. According to George, the general manager of that restaurant, it was making $500,000 just in credit card receipts the first year and then the second year $800,000 in credit card receipts. That doesn’t even count their cash business. This business second year is probably making a million dollars in receipts. Actually, one of our police officers worked there part time as a waitress, just because she was just a social person, she liked the interaction, and it was super popular, happening in place.
This attorney told me that Janet and Tom had invested this money and they purchased shares in this limited liability corporation that owned this restaurant. The restaurant, despite making money apparently started to lose money and nobody knew why. One of the complaints that the attorney told me was that Janet’s signature had been forged on some loans that were made to the restaurant. They had gotten copies of these loan applications, and looked at Janet signature on them. And Janet said, “That’s not my signature.” This attorney actually prior to calling me had hired a handwriting expert. The handwriting expert says, “This signature does not belong to Janet.” However, the people who made the loan, the company that made the loan, were refusing to cooperate with this attorney to take Janet’s name off the loan and said that she was liable for this money, which was over $300,000.
Yeardley: [00:03:42] Is it $300,000 on top of the $200,000 she’s already invested?
BK: [00:03:46] Yes. And it ended up being three different loans. That $300,000 was three different loans in different amounts, but it was approximately $300,000.
Dave: [00:03:56] Same lender?
BK: [00:03:57] Same lender every time, and they were using the credit card receipts from the restaurant in order to guarantee the loan. So, this company would start taking automatic loan payments out of Janet and Tom’s bank account to pay back the loan at a certain percentage. So, I got that phone call in February 2008. A couple weeks later, I get another attorney call me and said he represents a man named Sam. Sam has invested $20,000 in a different limited liability corporation owned and run by Steve, and he has sold Sam $20,000 in shares of a pub that they had just opened. They purchased this pub at the end of 2006 and started this limited liability corporation to fix the pub up and to start it under a new name in early 2007. So, Sam had bought $20,000 worth of shares in this other limited liability corporation. One corporation owns the pub, one owns the restaurant and they’re separate, and they have separate investors.
Yeardley: [00:05:02] Both entities are owned by Steve.
BK: [00:05:04] Correct. This attorney says, “Sam would like to come in and talk to you.” And I said, “Yeah, another attorney’s already reached out to me regarding a different restaurant. I would love to talk to Sam.” Sam comes to the police department and says, “Yeah, the initial investment was $20,000, but I’ve given Steve another $35,000.” He has nothing to show for it, and Steve will not return his calls. Steve has disappeared as a matter of fact, nobody knows where Steve is.
Yeardley: [00:05:30] What’s the connection between Steve and Sam? Were they just friends?
BK: [00:05:36] Just acquaintances within town. I start looking into it. I start preparing subpoenas for what I think is Steve and Linda’s bank accounts for the corporation’s bank accounts, the restaurants bank accounts, and then George comes to the police department. And he asked for me.
Yeardley: [00:05:54] George, the general manager of the Mexican restaurant?
BK: [00:05:57] Yes. He says he’s heard that I’m investigating Steve, for stealing money. I said, “Yes, I am investigating him. What do you want to tell me?” George says, “I used to work at this restaurant in another town, and Steve came to that restaurant all the time, he loved that restaurant, and we became friends. He offered to open this Mexican restaurant, basically, for me to run, because this is the type of food I’m passionate about.”
Yeardley: [00:06:28] This is George saying this?
BK: [00:06:29] Yes. “This is what I’ve always wanted to do, and I invested $9500 into this, and I would get 20% of the company, and I would run the restaurant.”
Yeardley: [00:06:40] For $9500, 20%?
BK: [00:06:43] That’s what he got. This is the same restaurant that Janet and Tom also already have $200,000 into. I don’t know how much they think they own, but it became less and less, because every time you issue another share, you dilute the shares that exist already. and that became a theme with Steve. Steve was constantly looking for new investors to fleece, and he had plenty of them. People wanted to give them their money. Sam knew that there were other investors in this pub, and in that corporation that owned the pub, and there were seven others that owned shares in that pub to the tune of, I think, it was $160,000, he had sold these seven people these shares.
Yeardley: [00:07:28] Wow. And these people are just people from your little community like Sam was?
BK: [00:07:33] Right, just friends or acquaintances of Steve’s. What they didn’t know was there was a man named Paul. Paul was asked to invest in this corporation that owned the pub as well. He went to his wife and said, “I want to invest $45,000 with Steve to be a part of this pub, because everything he touches turns to gold.” His wife said, “You’re not investing with Steve.” For some reason, she just did not like Steve, she did not trust him, and she was basically the only person that ever did not trust Steve.
[00:08:08] Paul would later invest $80,000 with Steve. When I say invest, I mean just give it to him. He was written these bogus shares. Steve and Linda owned a stationery business as well, that was profitable. It made six figures a year. It was the only one in town, I think that’s why it was popular, they would make copies and stuff. It’s kind of like a Kinko’s. Steve had access to these forms that he called shares. It was a preprinted form, and he just fill in the blanks. And he handed those out like they were exactly what they were, paper. Steve wrote so many of these out that they started to become worthless. I would later find out, because I’m not a securities and exchange investigator, that this was completely illegal, and it should have been investigated by the DOJ.
Yeardley: [00:08:57] It’s illegal to hand out so many shares, to split so many shares?
BK: [00:09:03] Yes.
Yeardley: [00:09:04] How is that true? Are you allowed to, say– you could have 100 people who have a meagre interest in the company, no?
BK: [00:09:12] You can issue the shares. But once you’ve issued those shares, you cannot continue to issue shares without shareholders knowing that you’re issuing new shares and everybody vote on it, because you are diluting their share without their knowledge.
Dave: [00:09:27] And you’re a fiduciary, you’re responsible for their investment.
BK: [00:09:31] Correct.
Yeardley: [00:09:32] Oh, I see. Okay. Steve is doing shady shit by not telling any of the other investors in all these various businesses, that he’s making their investment less valuable by basically dividing up their pieces of the pie without telling them they’re going to get less pie. So, Steve is double dipping.
BK: [00:09:54] Yes. So, I have this case. I have this forgery case. I have Steve issuing shares of multiple businesses, and he’s stealing hundreds of thousands of dollars from what I see initially. I call the DA, and I say, “I think I have a racketeering case here.” A racketeering case basically is where you take multiple business entities, and you use it to commit fraud and theft and forgery. You have to have multiple different crimes, multiple different business entities, and you have to be defrauding somebody of their money, and that becomes racketeering. I was very excited about this racketeering case. The DA says, “That’s very complicated to prove. Why don’t you just work on proving forgery and identity theft, and maybe aggravated theft?” I got off the phone, and I said to myself, “We’re going to investigate racketeering, and then we’ll just give it to the DA and see what they do about it.”
Yeardley: [00:10:52] (chuckles) Good for you.
Dan: [00:10:55] This is just too big of a case for you to just let go of.
BK: [00:10:58] Yeah.
Yeardley: [00:10:58] And also too blatant.
BK: [00:11:00] Too blatant, and Steve was so bold about it. So, I requested 46 subpoenas for bank accounts in all the names I could think of for Steve and Linda, and their businesses. Every business they owned, they had put under a limited liability corporation to protect themselves. I’ve requested those subpoenas, got those subpoenas. But Steve has disappeared.
Dave: [00:11:21] With Linda?
BK: [00:11:22] With Linda. I learn that they’re actually living in a big city in another state. So, with financial subpoenas, you have to serve the person with it before you serve their financial institution, which can be a complete pain in the ass if they’re trying to hide from you. But I learn that Steve, the reason he’s disappeared– because he used to be the editor of the newspaper in our town as well. He was the editor of our newspaper until January 2008. I took this investigation over in February 2008. I learned that the reason he’s no longer the editor, is they’ve let him go because he’s been indicted for child sex abuse.
Yeardley: [00:12:00] Holy shit!
BK: [00:12:01] For rape 2, sodomy 2, and sex abuse 2, I think, up in another county in our state. And I find that he’s going to be arraigned up in that county on a particular day. So, I asked for permission to drive four hours away and I go to the court, and I wait in the waiting room after his arraignment. He comes out and we know each other. My ex-wife used to work for the newspaper. So, I’ve met him many times.
Dan: [00:12:31] So, a small town.
BK: [00:12:32] It’s Small Town stuff.
Dave: [00:12:33] When Steve walks out and sees you there, is he, “Hey, what are you doing here? You got a case going?” Or, does he have the inkling like, “He’s here for me?”
BK: [00:12:42] So, he didn’t see me initially. There’s a lot of people in the lobby, and I call it out to him, “Steve.” He looks over. He’s like, “Oh, hey.” He didn’t realize what was up.
Dan: [00:12:53] There’s a friendly face.
BK: [00:12:54] Exactly, familiar face at least. I said, “Hey, I need to serve you with the subpoenas.” He said, “What’s this about?” And you have to read every one. (laughs)
Dan: [00:13:04] 46 of them?
BK: [00:13:06] I said, “Well, let me read them to you. It might be clear to you what this is about.” So, I read all of them, and I can see the demeanor on him changing. Steve has become– he’s almost confused about what I’m doing.
Yeardley: [00:13:21] Hang on, BK. Are you literally saying you have to read every one to him?
BK: [00:13:26] Yes.
Yeardley: [00:13:27] As he stands in the lobby?
BK: [00:13:29] Yes.
Yeardley: [00:13:29] Oh, my God!
BK: [00:13:31] I read them as fast as I could. I don’t know if you could understand what I was saying, but I was reading really fast. He gets a copy of every one. So, it didn’t really matter. I read them all, and I had the subpoenas to him. I said, “Can I ask you some questions?” He’s like, “No, I’m not going to answer any questions. I don’t even understand what this is about.” I said, “This is about you stealing from all your partners, and all the people invested in your companies.” And he said, “That was just bad business, that wasn’t theft.” And I said, “I disagree with you 100%. This looks like theft to me and that’s what I’m investigating.” And with that, he didn’t have any more to say to me and I walked away and I drove back to my town.
[00:14:27] So, I get the subpoenas, and it was a lot of paper, and I served him on 11 different banks and on two accountants. He had two accountants and he had 11 banks that responded to these because I didn’t know where he banked, so I served them all.
Dave: [00:14:41] So, fishing expedition.
BK: [00:14:43] It was.
Yeardley: [00:14:44] You can’t have had 11 banks in your tiny town.
BK: [00:14:47] Yes, we do. I don’t know that we do today, but back in the day, we had 11 banks.
Yeardley: [00:14:52] Like 11 separate banks, not just multiple branches of the same, like Bank of America?
BK: [00:14:58] Every bank had only one branch in town. The town’s not big enough to have more than one branch. So, I get all that paperwork. Then, I learn that Steve has left a bunch of documents, boxes of documents in his stationery place. He has closed his stores because they no longer making payroll, could not buy supplies. So, they end up closing their doors. But I learn from the landlord, he tells me, there’s boxes of financial documents in this business. So, I write a search warrant, and I seize these six paper boxes. I go through all of them, and they’re worthless, I was so mad, such a waste of my time.
Dan: [00:15:42] It takes forever, and it’s not fun reading. It’s not a page turner.
BK: [00:15:46] No, it’s boring. It’s like (unintelligible)boring. And from the time I got this case, in February of 2008, I did not actually turn it into the DA until December 2008. And because Steve was the editor of the newspaper, and everybody knew him, my chief was very interested in this case, because I estimate that he stole over $2 million from his investors and from the businesses. When the pub opened, Steve decided he was going to be the manager with his father-in-law. They were going to run it together. That gave Steve access to the cash that’s coming into this place. The pub was turning a profit when they bought it.
[00:16:29] Within six months, it’s no longer turning a profit. The investors can’t figure out why it’s no longer making a profit, and they’re losing money. Two of them decide they’re going to sue Steve, and get their money back, and they successfully do that. They’re the only victims that actually got their money back. No one else got their money back.
Dave: [00:16:48] Because they were early to the party.
BK: [00:16:50] They were early to the party. They got it while there was still money to get. The interesting thing about that was Steve actually asked other investors to buy more shares so he could pay them off.
Dan: [00:17:03] Rob Peter to pay Paul.
BK: [00:17:04] Yeah, he didn’t have the money to pay them. So, he stole more money to pay them.
Yeardley: [00:17:11] Steve didn’t have the money to pay the people who were suing him, so he stole more money to pay the people who are suing him.
BK: [00:17:17] Correct. So, then I talked to his accountant, his main accountant, and it’s an accounting firm. This accounting firm is the biggest one in our town, and it probably has somewhere between 20 and 30 accountants working for it. The main accountant, the owner of the company, works on Steve’s case because Steve’s a big deal in town. They work on his accounts, and he’s assigned another accountant to help them. So, I go to talk to this accountant, and he said, “Well, I talked to Steve about the pub losing money and why it was losing money, and Steve didn’t have an answer for that.” So, the accountant said, “I suggested to him that someone is stealing the cash. From the time that comes into the restaurant, to the time it makes the bank, somebody is siphoning off money.” Steve dismisses that immediately. He said, “That cannot be happening.” He would know about it if it were happening. Well, he did know about it. He was the one doing it.
[00:18:17] Oh, and the investors initially the two that were investing in the pub that wanted out, one of their complaints was the deal was any of the investors can look at the bank account whenever they wanted to see what was happening with their money. But within three months, Steve has removed all access to the bank accounts, Steve won’t let anybody else look at the financial records, they have to take his word for it. And that’s what makes them super uncomfortable and that’s why they went out, because it’s a breach of contract.
[00:18:48] So, the same thing happens with the Mexican restaurant. George, one of the things he told me was, “Part of the deal as the manager of the restaurant is I handle the financials. When these loans came in, I asked Steve why we were getting loans, we didn’t need the loans.” And he said, “Well, I want to make some improvements to the pub.” And George didn’t realize that was also illegal, that you can’t take money from one of your businesses and move it over to another business if they’re not owned by the same entity. You’re basically stealing from one company and putting it into another company. So, George complained that they got these loans and now the money was coming out of their bank account and they were having to make these loan payments, for not even George’s restaurant. George’s like, “That money never got invested in my restaurant, but my restaurant was paying the bills on it.”
Yeardley: [00:19:42] I see. Steve took out loans against the Mexican restaurant to pay for improvements on the pub?
BK: [00:19:49] So he said. Steve never made those improvements to the pub. He told George that so he can move the money out without George complaining or becoming suspicious about where the money went. You have to remember, that’s $300,000. I asked George, “What do you think Steve’s doing with all this money?” And he said, “I don’t know. He takes a lot of trips to Mexico. He has a kid that goes to a university, that’s expensive. They bought a new house. I think he’s paying his mortgage with some of this money. I think he has a cocaine and stripper problem. And his wife has a bad spending habit.” Steve and Linda are basically spending the money that should be financing three businesses, the pub, the stationery place, and the Mexican restaurant. And now all three of those are failing.
Dave: [00:20:40] They got used to a certain lifestyle and needed a way to finance that.
BK: [00:20:44] I think so. Initially, when I learned that he was indicted for the sex crimes, I thought maybe he was paying for his attorney’s fees, but he wasn’t arrested for that until after all this happened. So, I started going through the financial records once I got them back from the banks. I could see where money was moved from one account and put in another account. And then, it would be wired out and disappear. And I saw checks, I think, were in arrears on their mortgage, because I saw one mortgage payment for over $12,000. They didn’t own a million-dollar home, they owned like a $400,000 home. So, that’s not a $12,000 payment, even if you finance every dollar of that. So, I think they must have been living poorly financially, and the only way to make up for that was to steal the money from these very profitable businesses. You have to remember that Steve also worked for the newspaper, and he made like $65,000 annually at that job. So, that’s other money that he’s spending as well.
Yeardley: [00:21:48] Did Linda work?
BK: Linda ran the stationery place. I don’t know what else she did. She wasn’t there very often, because Steve ended up hiring a lady named Mary. He hired her from the newspaper. She worked for him at the newspaper, and he asked her to come work at the stationery place and be the manager of that place. She’s not there very long when these loans that were forged. She’s asked to sign Janet’s name to these loans, and she says, “Won’t I get in trouble for that? Isn’t that illegal?” And he assured her that, “Janet meant to sign these loan papers before she left, but we didn’t have everything put together in time she had to leave town. So, we need you to sign up, Mary. I’ll be the witness to the signature that you’re forging. And if anything comes back on us,” Steve said, “I’ll take the fall.”
Yeardley: [00:22:41] Steve and Linda are making these assurances to Mary that nothing will happen to you for signing Janet’s name?
BK: [00:22:48] She won’t get in trouble. Exactly.
Yeardley: [00:22:51] And these were the forged signatures that were brought to you by Tom and Janet’s lawyer, when you first got wind of this case?
BK: [00:22:57] Correct.
Yeardley: [00:22:58] Why did this stationery store go belly up, just because they were skimming so much money?
BK: [00:23:03] Yes. The reason that all of it went up. Steve was stealing cash from all of it. He made sure that Mary didn’t have access to the bank from day one, and she was all trusting of him. Then, when George started questioning, he lost ability to see the financials of his business.
Yeardley: [00:23:21] Just to be clear, this Mexican restaurant started to lose money after two years?
BK: [00:23:26] Correct. And then, for the pub, Steve gave initial access to the financials to the seven shareholders and took that away within months because day one, he was stealing from that company. The Mexican restaurant and the stationers, he wasn’t originally stealing from them. I think what happens to people in his situation is, I’m guessing here, they steal a little thinking they’ll pay it back. That money goes away, so they steal some more, and then it just becomes habit, and it becomes easy to do.
Dave: [00:23:57] Like opening credit cards to pay for your other credit card balances.
BK: [00:23:59] Yeah, that’s how people get in credit card trouble.
BK: [00:24:16] The attorney for Mary, and I don’t know how he pulled this off, but he’s also Janet and Tom’s attorney. Seems like a conflict of interest a little bit, but he tells Mary to come in and talk to me. He thinks she’s going to be a good witness for this forgery. I don’t know if he’s aware that Mary actually did the forgery herself. But he tells her to come in and talk to me. And she’s crying, she is terrified, she’s sick to her stomach. She’s also been loaning the stationery business money because she believed in it. She believed in Steve, she believed in the business. She said it was making money when she started there. And now, they couldn’t keep supplies there and because they had no supplies, they started losing their customer base, and it just started unraveling. Mary said, “I was never allowed to look at the bank account. All I was ever allowed to do is make deposits, I was not allowed to make withdrawals, only deposits. And I deposit plenty of money. It was there. I just don’t know why we weren’t making our bills.”
[00:25:19] That was a consistent theme with all of them. They all stopped making payroll with the pub, they never made payroll. They never paid their bills, ever. From once Steve took over, they never ever were fluid at any point. I talk to the main accountant again. I ask him, I said, “Do you think Steve is stealing the money?” And this accountant says, “I don’t think so. I think he’s just a bad businessman.” And I said, “He’s a really bad businessman. If he’s not stealing the money, somebody is stealing the money. I’m not an accountant, I can look at these financial records, and I can see that there is plenty of money coming in and it’s just disappearing through these wire transfers. And Steve’s writing himself checks that go into his personal account. And then, that money disappears, paying for his own lifestyle through his own accounts. I can see it, why can’t you?” And he said, “Honestly, I’ve known Steve a long time. He’s just not that type of person.” So, I asked to speak to the other accountant that works on his books.
Dave: [00:26:24] You wanted a second opinion?
BK: [00:26:26] I did. Somebody who didn’t love Steve and who didn’t think he was a great guy. I asked her, and she said, “I actually went to my boss and said, ‘something is wrong here. Something illegal is wrong here. At the very minimal, it’s unethical.’” Every day, Steve moved money between so many accounts, it was impossible for her as an accountant to keep track of the money.” She said, “I can’t even tell you where this money was going. Steve moved it so much.” And he did that on purpose, you have to be doing that on purpose if you’re going to hide hundreds of thousands of dollars.
Dan: [00:27:01] It’s like three-card Monte.
BK: [00:27:02] It’s exactly what it is.
Dave: [00:27:04] That’s a good analogy.
Dan: [00:27:06] Yeah. Where were you on that, Dave?
Dave: [00:27:08] I was going to say it’s a shell game. How deep into this were you when you went to the district attorney, and they wanted to give them the light end of theft and fraud and forgery?
BK: [00:27:21] It was after I talked to George, so a month end. It was a month end and I said, “This is going to be big, we’re talking hundreds of thousands of dollars.” I didn’t know we would get to millions of dollars.
Dave: [00:27:33] It sounds like George is the only one who had the foresight to get visibility into financials. And then, they have these two years of incredible success. Everything’s going well. Steve knows that he’s pulling money away from all these investors and says, in these other LLCs, “I’m not going to give people the visibility that George has.”
BK: [00:27:54] Right. But George loses visibility too. Because Steve is moving so much money out of the account, he removes George from the account.
Dave: [00:28:03] Because he’s asking questions.
BK: [00:28:04] He’s asking questions, doesn’t understand where money’s going. Steve no longer wants to have to explain this money disappearing and leaving the accounts.
Dave: [00:28:14] What’s the background on Steve? Is he born and raised in your town? Is he somebody who moved to the town and was instantly successful in investing in businesses, what’s his background?
BK: [00:28:25] Steve, how the sex crimes charges came about was he was in another county, obviously, about four hours from us, and he was an English teacher at a private high school. He basically violated the trust of a student and developed improper relationship with a minor. She eventually came forward, and that’s where those charges came from. He left that job, came to our town to be the editor of the newspaper. He got to know everybody in town because he’s the editor of the newspaper. He talks to city officials, he talks to businesses all the time. Once Steve opened that Mexican restaurant up, and it was so successful, when it was here, it was the most successful restaurant we had in our town at the time.
Dave: [00:29:15] And that’s why there’s this perception that whatever Steve touches turns to gold?
BK: [00:29:19] Yeah, and he takes all the credit for it. The stationery place is successful when Steve and Linda buy it, and it remains successful for a couple of years.
Dave: [00:29:28] It’s an interesting crossover, the sex offense, what we know about sex offenders, they groom everybody around them. And in this case, he’s a sex offender. And on top of that, he’s into financial crimes, but the grooming is the same. You’re trying to get people to trust you with their child. You’re getting people to trust you with their money, that there’s a lot to lose on both ends. Certainly, the person crime is a bigger deal, but he’s still grooming and that’s a personality thing, that is thieves and sex offenders. They’re really good at lying to people.
Yeardley: [00:30:03] Fascinating correlation. BK, did the newspaper know that Steve had been accused and/or convicted at that point of the sex offense?
BK: [00:30:14] That’s why he was terminated from his position. When he got indicted, they terminated his employment.
Yeardley: [00:30:19] So, he got the job at the newspaper before he was indicted?
BK: [00:30:23] Yes, he had worked there since 2003. So, he had been there almost five years before he was indicted.
Dave: [00:30:31] It sounds like sex abuse victim comes forward years later when she’s ready to talk.
BK: [00:30:35] Right. Yeah, this crime is old. It’s an old crime, and she came forward later. Actually, during my 10-month investigation into this racketeering and forgery and identity theft and aggravated theft, he pleads guilty to several sex crimes and goes to prison.
Yeardley: [00:30:54] Steve does?
BK: [00:30:55] Steve does. My boss, the chief of police, like I said, he knew Steve, and he would come into my office weekly, sometimes a couple times a week, and inquire on how the investigation was going because he was very interested in Steve being arrested and charged, and he was very excited about the case. He would always say, “How’s the investigation going?” And he wouldn’t have to say which one, I knew what he was talking about, because my desk– I have pictures of me those days with my desk, buried in reams of paper. I got so tired of him coming in– I mean, I appreciated that he took interest in my work, but I got so tired of coming in that when he would come in and say, “How’s the investigation going?” I would say, “An arrest is imminent.” He’d say, “Really?” I’m like, “No.”
BK: [00:31:44] And then finally, when I was ready to present the case to the DA, I went to his office, I said, “I’m presenting the case to the DA.” And he said, “Are you going to arrest him?” I said, “He’s already in prison.” He was so upset. He’s like, “I can’t believe he’s in prison.” I said, “Yeah, he’s already in prison.”
Yeardley: [00:32:02] Wow. Still in prison on the sex crimes charges?
BK: [00:32:05] Yes.
Yeardley: [00:32:06] So, did your chief of police like Steve before he knew of these financial crimes? Or did he never like Steve?
BK: [00:32:13] I don’t think he felt one way or another about Steve.
Yeardley: [00:32:16] Oh, he just knew him, and he was intrigued?
BK: [00:32:16] Yeah, this big businessman, editor of the newspaper, fairly big deal in a small pond, and he just was con artist, really. That was a good way of putting it, he groomed adults for money and children for sex. I turn this case over to the DA. I can prove they Steve directly stole about $824,000, directly from his investors, he stole that money. What I couldn’t prove was how much in cash he was stealing from the businesses, which based on how much the Mexican restaurant alone was making, I estimate to be hundreds of thousands of dollars as well, because the only way you’re going to bankrupt something so successful is steal all of its money.
[00:33:06] One time, he took out some money– when George was at the bank with him, he took out $19,000 I think it was. And George said, “Why are you taking that money out of the account?” He said, “Because that loan company is going to take its automatic payment, and then we’re not going to have this cash on hand for the restaurant.” And then, George said, “That was all a lie because Steve took that $19,000 and it never came back to the restaurant.”
Dan: [00:33:32] How insulting too. It’s like pouring salt in the wound. “I’m going to steal this money, and you’re going to watch me do it. And you’re not going to say anything about it.”
BK: [00:33:40] Yeah. And it’s the funny thing, is only two investors from the pub, the ones who got their money back, were the only ones that confronted him. When they started confronting him, he broke all contact with them. And then, they threatened to sue him, so he paid him off, and it was early in the game. So, he was, “I have to get rid of these people and I’ll get more people.” And he did, he got Paul to give him $80,000, just give him $80,000. Paul thought he is investing money, but he wasn’t, he was giving it away.
Yeardley: [00:34:10] Did Paul do that behind his wife’s back because she said, “I don’t want you to invest with Steve”?
BK: [00:34:15] What happened was, she went on an extended trip, she was gone for weeks, and Paul couldn’t wait to call Steve and say, “Hey, I’m ready to invest with you,” because his wife was out of town. He gave Steve cash out of their bank account. Paul took out a loan and gave him another $20,000 from that loan. So, I find out about Paul that he’s an investor. I see his name on some of these documents and I call and he refuses to talk to me. His wife says, “He’s not going to talk to you. He’s too embarrassed.” And I said, “What is he embarrassed about?” She tells me how he went behind her back and gave Steve the money.
Yeardley: [00:34:53] Wow!
BK: [00:34:54] It’s crazy.
Dan: [00:34:55] Yeah. And the one thing you want Paul to understand is, “Hey, man, you’re not the only guy. You’re not the only person that got the wool pulled over their eyes. A lot of people did. This isn’t an indictment on your intelligence level or you being super naïve.”
BK: [00:35:10] I’m sure his wife already laid into his intelligence level.
Dan: [00:35:14] But you’re a victim in this, keep that in mind. It’s not your fault. It is your fault. It’s not your fault.
Yeardley: [00:35:20] (laughs)
BK: [00:35:21] Well, I did list them as a victim in the indictment. Paul and his wife were listed in the indictment as victims, and also something else that Steve had done was– Janet was Linda’s best friend in college, and that’s the first person who invested money with them. And then, Tom was Steve’s best friend in college. So, he’s an original investor as well, in this Mexican restaurant, and they think it’s great. They’re so happy to do it. And they know it’s a popular place. When they come into town, they wine and dine them at the Mexican restaurant.
Dan: [00:35:54] And they’re telling people, “Yeah, we own a restaurant. We own part of a restaurant, and it’s the best restaurant in town.”
BK: [00:35:59] Mm-hmm. Originally, the question came where are Steve and Linda from. Steve and Linda are from another state, very near our state, that’s where they met. That’s where Tom and Janet do live. Tom and Janet are actually the only out-of-state investors. Everybody else lives in our community.
Dave: [00:36:15] Did you ever confront Linda with all this?
BK: [00:36:18] Well, Steve was in prison, Linda would not talk to me. Steve had told her not to talk to me. So, she wouldn’t talk to me.
BK: [00:36:37] So, I turn the case over to the DA, and I don’t hear anything for months. I don’t know what’s going on with the case. Finally, the deputy DA that’s been assigned the case calls me and says, “I just read your book.”
Yeardley: [00:36:51] (chuckles) Referring to the mountain of evidence you put together against Steve.
BK: [00:36:55] Exactly. I said, “Yeah, it’s quite the story.” She said, “Why did you do this?” I said, “What do you mean why did I do this?” She said, “This case is so big, you could have called our state’s Department of Justice and they would have taken this case over for you. At minimum, they would have given you a forensic accountant.” I said, “Well, I called your office and I talked to a senior DA, who told me that they weren’t interested in any of this other than the forgery and identity theft part of it. And I did it on my own because I was told not to do it by your office, so I did it anyway.” And she’s like, “Well, you did a really good job and we’re going to go to grand jury on all these charges.”
[00:37:44] The charges, I believe there were 10 counts of identity theft. There were 10 counts of aggravated theft. There was one count of racketeering. There were six counts of forgery against Steve. Linda was charged with aggravated theft, identity theft, and forgery. Both of them were also charged with conspiracy to commit those crimes. Mary was charged with three counts of forgery and that’s it.
Dave: [00:38:17] For the three loans?
BK: [00:38:18] For the three loans that she signed off on.
Yeardley: [00:38:20] That she signed Janet’s name on.
BK: [00:38:22] Yes, she got probation that did not take her to jail. She never did a day in jail, she only got probation.
Yeardley: [00:38:29] Do forgery and identity theft piggyback onto each other?
BK: [00:38:33] Pretty much.
Dave: [00:38:35] So, like making counterfeit bills, that’s also forgery. That might be a time where you don’t see identity theft on top of a forgery, but definitely they are cousins. Where one is, the other one is usually right nearby.
BK: [00:38:48] I didn’t mention this before, but there were two Visa accounts in Janet’s name.
Yeardley: [00:38:54] Like credit card?
BK: [00:38:54] Visa credit cards in Janet’s name. The credit lines on those were $18,000 and $15,000 and they were maxed out. There was no money to recover, it was all gone.
Dan: [00:39:07] Were able to tie any of these purchases to things that were, say, in Steve and Linda’s house?
Dave: [00:39:14] Luxury items, a car, a boat, an RV, furniture?
BK: [00:39:18] They didn’t have a house anymore. They had sold it and moved out of state. So, I couldn’t even write a search warrant for a house.
Dan: [00:39:24] And you wonder if they’re thinking, “Well, we’ll just leave and then people just forget about it.”
BK: [00:39:29] That’s what I believe happened. That’s why Steve was shocked that I showed up at court that day to issue those subpoenas. That was the only time I ever spoke to either one of them.
Yeardley: [00:39:39] How much time did he get when he was indicted?
BK: [00:39:41] You’re going to be upset.
Yeardley: [00:39:42] Oh, no!
BK: [00:39:44] So, he got two sentences of 36 months, so three years to run concurrently to each other. However, they were to run after his prison time for the sex crimes. After he got done doing his time for the sex crimes, he had to do the three years.
Yeardley: [00:40:02] And how much did he get for the sex crimes?
BK: [00:40:03] It was six or seven years. He was going to end up being in prison for 10 years. He’s probably out by now.
Yeardley: [00:40:10] How did Steve’s victims feel about him only getting three years?
BK: [00:40:13] I don’t think one victim ever asked me how much time we get. We never went to trial. Steve took a plea deal for the three years to run after his prison time for the sex crimes, so that Linda would get only probation. She never did a day in jail because they had a child in college and they also had a 16-year-old at home. So, they wanted to make sure that Linda was able to stay home with their child at home still.
Yeardley: [00:40:41] I’m curious about these deals that are cut, like, “I’ll take the whole hit to spare my cohort, my partner in crime,” when the partner in crime is every bit as culpable.
BK: [00:40:55] Yeah, I think she is culpable. But also, she’s probably under that Steve influence that he wields against everybody it seems like.
Yeardley: [00:41:05] Also being groomed.
BK: [00:41:06] Also being groomed. She’s probably his biggest victim.
Yeardley: [00:41:09] Fair point. As I listen to you tell this story, BK, I’m thinking of all of the violent crimes, like physically violent crimes we’ve covered on this podcast, from murder, to sexual assault, to everything in between. This case, while there’s no physical violence in the case that you were investigating, the sex abuse case notwithstanding, it gets me in my guts as much as the others. There’s something so offensive to me about people taking things from you, where you have generously given and then they take advantage of your good nature.
Dave: [00:41:51] It’s the ultimate betrayal.
Yeardley: [00:41:53] It is, that’s it. It’s such a betrayal. It’s one of the worst aspects of human nature, if that is the thing that lives inside of you.
Dan: [00:42:01] And it doesn’t even take into account when a person does this to another person. What they say is that your hard work and everything that you’ve done, in an honest and right way, is meaningless to me. Your time and effort you spent accumulating those dollars, so that you would have a good life for you and your family, I’m going to take that from you because my needs and my family are more important than yours.
Yeardley: [00:42:26] It’s such a breach of trust and respect and generosity and all of the things.
BK: [00:42:34] It is. I went to Steve’s sentencing. He was still in custody. He was in jail clothes when he was in court. We have a closed-circuit TV now. They’re arraigned through closed-circuit TV, this was before that so he had to actually be in court in his jail clothes.
Dan: [00:42:52] Was the newspaper there?
BK: [00:42:54] No, I don’t think they were. I think I was the only other person in the room. And he wouldn’t look at me, wouldn’t make eye contact with me. All Steve said was, “Yes, Your Honor,” when asked if he agreed to the sentencing. No remorse, you wouldn’t expect any from somebody like that.
Dave: [00:43:11] No, narcissist. Truly.
Yeardley: [00:43:14] Before we let you go, BK. Can I ask you a couple of questions about you?
BK: [00:43:19] Sure.
Yeardley: [00:43:20] One of the things we often ask our detectives who come on the podcast is in this job that you’ve been doing now since 1998 and it’s 2021. So, that’s how many years, 23?
BK: [00:43:31] 23.
Yeardley: [00:43:32] If your job is every time you leave the house, pretty much the person you run into is going to be having one of their worst days, how has that changed you over those 23 years?
BK: [00:43:43] That’s so difficult, because I don’t know who I would be if I hadn’t done this. None of us are the same people we were 20 years ago. I would definitely say I don’t trust people as much as I probably did back then. Definitely, I’m much more cynical, but I still like to laugh and I like to have a good time. Part of that is, yeah, I get to see the serious part of life all the time. I have a great partner. We like the same thing. She was a first responder for 10 years, so she gets the first responder life and she understands when I have to go. It’s pretty great. I think I became really good at compartmentalizing my life, like that’s work life and this is me life.
Yeardley: [00:44:28] It’s interesting that all of the detectives say, “Well, I just I put it in a little box. Just put it in a little compartment.”
BK: [00:44:35] You have to or it’ll eat you up.
Yeardley: [00:44:37] Can I ask you what made you want to become a cop?
BK: [00:44:41] I was in banking before this. I worked at a bank for six years. And I played rugby, I played semi-pro rugby at the time and that’s how I got my adrenaline out. And then, I got hurt playing rugby and I couldn’t play, and I was really bummed out and I realized I had a really boring job at that point. It afforded me to be able to play rugby and get the crap beat out of me every weekend, so I could go back and be at work and not have to be physical. But then, the person I was with at the time said, “You know what? You should become a firefighter or a cop. It’ll allow you to help people and you like adrenaline.” And I never thought about it, but I might be pretty good at that. So, I became a cop, and she’s like, “I really wanted you to be a firefighter.”
[00:45:27] Now that I’m in it, after I got into it, and I have this aptitude– I feel like I have an aptitude, especially for the interview and interrogation stuff. I can’t believe I would do anything else. I wish I had found it earlier just because I’d be younger, when I’m done with it. You get to help people, you get to make a difference, and it’s just a difference in your little world. You’re not changing the world or anything, but you’re making a difference to people. There’s young adults that come up to me who are in their 30s, and they’re like, “You changed my trajectory. I was doing stupid shit and instead of being an asshole cop, you actually talked to me like I was a human being, like you cared. And that means a lot to me.”
Yeardley: [00:46:07] It’s like the butterfly effect. You had this interaction with this person, just being you, being a decent, upstanding, lovely human, treated this guy with respect. It made a huge impression on him, and actually changed his trajectory. It all happen because you’re just being you and somebody else reaps the benefit from that. That’s pretty awesome.
BK: [00:46:31] Thank you.
Yeardley: [00:46:32] Well, BK, thank you so much for joining us today for bringing us that case, for spending your rare day off with us.
BK: [00:46:39] Absolutely. My pleasure. I’ll do it again.
Dan: [00:46:41] Thank you.
Dave: [00:46:42] Bonsoir.
Yeardley: [00:46:43] Oh, fancy, bonsoir.
Yeardley: [00:46:55] Small Town Dicks is produced by Gary Scott and Yeardley Smith, and co-produced by Detectives Dan and Dave. This episode was edited by Soren Begin, Gary Scott, and me, Yeardley Smith. Our associate producers are Erin Gaynor, the Real Nick Smitty, and Alec Cowan. Our music is composed by John Forest. Our editors extraordinaire are Logan Heftel and Soren Begin. Our books are cooked and cats wrangled by Ben Cornwell.
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