WEBVTT 00:00:00.000 --> 00:00:01.000 Hey there. It's Shumita here. Before we get into today's episode, I have a quick favor to ask you. If you love this show, please subscribe to us on "Apple Podcasts," and rate and review us. It helps other people find the show and it helps us know what you're liking and wanna hear more of. Thank you, thank you, thank you. On with the show. 00:00:01.000 --> 00:00:02.000 [MUSIC FADES IN] 00:00:02.000 --> 00:00:03.000 This is "In Conversation" from Apple News. I'm Shumita Basu. Today, how two newspapers came together to finish the work of a slain journalist. 00:00:03.000 --> 00:00:04.000 [MUSIC FADES OUT] 00:00:04.000 --> 00:00:05.000 [PENSIVE MUSIC] 00:00:05.000 --> 00:00:06.000 On September 3rd of 2022, investigative reporter Jeff German was found stabbed to death outside of his home in suburban Las Vegas. 00:00:06.000 --> 00:00:07.000 Jeff had been a local journalist for decades. He had a reputation for holding the powerful to account, breaking big stories on everything from organized crime to political scandals, and had been with the "Las Vegas Review-Journal" since 2010. He hosted a podcast for them a few years ago, called "Mobbed Up." 00:00:07.000 --> 00:00:08.000 [START MOBBED UP ARCHIVAL CLIP] 00:00:08.000 --> 00:00:09.000 [PHONE RINGING] 00:00:09.000 --> 00:00:10.000 History tells us that anytime you take on the mafia, whether you're a politician like List, a law enforcement official, or a journalist, it comes with risks. List learned that firsthand … 00:00:10.000 --> 00:00:11.000 [RINGING FADES OUT] 00:00:11.000 --> 00:00:12.000 [END MOBBED UP ARCHIVAL CLIP] 00:00:12.000 --> 00:00:13.000 In the year before he was killed, Jeff had published several stories about a local elected official, Robert Telles, a Democrat, exposing multiple scandals in his office. Telles was openly upset by the reporting; he used to tweet about it, angrily. And he ended up losing his reelection bid last summer. Days after Jeff was killed, Telles was arrested and charged with his murder. Police say they found multiple pieces of evidence connecting Telles to the crime. He maintains his innocence. 00:00:13.000 --> 00:00:14.000 When a journalist is killed, especially for doing their work, it sends a chill across the whole industry. This one felt so grim. And many newsrooms reached out to the "Review-Journal" with condolences. But "The Washington Post" made an unusual offer. 00:00:14.000 --> 00:00:15.000 One of the editors at "The Washington Post" had reached out asking, "What can we do? We have resources. We can help." 00:00:15.000 --> 00:00:16.000 That's "Post" reporter Lizzie Johnson. The paper was offering reporting resources, to help finish the work that was still sitting on Jeff's desk. 00:00:16.000 --> 00:00:17.000 That's when I got the call from my editor asking if I would be willing to step up and do that. 00:00:17.000 --> 00:00:18.000 The story Lizzie got assigned to pick up ended up being a huge investigation into an alleged half-a-billion-dollar Ponzi scheme targeting Mormons. We'll get more into the details of that story in just a minute. 00:00:18.000 --> 00:00:19.000 But I started by asking Lizzie what her first thoughts were when she got that phone call, asking if she would take Jeff's reporting notes and run with them. 00:00:19.000 --> 00:00:20.000 [MUSIC FADES OUT] 00:00:20.000 --> 00:00:21.000 Oh, it was an immediate yes. Anyway, I wanted to do this. I think I was a little paralyzed by the expectation of it all at first, where I was like, oh, Jeff is this incredible journalist who has been doing this work for decades longer than I have, and I really hope that I can do it in a way that would've made him proud. And if this is a story that would've had his byline on it, then if it's going to have mine, I need to do it to the best of my ability to honor him and to continue his work and to show that just because you kill a journalist doesn't mean you can kill their stories. 00:00:21.000 --> 00:00:22.000 So, well, I want us to come back to Jeff in a little bit and talk more about his legacy and his impact. But first, let's dive into this story of his that you picked up because it's really quite a story. Tell us what state it was in when you first got assigned to pick up what was left on Jeff's desk. What did you know, at that point, about the story? 00:00:22.000 --> 00:00:23.000 So, before I even went to Las Vegas for the first time, Jeff's editor, the former investigations editor, Rhonda Prast, had sent me this email with a pretty thick paragraph where Jeff detailed the story that he wanted to tell. And in that memo, he had talked about shedding light on this really tangled web of corruption and money. And he named a couple of key players and said that he had court documents. And he hadn't gotten any further than that. So, when I showed up in Las Vegas and went and saw the newsroom, saw his desk, met Rhonda for the first time, she handed me this thick stack of folders containing these court documents. They were really neatly arranged, stapled at the corner. And I just remember so clearly feeling like this was my first glimpse at the kind of reporter Jeff was. Someone who is very dogged, very organized. You know, I walked out of there with those folders and the sense of purpose knowing that, okay, this is where I start. 00:00:23.000 --> 00:00:24.000 [INTRIGUING MUSIC] 00:00:24.000 --> 00:00:25.000 Lizzie dug into those court documents and started piecing together the story of this alleged Ponzi scheme. According to filings from the Securities and Exchange Commission, the SEC, this operation ran from 2017 to 2022 and was allegedly worth $500 million. It mainly targeted members of the Church of Jesus Christ of Latter-day Saints, also known as Mormons. More than 900 people invested their savings. 00:00:25.000 --> 00:00:26.000 [MUSIC FADES OUT] 00:00:26.000 --> 00:00:27.000 They had made this investment thinking that they were putting their money into essentially slip-and-fall contracts. So, the sales pitch that they were given was: okay, Susie slipped and fell outside of the hotel, and she's going to be given $200,000 in 90 days. But she can't wait that long; she needs that money now. So, we're gonna front her a portion of that money and charge her interest. And it's already been settled in court, so there's very little to no risk, and you will definitely get your money back. And so, if you choose to keep reinvesting that money, we'll give you a 50% annualized return. And so, that was really exciting to some people. They had dreams for that money. That was their retirement money. They wanted to put a pool in the backyard or send their kids to college. 00:00:27.000 --> 00:00:28.000 Not to mention 50% is [LAUGHS] incredibly high. Some might say too good to be true. 00:00:28.000 --> 00:00:29.000 Too good to be true. But again, I think that's where the part of the shared religion is a really big aspect of it. And so, experts explained to me that this is … it had all of the hallmarks of what's known as an "affinity fraud," which is where there is a higher level of trust within a group of people. Right? Like, these are people who you see every weekend at your children's soccer games, people you see at church, the grocery store. How the church is arranged: people attend church with people in their community, people on their street, people they live around. And so, a lot of people never stopped to think, "There are a lot of red flags here." Instead, they were like, "Oh, I really trust this person." And so, I wouldn't give this investment the same sort of sharp eye that I would if someone I didn't know was selling me on this. 00:00:29.000 --> 00:00:30.000 Mm. So, take us to the top of the Ponzi scheme. Who was at the top? 00:00:30.000 --> 00:00:31.000 So, at the top of this Ponzi scheme, allegedly, was this lawyer named Matthew Beasley. 00:00:31.000 --> 00:00:32.000 Who was not Mormon. Correct? 00:00:32.000 --> 00:00:33.000 Who is not Mormon. No. But he had a friend who was Mormon, a former pharmaceutical salesman named Jeffrey Judd. And the two men knew each other because their sons played soccer together; they grew up playing on these leagues. And at some point, Matt Beasley, the lawyer, had represented Jeff Judd in a case. And so, what the Securities and Exchange Commission laid out in their filings is that, at some point, the two men had a conversation about fronting this money to personal injury victims and bringing more people into it. It's a little unclear how much Jeff Judd knew from the very beginning, but the lawyer, Matt Beasley, did admit to the FBI that it was a Ponzi scheme and that it was never real, that none of those investments were real. 00:00:33.000 --> 00:00:34.000 So, when you say it was never real, I mean, what was happening? What was happening to people's money when they would put it into the pot? 00:00:34.000 --> 00:00:35.000 So, sort of a classic Ponzi scheme thing where the money from new investors was used to pay the dividends of older investors … 00:00:35.000 --> 00:00:36.000 Right. 00:00:36.000 --> 00:00:37.000 … instilling this sense of faith that, okay, this is real. The money is arriving right on time, every single time, no defaults. That's actually a huge red flag. No investment is that secure that you would get the same thing at the same time every month or few months. 00:00:37.000 --> 00:00:38.000 Sure. 00:00:38.000 --> 00:00:39.000 The men at the top also held onto a lot of money and used it to fund very extravagant lifestyles: trips to the Caribbean, a private jet, multi-million-dollar properties in Nevada, in Lake Tahoe, in Southern California. 00:00:39.000 --> 00:00:40.000 How were Beasley and Judd able to keep this scheme going in secret for as many years as they did? 00:00:40.000 --> 00:00:41.000 There was a lot of secrecy surrounding this Ponzi scheme. People who chose to invest were given this paperwork where they had to sign non-disclosure agreements saying that they wouldn't talk about it with other people, that they wouldn't contact the, quote unquote, "clients," the slip and fall victims whose contracts they were allegedly buying. 00:00:41.000 --> 00:00:42.000 I see. So, how was this scheme ultimately exposed? How did it get on the FBI's radar? 00:00:42.000 --> 00:00:43.000 Yeah, so it's really interesting. There were two things sort of happening at the same time. Someone tipped off the Securities and Exchange Commission. It was someone in Salt Lake City who had seen the investment paperwork of a friend and reported it to authorities because they thought it was really sketchy. So, that was sort of happening in the background. And then, at the same time, there was another person, a man in Washington State, an accountant, who also saw this paperwork from a client, became really alarmed by it, and decided that he was going to report it to this whistle-blower group called Hindenburg Research. The group's based out of New York City; they have sort of made their name by exposing financial fraud and cashing in on those whistle-blower awards. So, after the accountant told Hindenburg, they sort of launched their own investigation, trying to gather evidence of the marketers giving the pitch, working their way up to the top so that they could prove that the men allegedly at the top of this Ponzi scheme knew it was happening tot, and then they turned that evidence over to the FBI and the SEC. 00:00:43.000 --> 00:00:44.000 [PENSIVE MUSIC] 00:00:44.000 --> 00:00:45.000 The people at Hindenburg were known as "Ponzi hunters." And part of the chase in taking down this scheme involved secretly recording the marketers giving their pitch to someone posing as a potential investor. "The Washington Post" obtained the video, which Hindenburg handed over to federal authorities. 00:00:45.000 --> 00:00:46.000 [MUSIC FADES OUT] 00:00:46.000 --> 00:00:47.000 [START THE WASHINGTON POST ARCHIVAL CLIP] 00:00:47.000 --> 00:00:48.000 The basic structure is: When an individual has a personal injury claim and they reach that settlement point, there's a 90-day waiting period there. 00:00:48.000 --> 00:00:49.000 Mm-hmm. 00:00:49.000 --> 00:00:50.000 And so, Jeff, J&J Purchasing and Matt Beasley, you know, they've … [VOICE FADES OUT] 00:00:50.000 --> 00:00:51.000 [END THE WASHINGTON POST ARCHIVAL CLIP] 00:00:51.000 --> 00:00:52.000 Within weeks of this recording, the FBI starts knocking on doors. They go to Jeffrey Judd, and by the time they get to Matthew Beasley, he knows they're coming for him. 00:00:52.000 --> 00:00:53.000 The three officers go up to his front door and Matt Beasley appears, holding a gun to his head. The officers tell him to drop the gun. And he sort of sweeps it towards the ground in this motion that the officers perceive as threatening. Matt Beasley told me that he was never pointing the gun anywhere but at himself. Whatever the case, the FBI officers shot him, and he retreated inside of his home where he was for nearly four hours, as he talked with a hostage negotiator over the phone. And so, it was through those conversations that we learned a lot about how this fraud was perpetrated and why. Matthew Beasley told the FBI that he had these gambling debts that he needed to pay off, and that was the genesis of it. And then he admitted over and over that it was a Ponzi scheme, that none of the investments were actually real and sound, that he had made the whole thing up. 00:00:53.000 --> 00:00:54.000 It turned into a real standoff, it sounds like. 00:00:54.000 --> 00:00:55.000 Yep, yep. They kept trying to get him to come out, and he was so ashamed and said he was not coming out alive. 00:00:55.000 --> 00:00:56.000 Wow. So, how did the standoff end? 00:00:56.000 --> 00:00:57.000 At some point, the FBI was ordered in to go and bring him out, and they did that successfully. Matthew Beasley was taken to the hospital, and then he was taken to Nevada Southern Detention Center. The FBI charged Matthew Beasley with assault against a federal officer for what happened. 00:00:57.000 --> 00:00:58.000 That assault charge is the only one Beasley faces right now. No charges have been brought against anyone, related to the alleged Ponzi scheme. 00:00:58.000 --> 00:00:59.000 [GENTLE MUSIC] 00:00:59.000 --> 00:01:00.000 Which is pretty confusing to the victims because, for them, the fall-out from all of this has been devastating. I mean, imagine you've been talked into this investment opportunity, only to find out it was all scam and your money is gone. 00:01:00.000 --> 00:01:01.000 There was one man I talked with whose stepdaughter had gotten him to invest. He's older. He invested 95% of his savings. And his wife is in an assisted living facility for dementia, and now he is being confronted with the fact that, again, he has no money, and he's considering selling his home, and he now has no relationship with his stepdaughter. 00:01:01.000 --> 00:01:02.000 Lizzie spoke to dozens more victims, including one woman named Ann Mabeus. 00:01:02.000 --> 00:01:03.000 [MUSIC FADES OUT] 00:01:03.000 --> 00:01:04.000 So, Ann was a recent divorcee, became a single mom with four kids. And so, she had planned to live off of the dividends of that investment, along with child support from her ex-husband. She is a former teacher, has her master's degree, but she hadn't taught in more than a decade, got really used to being home with her kids and loved that she was able to be in their lives in the way that she could. But when the scheme crashed, she lost everything. She had put hundreds of thousands of dollars in, and soon after found herself grappling with, "Okay, what do I do now? I need to go back to work. I'm running out of money." Then she gets an eviction notice. And she is just really emblematic of the ways in which the repercussions of this continue to play out in people's lives in real time, and will for a really long time. 00:01:04.000 --> 00:01:05.000 Was there a moment where it sort of crystallized for her, that she realized that this was not a legitimate operation? 00:01:05.000 --> 00:01:06.000 Yeah. So, even when the FBI raid happened, that was the first sign for her along with many others that this wasn't real. She had some hope. She was like, "Okay, maybe there is some misunderstanding. Maybe this is still real. I'm supposed to get my next check in a few days. I'll know if it doesn't hit my bank account." And so, she waits, and the day arrives, but the money doesn't, and that's when she realizes that everything is gone. 00:01:06.000 --> 00:01:07.000 That makes me think about [LAUGHS] one of the things that she said, one of her quotes that I found really striking is that, because we were all part of the same church, because we were part of the same community, all of the red flags were heart-shaped. [LAUGHS] And I just, I thought that was such a good way of putting it. Everything, it sounds like, was sort of enveloped in this level of "I got this really good deal for you because you're my close friend, because I see you as a valued member of my community." Right? 00:01:07.000 --> 00:01:08.000 Correct. And I think that's something that a lot of people don't necessarily realize about Ponzi schemes, or at least I didn't realize it, which is that it's shrouded in this sense of secrecy and exclusivity. Right? Where Ann had told me, "I felt really lucky to be asked and to be included, and I felt like I was part of this very special club." And so, again, didn't really think about all of those red flags. Instead, was like, "Oh, this is someone I trust. This is a great deal. I'm so lucky they're letting me in. Of course, I'm gonna do it." 00:01:08.000 --> 00:01:09.000 Intrigue, deception, a call for justice. This story was sitting on Jeff's desk for a reason. It needed to be told. 00:01:09.000 --> 00:01:10.000 I think it was also really special in how the partnership ended up coming together, in that I was the one reporting and writing, but I also worked really closely with a photographer out of Las Vegas named Rachel Aston. She did all the visuals. And so, getting to tag team it and really uphold Jeff's story in these two big ways with these incredible photos and also with this reporting, I think it was really healing for the newsroom. 00:01:10.000 --> 00:01:11.000 [GENTLE MUSIC] 00:01:11.000 --> 00:01:12.000 We reached out to Jeff's newsroom. Glenn Cook, the executive editor of the "Las Vegas Review-Journal," told us that his colleagues are missing him and trying to honor him. 00:01:12.000 --> 00:01:13.000 Jeff was a borderline legendary figure in our newsroom. I mean, everybody knew that he'd been in the business a long time, but he never carried himself that way. And he had an enormous passion for journalism. You know, it was his calling. He was 69 years old, and he told all of his colleagues that this was his job, this is what he always wanted to do, he was never gonna retire, he was gonna report as long as he possibly could. And so, his murder has left a real void in our newsroom. It's a hole that can't be filled. 00:01:13.000 --> 00:01:14.000 Glenn said, seeing Lizzie and "The Washington Post" bring Jeff's reporting home was emotional. 00:01:14.000 --> 00:01:15.000 The reality for us was we were not gonna get to that story. We didn't have the resources. We weren't gonna be able to peel someone off of the story of Jeff's murder and the suspect in the case, Robert Telles. We continue to put a lot of resources into reporting that part of the story. And I don't know when we would've gotten to this Ponzi scheme story and when we would've been able to try to pull together the story that Lizzie ultimately did. We're just incredibly thankful that "The Post" made that offer. And we will never forget that they did this for Jeff. 00:01:15.000 --> 00:01:16.000 [MUSIC FADES OUT] 00:01:16.000 --> 00:01:17.000 You know, I have stayed in contact with his editors and a few people on his team, and then have also been emailing with his brother-in-law. And so, I think that was really special too, to feel like I got to know him through the reporting, and I got to hear from the people closest to him about what he would've thought about the story after it came out. 00:01:17.000 --> 00:01:18.000 And what did they say? What did they share with you? 00:01:18.000 --> 00:01:19.000 They said that they thought he would've been proud. [CHUCKLES SLIGHTLY] 00:01:19.000 --> 00:01:20.000 You know, you mentioned how when you first picked up all these notes from Jeff German's desk and how he was on your mind a lot, at the beginning of the story. I wonder if you could tell us a little bit more about how Jeff was present through your reporting. 00:01:20.000 --> 00:01:21.000 I thought about him all the time. You know, I was constantly thinking, "Oh, I wonder what Jeff would think about this," as I learned something new, or "I wonder what Jeff would do with this, or what would he look for next." There was even one moment in the reporting where I had reached out to a source with a couple of questions, and they called me back and they were like, "This is kind of weird, but I actually knew Jeff from a different story." He was so embedded in that community. I mean, Jeff, from what I've heard, is someone who gave his heart and his entire life, up until the end, over to this job. He believed in the power of journalism and telling stories that mattered and holding power accountable. And I think that, isn't that what we all wanna do with our work, to feel like it impacts the world in a meaningful and positive way? 00:01:21.000 --> 00:01:22.000 Mm. 00:01:22.000 --> 00:01:23.000 And to just have gotten the chance to do that for him, to carry the torch for him, I think that might be the most meaningful work that I've ever done. 00:01:23.000 --> 00:01:24.000 [MUSIC FADES IN] 00:01:24.000 --> 00:01:25.000 Well, Lizzie Johnson, thank you so much for doing this reporting and sharing a bit more about Jeff with us. We appreciate it. 00:01:25.000 --> 00:01:26.000 Thank you. Thank you so much. 00:01:26.000 --> 00:01:27.000 You can read Lizzie Johnson's reporting for "The Washington Post" on Apple News. We'll include a link for you on our show notes page. 00:01:27.000 --> 00:01:28.000 [MUSIC FADES OUT]