1904: The White Collar Support Group

Speaker: jeff-grant_1_10-02-2024_111932: when I got out of prison, I start to volunteer at, at, um, drug and alcohol rehabs and criminal justice organizations. And that led me to really love being of service and understanding the reasons why originally I'd gotten into law in the first place, you know, 25 years earlier. And, um, I didn't know what I wanted to do. this is Jeff Grant, the founder of the first and only white collar support group that I know of anyway. jeff-grant_1_10-02-2024_111932: I just knew I wanted to help people and help people who were justice impacted. Um, and, uh, I decided to apply to seminary. you know, divinity school. and then got a master's of divinity and became a reverend. And so there I am with, Oh, by the way, there's, there's the, javier_1_10-02-2024_111935: wondering if that was jeff-grant_1_10-02-2024_111932: One of those right there is my Master of Divinity diploma. And so there I am, um, uh, a Jewish reverend. Don't ask me how that works out. I don't know. Um, a Jewish Christian reverend, I guess. And, um, I started working in churches. I worked in an inner city church in Bridgeport, Connecticut, an all black church in, um, in Bridgeport. And then, uh, I, at a, um, at a criminal justice organization, non profit in Bridgeport, Connecticut. Jeff was lost and religion gave him direction, a sense of purpose. So he started working in churches and volunteering at criminal justice organizations. Founding the White Collar Support Group jeff-grant_1_10-02-2024_111932: And in the course of doing that, uh, we founded the White Collar Support Group and our ministry that's devoted to supporting people who've been prosecuted for white collar crimes and their families. And that really just took off. We, uh, we started doing white collar support group meetings online, A white collar support group? Yes. Think of it as AA, but for Ponzi schemers, corrupt CEOs, investment fraudsters, insider traders, you know, those kind of guys. You name it. You name it. The kind of people who would never be caught lifting your wallet on a bus, but don't think twice about embezzling funds from your company's account, or draining your life savings. For the most part, these are privileged individuals who are well educated, had high paying jobs, and were in a position of power. Of all the people, these might be the last guys you would think that would seek this kind of help. After all, a corrupt company executive isn't a After all, a After all, a corrupt company executive isn't constantly being profiled and stigmatized by the judicial system the way a poverty driven criminal is. No one is clutching their purse when they walk by, or posting on Nextdoor when a man wearing khakis and a button down shirt walks into their neighborhood. These guys are rich. These guys are rich. Shouldn't they just be able to bounce back up? Shouldn't they just bounce back up? Don't they have cash hidden in some shell company in the Cayman Islands And most of these guys, they get a slap on the wrist anyway. According to a study published in the Yale Law Journal, white collar criminals in the Southern District of New York, where many of these cases are tried, serve less time in prison, or no prison at all, than what's being recommended by the sentencing guidelines. than what's being recommended by the sentencing guidelines. Why do they need a support group? Unlike poverty driven offenders, white collar criminals had everything, and now that they got caught, they want our sympathy? But It's actually not that simple. Maybe the problem is that when we envision a white collar criminal, we think of Bernie Madoff, Jordan Belfort, you know, the Wolf of Wall Street, or our old pal, Frank Abagnale. There aren't, there aren't a lot of statistics about this topic, but if I had to guess, many white collar crimes, many white collar crimes involve much smaller amounts of money than you would think. The median loss for insider trading is about eight thousand dollars. And for tax evasion, it's about 300, 000. That's not chump change, but it pales in comparison with the multi million dollar schemes that you hear in the news. For the non burning made ups of the world, getting prosecuted has real world consequences. One day, they're one day they are accepted members of society, and now they have shattered reputations, the loss of relationships and the stress of going to prison. And then they have the long-term difficulties of reintegrating into society. The most surprising thing about today's episode is that any one of us could get caught up in a white collar crime. And unlike some of the most famous offenders, you might not have the resources to get out of it. We're going to hear what led Jeff Grant to start his support group. We're going to hear what led Jeff Grant start his white collar support group. And in another segment, you'll hear, you'll hear a man's story of insider trading, how one bad decision led to another. And how he was able to turn it around, and how he was able to turn his life around after becoming a felon. I'm Javier Leyva, and this is Pretend. Stories about real people pretending to be someone (https://www.ussc.gov/sites/default/files/pdf/research-and-publications/quick-facts/Tax_Fraud_FY20.pdf) //AD MARKER// jeff-grant_1_10-02-2024_111932: You know, I didn't grow up with money, but I was certainly materialistic and, um, much more so This is Jeff Grant again, the founder of the White Collar Support Group. jeff-grant_1_10-02-2024_111932: than spiritual at the time. And I was, um, kind of in a culture where, you know, Jewish Long Island money was important, um, and how successful you were was pretty much gauged by how much money you made. Um, there's a, uh, I would say that once my parents split up and then my father kind of entered a different world of, uh, of, uh, being around a lot of wealthy people, um, my, my awareness of, uh, of that kind of thing happened, I could tell you some stories about, about, uh, kind of being on the periphery of that world, but being, uh, you know, accepted into it because of my, uh, uh, Because of my, uh, of my, you know, whether or not my father and, and Linda Dick were actually married or not, it's, it's, it's kind of a question, but I kind of, I consider her my stepmother because they were together for a long time and it was a world I knew nothing about, but it was, uh, Highly attractive for sure. javier_1_10-02-2024_111935: you know, in, in the article, they also talk about. Well, I guess the question I have for you is when I think of white collar offenders, I also think about people who are seize opportunities. I often think of white collar offenders having the same characteristics as an entrepreneur, right? Like the, their, the characteristics are the same, except that maybe the white collar offender. chose a different route. You know, would you do you think that that's a fair Entrepreneurial Spirit and Opportunism jeff-grant_1_10-02-2024_111932: Yeah, I think, I think that there's a lot of similarities. I mean, I, I think in business it would have been reasonable to call me an entrepreneur. I, because I wasn't just a lawyer. I had other interests too. I, I owned a restaurant. I was in the health club business. I was in the real estate business. I did, I did a lot of things. Um, when I look back at it, I was really much more of an opportunist than I was an entrepreneur. javier_1_10-02-2024_111935: You described yourself as an opportunist, but also it sounds like you're a risk taker, too. jeff-grant_1_10-02-2024_111932: I think, I think, I think that's generally true. I mean, you know, it's, it's hard to know what was true back then and what's revisionist now. You know, I'm I'm older now. I don't take the same kind of risks anymore. But not only was I, I, uh, a risk taker back then, but as I got hooked on, uh, on opiates. Then, you know, they were disinhibitors. I, I was for a while, I was willing to take a lot more risk and until of course my, it, it severely impacted my judgment. And, um, and then I was taking too much risk or I wasn't being able to show up enough to take advantage of the opportunities that were being presented to me or that I had, uh, that I had invested in. javier_1_10-02-2024_111935: As an attorney, did you ever have a nickname for when you practiced law? jeff-grant_1_10-02-2024_111932: That's what a great question. Well, I called myself a killer. Or an assassin. I think I call myself an assassin. javier_1_10-02-2024_111935: Why And because for me, I I didn't really know better, you know, for me, it was kill or be killed. And while I appreciate the fact that that is, uh, probably a way, the way a lot of businesses run in Wall Street and other kinds of businesses, mostly what law is, is, uh, a business of relationships. And trying to, uh, compromise. And I was not really one of those guys, you know, I was out, I was out to win. I was out to kill every single time. And so that did not make me a lot of friends within the legal community. Um, I had a lot of wins. I'm not sure if in the long run that either served me or my clients so well, at least my longterm clients so well, because it takes a lot of diplomacy and a lot of finesse to actually be able to accomplish things on a business level, and especially for clients. And, um, I think I alienated people as much as I did make, make friends or even, or make, uh, uh, diplomatic friends jeff-grant_1_10-02-2024_111932: because you don't have to be friends with everyone you do business with, but you do have to be able to have some common ground. javier_1_10-02-2024_111935: right. You can't burn everything down, jeff-grant_1_10-02-2024_111932: I, javier_1_10-02-2024_111935: need have some jeff-grant_1_10-02-2024_111932: I, I, I burned everything down, almost everything down. javier_1_10-02-2024_111935: pinnacle of your, of your career. And it can be prior to the offense, or it could be at any point. What was the highest point? Like the, the time you look back and you're like, man, I was crushing it. jeff-grant_1_10-02-2024_111932: I had become general counsel to a large real estate equities company. And so I was C suite. There were tens of thousands of residential units, and I was, uh, running the law, I was part of the financial team, um, I was making gobs of money, it was a great run for a while. javier_1_10-02-2024_111935: Yeah, and then on the flip side tell me when things just started falling apart.

The Downfall: Addiction and Financial Struggles jeff-grant_1_10-02-2024_111932: Well, I would say they fell apart mostly after I, you know, I had a sports injury. And, and, uh, as a result of that sports injury, I got hooked on, uh, on opioids first on Demerol, and then later on it was Oxycontin. And I didn't really know that that was the beginning of the opioid crisis. You know, it was the, it was the, um, uh, ultimately the, towards the mid and late nineties, and that's when, uh, you know, Purdue farmer was starting to came out with Oxycontin and was pushing them. I didn't know I was just a guy who was, was hooked on them. And, um, at the time, uh, the doctor friends I had were able to prescribe as many as I wanted, and they did. And so I never really paid for any of it. I paid like 5 copays. And I was running around to different drugstores and going to different doctors and getting different, you know, it was exhausting,

Speaker: javier_1_10-02-2024_111935: addictive jeff-grant_1_10-02-2024_111932: highly highly addictive. And, and I knew, I knew it. I wasn't, you know, I, I was just powerless to do anything about it. javier_1_10-02-2024_111935: yeah, even if you know it, once you're in it, you can't get out. And I just had a curiosity, what sport were you playing when you got injured? jeff-grant_1_10-02-2024_111932: Basketball. I played basketball every afternoon or every day of my life, I was 32 years old. And, um, I went across the street from my office. There was a, there was a, uh, an elementary school with, with, with one of my clients and I, I ruptured my Achilles tendon and went right down and javier_1_10-02-2024_111935: that weird how something like that, really, that was such a pivotal moment in your life, right? jeff-grant_1_10-02-2024_111932: absolutely. javier_1_10-02-2024_111935: once you get injured, That's when you get addicted to the painkillers, jeff-grant_1_10-02-2024_111932: Yep. javier_1_10-02-2024_111935: that's when you start making really bad decisions. You know? Isn't that crazy how you could trace it back to, one, one incident? So, you know, it, it wasn't just the addiction problem that you had, but you also started getting mounting, uh, uh, mounting dead. Right? jeff-grant_1_10-02-2024_111932: I mean, little, little by little, as I was unable to show up to work and I was unable to be kind of the, uh, I wasn't watching out for my own pocketbook. I wasn't watching out for things. Um, but I still was living a big lifestyle. And spending too much in terms of, of my practice, uh, wasn't watching people in terms of, uh, the work product they were producing. So I probably had too many employees, too much overhead, too much personal overhead. And so the debt started to mount up and the more. Anxiety that was being produced there. I was, I was, I was getting, I was becoming massively overweight. I was, uh, I was vomiting up blood, having the anxiety of, of having to show up on a Monday morning. Um, uh, I didn't look well. Um, it w it, it was a mess. And, and so, you know, six or seven or eight years of that and, um, could wake up owing a lot of money. Um, and not having the, the personal resources or the intellectual resources to be able to find my way out of it with any kind of elegance. The weight of all that debt left Jeff Grant with few choices. This Either admit that he was in over his head, or find some way, or find some way to keep the plate spinning. He chose to keep the plate jeff-grant_1_10-02-2024_111932: Well, at that point, I had already, um, I was already under investigation for escrow violations because I had invaded the escrow account to cover payroll and I wasn't negative on it. I was just using it kind of as a, as a, as a, uh, a wallet to go back and forth from, hold on one sec. Sorry. And And javier_1_10-02-2024_111935: so in other words In other words what you're saying is that you have clients you have to get payroll paid and so you're dipping into Clients accounts in order to pay for the payroll. Is that jeff-grant_1_10-02-2024_111932: exactly, exactly. And because we were doing a lot of real estate transactions and things like that, there were probably millions of dollars sitting there. And I have no idea why I thought it was a good idea to, to go to those funds to be able to cover. Um, mostly I'm sure it's because I was, I was desperate and I was stoned. And, um, it was not, it was not a good idea, obviously. Once I did it, there was really no turning back. So I was under a multi year investigation by the, uh, New York State, um, uh, grievance committee looking into those transactions. And then 9 11 hit and, um, business got worse. My drug addiction started to ramp up even more. And, uh, a couple of months later, there were advertisements on the, on the TV and on the radio, uh, for, um, small business loans to cover business losses as a result of 9 11. Um, same thing that's been going that went on for the past few years because of the pandemic. And, um, I called them up and I told them what my situation was. And they told me because I, my business was at that point it was in Westchester County, which is the one county north of New York City. That I would qualify geographically and to fill out the application. And when I did, I could not help myself, but to, uh, misrepresent, uh, my business and tell them that I had an office about a block from ground zero at 40 wall street, which is Donald Trump's building down there. javier_1_10-02-2024_111935: and that was in order to obtain an sba Exactly. Exactly. jeff-grant_1_10-02-2024_111932: And and and I certainly didn't need to do that. I would have been approved anyway. javier_1_10-02-2024_111935: yeah, so it was that, that, um, detail that really landed you in trouble. Right. With, uh, with or um, jeff-grant_1_10-02-2024_111932: No, no, javier_1_10-02-2024_111935: IRS investigated, was investigating something jeff-grant_1_10-02-2024_111932: no, it wasn't really the IRS. It was a small business administration. They have a criminal investigation division. And, um, in July of 2002, I, um, resigned my law license and took my last, last drugs and tried to kill myself, went to rehab, and then when I got out of rehab, seven weeks later, I started going into AA. which I've been in now for 22 years, but, um, I was in AA for about 20 months and I got a phone call from the investigators, um, you know, the two federal investigators who told me that there was a warrant out for my arrest in connection with the misrepresentations I had made on that small business loan. And so that's where I was already down. I was already down. I was already out. Facing Legal Consequences jeff-grant_1_10-02-2024_111932: I'd already hit my bottom. I was already getting sober. And then, you know, this hit me like a, you know, a bomb went off that I was in legal trouble. javier_1_10-02-2024_111935: and that, and you ended up pleading guilty. To wire fraud and money laundering Right. jeff-grant_1_10-02-2024_111932: Yes. javier_1_10-02-2024_111935: And how long of a sentence did the judge give you? Life in Federal Prison jeff-grant_1_10-02-2024_111932: The judge sentenced me to 18 months in federal prison of which I served 13 and a half months in Allenwood, low security, uh, correctional institution in Pennsylvania, then halfway house and, and home detention, and then three years of, uh, federal probation. javier_1_10-02-2024_111935: And one of the things that I would like to think this is different. I think when people think of white collar criminals, I think of Bernie Madoff, you know, they think of like schemers, uh, people who, who do these large scale schemes. Right. And talking with you and Tom. So far, and even Craig, these, um, a lot of the people that you, you talked to are, have found themselves in these situations that there, it was maybe a bad opportunity that, jeff-grant_1_10-02-2024_111932: hmm. javier_1_10-02-2024_111935: something that they stumbled upon rather than this big jeff-grant_1_10-02-2024_111932: Yeah. javier_1_10-02-2024_111935: My cousin, going back to the story about my cousin, he went to federal prison too, for his crimes. And But he called me from prison and he would describe a very cushy environment. Like he was doing yoga, playing tennis, had a balcony, like describe, was that your experience or, jeff-grant_1_10-02-2024_111932: That was not my experience. I do appreciate the fact that it is some people's experience and more so back then, by the way. Um, because, um, a lot of people, a lot of white collar criminals, uh, do get, um, designated to camps. I did not, I was designated to a low security prison, which had actual bars on the windows and, uh, controlled movements. And it was not cushy at all. Uh, that, that said. Um, it wasn't an altogether negative experience. Um, it was a little frightening and, but I survived. when Jeff Grant got out of prison, there was no, there was no white collar support group. He just had to figure things out on his own jeff-grant_1_10-02-2024_111932: for me, I had to be willing to start over. So I, I, I don't know if, I don't know if you remember Javier, but when you got out of college or you get out of high school, you get out of college, you know, you don't know what you're going to do. You don't know, you got to start sending resumes out. You got to do whatever you got to do to kind of get that first job. And then that leads you to the next job. And then that leads you to the next job. And now imagine it's 25 years later and the, in a way we're still mourning our old life. We're, Afraid of what is going to happen, and so where there's, there's, there's this fear, there's, there's a trauma about the past, this fear of the future, and What really have to do is you have to kind of be where your feet are. Okay. I need a job. What are the things I need to do to get a job? And a lot of people will not, um, will not, um, lower themselves down to the, to, to the base place where they need to be. Their egos get in the way. And I was willing to do anything. I mean, in the first jobs I got, I was, I was collating papers. I was stapling. I was, uh, You know, I, I, I, I, I, I would do anything. There's no job that was too, that was too small for me. It didn't take them long when I was working there to figure out, maybe took them three weeks to figure out, wait, wait a second, you know, we have a. We have a seasoned lawyer here who we can exploit. And they started giving me projects to do because they were paying me almost nothing, but I was happy to do it because I needed to get back on my feet and I needed to start making connections. Challenges and Success Stories jeff-grant_1_10-02-2024_111932: I needed to start making my way through the world again, but not everybody's willing to do that, or they don't even know that they're their own worst enemy. I mean, the. There are a lot of barriers for people who have been convicted or of crime and white collar crime or have been to prison. But the biggest barrier is ourselves. No question. But if you're able to navigate that, if you're willing to understand that, okay, look, I need to start over and that my second life may bear no reasonable relationship to my first life. Let me give you an example. Um, if you take a, um, a person who has two separate lives, let's just say for example, in their first life, they were a hedge fund manager. And in their second life, they're a janitor. It's hard for that hedge fund manager to, to, to take the ego hit and become a janitor. Okay. Or maybe he's even a janitor for a while. It's not so hard for a janitor to want to become a hedge fund manager. It's really only the order of things and, and, and the way that we place value on, on these things. I was willing to become a janitor. I mean, in my, in prison, that's what I did. I worked in the mop closet. I, I cleaned out garbage cans and I was grateful for that. And so when I got home, I would do anything. And, um, I think that served me well. And even now in people that, uh, in friends and people who are on our white collar support group, the ones who take jobs in warehouses or they're working on the floor at home Depot, they're doing whatever they have to do. Those are the people I know are going to succeed because they're not going to be working. In the warehouse that long, what they're doing now is they're, is they're retraining themselves. They're getting themselves back into the workplace. They're, they're getting over their trauma from prison and they're putting some food on the table. You know, there's a lot of people who don't, javier_1_10-02-2024_111935: It's a great attitude, and just hearing you talk about it spells out the importance of resetting somebody's mind and expectations, right? Because it's like you said, if, you have been involved in a crime and were convicted, go to jail. Prison and you get out you feel lonely, right? Because you probably don't know other people and your circles You are the black sheep probably and and then you feel alone and lost right? And so like this support group. I could see how it could orient Somebody to to start over to reset their expectations, right? It's The Importance of Community Support jeff-grant_1_10-02-2024_111932: I mean, there's no question that isolation is the killer and just being alone with ourselves, being alone in our own heads and coming into community. is, is what saves us, but a lot of people are afraid to come into community. I mean, we've had 1200 people join our support group. We've been doing it for eight and a half years. Uh, we've had over 425 weekly meetings on Monday nights, but far more people never, never call upon us or never joined the support group meetings and then have. And I'm, I'm always surprised. What, uh, why wouldn't you, I mean, they, if everyone who's successful knows that networking is critical to success, so if you have a network, go for it, but a lot of people who've been to prison for white collar crimes, they are estranged from their networks. There's no way they have those networks anymore. So why wouldn't you join a network that is available to you? And. See how it goes. When we return from the break, we're going to talk about another white collar offender, who found a Who found a community at the Monday Night White Collar Support Group meetings Tom Harden has an average name. He looks like an average guy working at an average fin Working at a working at an average financial planning firm. But after his conviction for insider trading, Tom Harden is best known for Tom Harden is best known as

Tom Hardin: formerly known as FBI informant, tipper X, the most Important informant and securities fraud history.

Speaker: After his conviction, Tom Harden says that he felt like he lost total control of his life.

Tom Hardin: So I was trying to figure out again, like you said, the job opportunities, how to bounce back professionally and. You made a good point in the US. I mean, white collar criminals are viewed very poorly. Most of the countries in the world are like, you know, you've not that I went to prison, but you've done your, you have the felony you've done, you paid the consequences.

Speaker: And now this country wants to give you another opportunity in America. It's very hard, very punitive. And so I was looking at what to do. And then it connected, um, with another, uh, felon who I met. And like you said, just So he told me he was, there was in this white collar support group. So I had to call with the founder, Jeff Grant, and started dialing into Monday night calls. So every Monday night on zoom. Now we have people from all over the country and some people from over the world who are in a similar type of situation. Maybe the FBI just approached them, you know, maybe it's just at the start of this or so many of them are looking at prison They're being sentenced to prison. They can talk to other people Monday night who have actually gone to that prison and Instead of paying a prison consultant thousands of dollars and some of those prison consultants. It's a very not ethical Profession to charge somebody a lot of money and, you know, create fear for them about what's going to happen, you know, on the inside, your white collar. And so there's a very big vulture industry with that. Can you believe that? There is a thing called prison consulting. But Tom says that this group is not a, but Tom says that the white collar support group is not about profiting from someone when they're already knocked down.

Tom Hardin: Um, we have this free group Monday nights and, uh, we, you know, it's every week. And so it's grown and grown and grown and you realize. A lot of people are suffering in silence. Like I stopped going to any type of events or with my group, like, I don't want to see anybody when I'm going through this, have a lot of shame and guilt and my social network is totally gone, my old one, and you kind of have to start a new network and it's just a great.

Speaker: Group to actually be able for me to start a new network of people going through similar things. Hey How did somebody get back on their feet professionally? That's probably the number one thing people struggle with like, okay What i'm gonna do with my life, especially a young person who hasn't accumulated wealth yet. Like what are you? Going to do, and it's called the white collar support group, but it's not people who are big honchos on wall street. White people might think about white collar. It's somebody in middle America working for a dentist that embezzled because if they had some costs they had to pay, you know, in their personal life, they got out of the control or there was addiction problems and they made a bad choice. And so they're a white collar criminal. They're not running a bank on wall street. They're

Javier: you don't have the wolf of Wall Street on

Tom Hardin: dialing in. Exactly. Exactly.

Speaker: So how did Tom Harden get wrapped into this mess in the first place? How did he ultimately become Tipper X? Tipper X was one of Wall Street's biggest mysteries. At the time, everyone wondered who the heck is this secret witness? Who the heck is the secret witness who brought down one of the biggest insider trading cases in the U. S.? Tom Harden unintentionally found himself at the center of this investigation that ultimately brought down billionaire Raj Rajaratnam, Rajaratnam, and his hedge fund, the Galleon Group, and his hedge fund, the Galleon Group. But it wasn't by design. It all started, it all started with what he considered harmless insider trading.

Tom Hardin: With insider trading, it's like, well, I'm just buying it before everybody else. You really feel like there's no victim because who, who am I really?

Speaker: Am I stealing money? I'm just buying it from somebody anonymous in the stock market who sold it to me. Like I'm not hurting anybody. It's not like the visceral feeling may be of a Ponzi scheme Insider trading sounds really complicated, but at the end of the day, it's just someone buying or selling securities such as stocks, bonds, options, based on non public information about that company. So, let's say you learn that a company is about to announce a major breakthrough, which is expected to raise the, which is expected to raise the stock price. If you buy the shares of that company before the public, if you buy shares of that company before the, if you buy shares of that company before the information becomes public and you make a profit when, and you make a profit when the stock rises, you've committed insider trading. It's really that simple. Just ask Martha Stewart. Just ask Martha Stewart

Tom Hardin: Am I stealing money? I'm just buying it from somebody anonymous in the stock market who sold it to me. Like I'm not hurting anybody. It's not like the visceral feeling may be of a Ponzi scheme where, Oh, I'm stealing your money and doing something else with it. And I know. You know, I'm doing this and it's, and I'm taking your savings.

Speaker: Like I'm just buying it before everybody else. I feel like everybody's doing it. Uh, I said, I'm just taking a flyer. And it wasn't a whole lot of money. He just thought, I'll just take a couple crumbs off the table. It's not that bad, right? The government says that Tom Harden, who worked as a managing director at a hedge fund, cashed in on secrets from companies such as Google, Hilton. But one day, while dropping off his du But one day, while dropping off his dry cleaning, two FBI agents approached him. That's when his world, that's when his world just came crashing down. That's when his world just fell apart. Tom Harden wasn't a mastermind criminal. He didn't even have, he didn't even have, he didn't have any trusts or offshore accounts with a small fortune waiting for him. Everything he's ever worked for was gone. His, his youth was gone, his career was gone, and his marriage was in shambles. Tom Hardin Introduction

Javier: All right, we're recording. So Tom, I don't know if you've listened to my show, but it's like, I edit the hell out of it. Okay. So it's not like if we mess up or whatever, don't worry about it. We just started all over again. But I think the, the first place to start is just like, tell me a little bit about your story and, and, and then kind of lead into the downfall, you know, of how everything kind of came.

Tom Hardin: sure. Um, so

Speaker: Background Tom Harden grew up in the suburbs of Atlanta, Georgia

Tom Hardin: Tom Harden grew up in the suburbs of Atlanta, Georgia in the eighties and nineties. Um, father worked at Coca Cola mother stayed at home with the three boys. I'm the youngest, I'm the oldest of three brothers, sort of middle class suburban Atlanta family, um, applied to three colleges back in the nineties when we just applied to a few, a few schools.

Speaker: And, uh, my reach school was a university, Pennsylvania, um, the Wharton school of business there, um, really. Thought I had no chance of getting in because my grades were kind of on the, the SATs were kind of late right there. And luckily I think in the 90s they had a quota for Georgia, people from Georgia. So, so they, they, they let me in. Um, and then that was just a higher caliber of sort of like competition. Like I was a great public school student in Georgia and then going to the school. just raised, raised the game looking around everybody's valedictorians or that kind of school. They're like the, the children of ambassadors, you know, this is sort of like who you're talking to in the hallway. So for me, sort of in my little Georgia bubble, going to the school was pretty, Pretty amazing. And I was interested kind of more on the accounting side of business. When I, when I started at Penn Wharton, uh, most of my successful parents, uh, of friends were like CPAs or, or, you know, uh, tax lawyers or that type of thing. And then by sophomore year, some of my friends said they had been trading the stock market and they'd been doing this since they were like 15 years old. They had to. You know, means to do that. And so I just started following like the wall street journal, um, joined the stock picking club at, uh, UPenn and really became enamored by the markets. And what I liked about picking stocks is like, you're graded like right there. If you pick the wrong stock. You're going to lose money. And you know, if you do well, then it's actually quantifiable. Um, so I knew I wanted to probably be in a stock picking world. The Allure of Hedge Funds

Tom Hardin: And usually you would go to a mutual fund or a hedge fund.

Speaker: I was really enamored by hedge funds when I was at Penn, these big names like George Soros and Julian Robertson. And to be honest, at that time, I was just looking at how much money they were making. And like, I was really, really driven by that. Seeing these, these numbers, you know, these Forbes lists every year. It's George Soros, Julian Robertson, these big Stan Druckenmiller, these big names in the hedge fund world. Um, but I knew I had to go in investment banking first. Usually you do your investment banking analyst, um, You know, program and then go to hedge funds. I started investment banking in Los Angeles. And after my fourth all nighter, um, as an analyst, low man on the totem pole, the managing director leaves the office, gives you the work at five o'clock that he or she wants on their desk in the morning and you just crank all night. So learning a lot, probably not best for my health and. A couple of all nighters was recruited by a hedge fund. So this is like early 2000. So at the top of the internet stock bubble, um, and started working in hedge funds and became aware pretty early that several funds in my space, I was covering tech stocks, we're getting, Uh, material non public information. So they would trade on what's, what's called inside information. They would get it from either hiring analysts, uh, stock analysts that their hedge funds who had worked at Silicon Valley companies, who would then call back to their contacts, uh, for the information around either upcoming mergers and acquisitions or the corporate corporate quarterly earnings announcements. it was the early two thousands in the middle of the internet stock bubble. When Tom Harden, when Tom Harden started working in the, when Tom Harden started working in hedge funds, pretty quickly he realized that some of the funds were getting. Pretty quickly, he realized that some of his co workers were getting their hands on information that wasn't public yet. We're getting their hands on information that wasn't public yet. They did this by hiring analysts who used to work at Silicon Valley. They did this by hiring analysts who used to work at Silicon Valley. They did this by hiring analysts who used to work at Silicon Valley companies. These analysts would reach out to old contacts to get details about upcoming mergers, acquisitions, acquisitions, and and or quarterly earnings before they were ever announced..

Tom Hardin: So if you know what. Cisco systems is going to do for revenue and earnings per share next quarter. Wall street has estimates. And so if you miss those, the stock's going to go down. If you beat those, the stock's going to go up. So if you have perfect information before everybody else, you can be long the stock, but I think it's going to go up.

Speaker: Or short the stock, but I think it's going to go down. So I know this is going on. Crossing the Line: Insider Trading Temptations

Tom Hardin: That's not really my world in my early mid twenties. I'm a good stock picker. Uh, you know, build my Excel models, value businesses. What are they worth? And I was more of a long term investor. Like one of my investments that I never saw come to fruition was about a year after Google went public.

Speaker: You could figure out looking at that business, that any yellow page stock, there were five yellow page stocks. We're going to go to zero. So you could actually be long. Google is short the yellow page stocks. If I did new other trades, that's all. That's the only chair that would ever have done for my, for my life. Tom Harden was more of a long term investor. But he says that that all changed when he got his second job at a different firm. second job short term investments

Tom Hardin: Um, so that was one position I had. Um, and I, and I love tech because there was always new companies disrupting old companies. So when you're long and short, you can bet on the disruptor and short the incumbents who aren't. Who aren't disrupting or are changing. So I'm focused on investing that way. I know insider trading is going on. felt I had to cross that line until my second firm in my later twenties, my boss made our goals very short term from these one to three year. Investment horizons to monthly. And so he came into my office one day and said, Tom, I know we're investing longer term. You know, we just lost money in the first quarter of our fund.

Speaker: We have to start looking for shorter term opportunities to make money every month, or we may not survive. Now I didn't ask any clarifying questions. Hey, are we going to stay within the legal or ethical guardrails? I just assume anything goes, he knows insider trading is going on. If I were to ever get information about a trade, uh, you know, I'm not even sure at that point, if I would have crossed the line, I would have talked to him. It was really ambiguous, sort of this ambiguous message from the boss to do what it takes. Me not asking questions at all sets the stage for. A few more months goes by, I received a call from a, excuse me, an analyst who had worked for this guy, Raj Rajaratnam, who was probably the most famous guy later to be charged with insider trading in these hedge fund cases. She said, Tom, you'd made me a lot of money over the last few years on some great ideas. I have something for you. You can't tell anybody now that should have raised at least a yellow flag. Like what, what is she about to say? She was always full of rumors. Um, and she said a Moody's analyst. So at the bond rating agency who was roommates with her cousin told her that the company was going to be acquired in a few weeks, here's the date, here's the price, here's the private equity firm. That's very stark. Information. If anybody listening ever gets a call like that, you know, hang up, hang up the phone. That's, that's dark information. Um, to me, it actually set off alarm bells the first time. Like, oh, this actually sounds not like a rumor, like specific information. So in the back of my mind on that first phone call, I said, I'm, I'm not trading this. The First Illegal Trade

Tom Hardin: But later that day, I was talking to a friend at another firm and he's a trader that only got paid. That month, if he was up, he's down. He said, are you hearing anything out there? I can trade. And I said, you know, look, I'm not trading this, but she just called me. I told him everything like right there. I've actually violated insider trading laws by tipping and I haven't even traded yet.

Speaker: I have no idea what he's going to do with it. I sort of viewed that as a gift to him. Like, Hey, you're a friend do with it. What you want. I'm not trading it.

Javier: Right. You weren't making money off of it.

Tom Hardin: Yeah,

Javier: telling him, Hey, I had, I had this meeting with this woman and she just started giving me this information. I don't know if it's true or not, but, but right there you're committing a crime.

Tom Hardin: yeah, exactly, exactly. And that's like the first we talked so much about the rationalizations in the, in the fraud triangle. Like that's, that is the first rationalization. It's like, I'm not trading it. He, if he wants to make money, that's his problem. If the sec were to ever look at his trades, that's on him.

Speaker: Apparently he tells his whole firm, the guy next to him, the big trader at the firm buys half a million shares. I think within an hour, of my phone call. The FBI would figure that out later. Like he would buy these call options, which are leveraged bets on the stock price. And then I see the stock actually starting to tick up and I start to get a little bit of like FOMO, like, Oh my God, these guys, somebody is, somebody is buying this stock. It's starting to tick up every day. A little bit. I know the woman that called me has an enormous position in her account. And then. The guy that I called calls me back and he says, dude, are you in? We're all in, you know, if it, if it happens, this will be amazing. If it doesn't happen, we'll probably won't even lose money. We'll just sell it. Um, and at my firm. So the opportunity to commit the fraud, thinking about the fraud triangle, I could buy a stock in our portfolio and not have to talk to my boss as long as it was less than 1 percent of the assets we managed for clients. So. I remember pulling up Excel and doing what's, what's 0. 9 percent of our assets. And then how much stock at that stock price would I have to buy to get that position in there? And just a few keystrokes right there, putting that position in our portfolio. I've committed securities fraud. Didn't go to the office planning to commit fraud. Didn't have this master plan. How am I going to do this without my boss? Knowing I literally put it in our company portfolio, kind of thinking too, maybe my boss would check me. Maybe he'd say. Hey, what is this new position? What are you working on? I had several small positions on which I'm doing research. Hey, I had an interesting call. I'm going to do follow up. That's very normal. You might sell it. You might buy more. And so it was one of my starter positions and I can tell you, I totally rationalized it. The Slippery Slope of Rationalization

Tom Hardin: With insider trading, it's like, well, I'm just buying it before everybody else. You really feel like there's no victim because who, who am I really?

Speaker: Am I stealing money? I'm just buying it from somebody anonymous in the stock market who sold it to me. Like I'm not hurting anybody. It's not like the visceral feeling may be of a Ponzi scheme where, Oh, I'm stealing your money and doing something else with it. And I know. You know, I'm doing this and it's, and I'm taking your savings. Like I'm just buying it before everybody else. I feel like everybody's doing it. Uh, I said, I'm just taking a flyer. Tom Harden felt like he was just getting a head start. To him, this just seemed like, to him, it seemed like there was no real victim. You know, he was just getting a good spot on the track before everyone else started running. It didn't feel like outright theft, not like a Ponzi scheme where you knowingly take someone's personal life savings, where you knowingly take someone's personal life savings. Insider trading felt more like finding a shortcut that anyone could find. Insider trading felt more like finding a shortcut that others could take if they found it.

Tom Hardin: So it's just like, I'm using a euphemism. Like, I'm not going to say I'm insider trading. Cause that would make me feel bad. I'm just taking a flyer. It's all good. I'll do it one time. So it could extremely poor self talk here.

Speaker: And so often what happens is these rationalizations start to feel. That cycle, you know, just like that, that rationalization engine is, continues to go. I

Javier: kind of at first it was just like, Hey, I got this information, I'm passing it along. And then you're like, well, maybe I'll dip my toes in the water, right? And it's below the threshold, so it's probably okay. And if, and if it wasn't okay, my boss would flag it and tell me it wasn't.

Speaker: At any point, sorry, my dog is in here, sorry. At any point, During this time period, like if you could go back to that day when you were doing the Excel spreadsheet of 0. 9, you know Were you nervous? Like did you feel like you were doing something wrong or were you still thinking everything was cool?

Tom Hardin: was a little nervous and not so much, um, actually of the insider trading. Cause I just felt, you know, these guys must know Roger Rottenham, the big billionaire has been doing this for years. Like it's, to me, I start to rationalize. It's not even being prosecuted. Like people know this guy's doing it. You know, so I guess the sec is a focus on it.

Speaker: So if I were to buy a small position, I would definitely not be caught. So the rationalization started right then calculating the Excel. I remember having a passing thought, like this is just dropping a penny in the grand Canyon. Like this is like, nobody would ever know the small of a position would ever be,

Javier: How much money are we talking about? Like how much when you're doing the 0. 9?

Tom Hardin: So we managed a hundred million dollars.

Speaker: So it's $999,000 position. So it's not, it's not nothing. So it's not in my personal account or anything like that. It's in our, our, our company account. Um, our company fund. So, but compared to the millions of the people we're making, I felt like that was, that was smaller. Uh, and I really was most concerned about, what would my boss say? I mean, it was pretty adventurous of me to even do this because if my boss had the Imal Compass, he would've come in and said, Hey. Where'd you get the information you're fired. Like this is not something do. So it was pretty like forward of me to even think about doing what I kind of calculated while he knows it's going on, everybody's doing it. And if he has a problem, maybe he'll just sell the stock and tell me not to do it again. So

Javier: But

Speaker: in a way, you're actually helping the company out because he told you, Hey, we need, we need some, like some, some money now, right? Not long term. And so, so I'm getting the impression that you're not, you know, typing this stuff and looking over your shoulder and like sweating. You're, you're thinking you're doing something good for the, for the job, right? And the company.

Tom Hardin: Yeah. And that's so often what it is with a lot of these cases.

Javier: how does it snowball from there?

Tom Hardin: Yeah. So it's in the portfolio, maybe a few more weeks goes by. And I remember before the stock market open trading in the stock was halted. So that means news is coming in this company Kronos and. Word for word, it hit the newswire. It was the exact information. So I kept telling myself, maybe this is a rumor.

Speaker: I mean, it sounds like specific information, but she's never called with anything like this. So maybe she was just trying to make herself look interesting with some specific information, but it's really a rumor. And then it hits the Bloomberg, like. The private equity company, the exact dollar amount she told me. And I remember getting a little bit of a stomach turn, like, Oh, oh boy, this is happening. And then that quickly switched to an adrenaline rush. It was a weird mix of feelings. Like now I'm part of this end group, like these guys that are playing this game. Now I have status and the next stock conference I'm going to, where I'm actually going to mention to these guys that I also. Suspect are doing this, like, Hey, I'm part of your group. And in my late twenties, I guess my brain maybe was just fully developed by then, by then or not developed. Like that was like, wow, I'm, I'm part of this illicit end group, but I still had to go to my morning meeting with my boss. And we'd always meet 15 minutes before the stock market opened on the portfolio. Quick, quick review. Is there anything we want to do? The stock is up like 30 percent on this small position. And all he says is, Oh, it's one of those. And it keeps going down. So I'm not getting fired. He's not even asking questions. I'm in the clear. He's my mentor. He's 15 years older than me. And so that just further fueled, like, I'm probably going to do it again. If it's, if it were to happen again, it's not just this once, like he's, he's fine with it and it happens three more times. She calls 0. 9 percent on the third trade. Cause I was kind of like, why is she giving me

Javier: Right. That's what I was going to ask you.

Tom Hardin: not a, yeah, yeah, yeah.

Javier: why is

Tom Hardin: Yeah, just giving you all this a nice friend. Yeah, what a nice friend.

Speaker: And like she had told me over the years, my sort of thematic ideas, like own Google short, the yellow pages that doesn't short term play up with that plays out over time. Like she liked, I guess, me having me in her network for these more longer term ideas, and then eventually on the third trade, she's like, all right, these aren't for free. The Cash Exchange and Escalation

Tom Hardin: If we want to continue this, my source needs 15, 000. And instead of saying, Holy, whatever, don't never call me again. Um, I said, let me figure it out. So the guy that I was sharing it with my friend, I said, here's the situation that this is going to continue. Um, this person wants 15, 000. He's like, I'll figure it out.

Speaker: I guess he goes to the people, gets cash together. And then he meets me at grand central station in New York. Uh, and we go downstairs at grand central, very clandestine. Uh, he, he slides a FedEx envelope of 15, 000 of cash across to me. somehow, Tom Harden had to get all this cash to California. First, the first hurdle was getting, the first hurdle was getting through airport security.

Tom Hardin: And then she's in California. I'm going to a conference the next day to get that to her. And so. I'm going to the airport with this. Um, actually I'll be going to the airport and the taxi and I thought, well, I have to get this through security. Let me go to the bathroom outside security and put it in my chest and my pockets and my socks and those screening machines. So this is 2007. It wasn't like the screening machines today where it circles you, you just walk through those metal detectors, walk right through with the money on my body, went to the restroom, put it.

Speaker: Okay. And back in the envelope, when my flight was called to board, there was actually two TSA agents at the gate back, you know, six years after nine 11, they're still randomly doing maybe checks or having a presence of TSA at gates. And I saw them at my gate and I thought, Oh my God, they totally saw what I was doing in the bathroom with this money or something, and they're going to stop me. So I try not to make eye contact. They stopped me. They take my carry on flip through it. And the female agent looks at the other agent. She's touching, she opens the envelope, sees the cash, and she looks at the other guy and looks at me and says, sir, have a nice flight. So I go to the plane later. Somebody told me it's actually not illegal domestically. to carry that much cash, but

Javier: What does 15, 000 look like? I, I

Tom Hardin: So it was, it was, uh, it was enough to fit my chest, um, in my front pockets, my back pockets and my socks. I had just enough five foot 10, I guess that's like where the surface area it's covered. Yeah.

Javier: Wow. And so you got away with it. I mean, I bet you were sweating bullets.

Tom Hardin: yeah. Yeah. And I was just going to say, Hey, I'm going to Vegas. Cause I was going to California for this conference. Hey, I'm going to Vegas. Um, and then years later, one of my clients, when I'm giving my presentation, he was like, actually, that's not illegal domestically. And his compliance officer was like, how do you know that?

Speaker: So

Javier: Exactly. So, so, wow. So you get the money to this woman

Tom Hardin: And I say, never again, I'm never doing cash payoffs like this again. You won't believe what happened. And she was like, all right, I'll take care of it. And there was a final tip from her that I guess she took care of 0. 9 percent position. So this was over a seven month period. All the four tips and trades were seven month period.

Speaker: Um, my firm, I think made just over a million dollars on these trades and we managed a hundred million. So 1 percent of performance. So we weren't swinging for the fences. We weren't. saying, Oh, Tom had the first one 0. 9%. Let's go 5 percent or 10 percent on the next one. It was all these 0. 9%. But to your point, like it was helping short term performance, which is what my mandate was. The SEC Investigation Begins

Tom Hardin: And at the end of 2007, the woman calls me, Oh my God, the sec has contacted me about one of the trades. And then I thought, what would I say? I had been told by other people, like if the sec calls you, just give them some excuse. Oh, I read an analyst report. That's why I bought it. They have so much on their plate.

Speaker: Just give them an excuse. You know, they'll, they'll hang up and go on. So I was preparing for a call from the sec. I started looking at why I might've bought these stocks at this time, found some analyst reports. This company is cheap. Oh, that's why I bought it backdating my research. So I had a plan and About a few, a few months after she called me, she said she was in New York and said, Tom, we need to have a lunch. I want to go over what I might say. And she meets me for lunch. She's sitting very close to me. And she says, Tom, what would you say if you were ever asked about these trades? And she said, Tom, you know, this was a legal insider trading and she's sitting very close to me. So I suspected she was probably. Wired on me. Um, and this was June of 2008. The FBI Confrontation

Tom Hardin: And then a month later, I'm leaving my apartment to drop off some dry cleaning, step on the sidewalk. And this guy behind me says, are you Tom to FBI agents, dark suits, wallets out FBI, come sit down with us. Um,

Speaker: At the time, Tom didn't think that the woman he met for lunch was wearing a wire, but now that realization is starting to sink in.

Tom Hardin: I didn't suspect she was wearing a wire on me on that time.

Speaker: I was just, I was saying everything she wanted, but now that the FBI, my face, Hey, we know about your four trades. We know that you were just down in Atlanta visiting your baby nephew and they knew his name for his. Baptism that weekend. And my first thought was, Oh my God, you know, my parents are going to kill me. What are they going to say? And then I thought, Oh my God, my wife's going to leave me. She had no idea about the four trades. We just got married young couple. She's going to leave me. And I thought, Holy crap, this might impact my career. Oh my God, it might be going to prison. And I start making implicating statements. Yes, I made those four trades. In fact, there was a cash payoff and the FBI agent pulled his pen out. The Unexpected FBI Encounter

Tom Hardin: He was like, Oh, that's interesting. Go on, go on. So I wasn't playing tough guy. Like prove it, prove it. Which, what do you have? You know, I was just spilling, spilling the beans and they said, okay, settle down, like I was talking for a while.

Speaker: And they said, are you aware this is going on? And I kind of looked at them like, guys, this is rampantly. Going on, you know, everybody's doing it, which is my rationalization. And they said, we think you can help us build these cases. And I took his card and said, should I talk to an attorney? And they said, we'll let you know when you can do that. And they're really not supposed to say that, like when you bring up the term attorney, they're supposed to say, all right, you know, if that's what you want to do, that's fine. So they said, we'll let you know when you can do that. I left, um, Went to the office. My face was totally white. I was late to work, but it was 2008. So my face was white with the worst stock market in 75 years. No red flags. How would he live with this fear, this guilt? He asked himself, who have I become? He heard that two other people in this exact, he heard that two other people in his same exact position who were questioned, who were being questioned by the feds, couldn't handle the pressure and even ended their own lives. A Spiritual and Legal Dilemma

Tom Hardin: Um, went to have a, I converted to Catholicism for my wife to get married a year before. Went to Catholic confession at St. Patrick's in New York on a Tuesday afternoon. Told the priest everything. And he, The weird, I should have talked to a lawyer too, but the priest kind of said my penance was to help them clean up the industry in a weird, he's not a lawyer, but that was kind of my penance.

Speaker: So I look, I look for spiritual guidance before legal guidance first. Becoming an Informant

Tom Hardin: And so I called the FBI, um, two people that they had approached that summer, like me killed themselves that day. I found out later, they thought, Oh my God, my life is over. I can't live with this.

Speaker: Tom Harden took the priest's advice, and he called the FBI.

Tom Hardin: I called them. I was so naive though, still 28. 29. I'm like, what does it mean to help you? I, I'm, you know, I wasn't really connecting the dots and they said, what you're going to have to do is have lunch with us and they brought a little piece of metal that looked like a battery in the BlackBerry when we used to carry BlackBerrys and I'm like, is that a, what is that a BlackBerry battery?

Speaker: And they're like, how naive is this guy? Like, this is, this is a body wire. You're going to have to get people in conversations. Um, And kind of like, by the way, the woman that I know already got me in the conversation and the guy I had tipped,

Javier: So she was wearing a wire.

Tom Hardin: Yeah, yeah, exactly. Exactly.

Javier: Is that how they found you? I just want to clear that up. So they found you because she was wearing a

Tom Hardin: she was wearing a wire and the guy I had tipped, my buddy that I was tipping it to, he got me in a conversation maybe three days before the FBI approached me. Tom, you know this was a legal insider trading, right? And I'm just like, yeah, it was, it was. And so, I'm not even, I'm not even thinking like wired up, like what,

Javier: No, right. Well, you, you don't think of yourself as a criminal,

Tom Hardin: exactly. Exactly. Exactly. Um, you know, and the FBI, even when they approached me, they're like late years later, they would tell me, Tom, you like, you went straight home from work to your wife. There was nothing on the side. Like, you're not a typical guy we track. I'm like, I'm a Catholic, good Catholic guy, family, you know, volunteer.

Speaker: And so I'm not a criminal, right? That's not something that's part of my ethos. And the guy I had tipped off, Got me in the wire too. So my two points of contact who I might be able to help them with, um, both wired up on me. So I said, well, I don't, I don't understand, like, how do I help you? And they said, who are the worst actors? And I start rattling off people who I think their business model is insider trading and they'd kind of nod their heads like, Oh, that's, that's interesting. They wouldn't tell me it wasn't like, do you know XYZ Tom? It was like, tell us. What, you know, and so I mentioned a few guys, they're like, well, do you know them? I'm like, these are 48 year old, you know, centillionaire guys in Silicon Valley. I'm 29 in New York, but I know guys that work for them. Maybe I could say I'm interviewing for a job and like try to meet them and learn about how they do it. And so they're like, that's a great plan. And I start getting meetings at coffee shops with these hedge fund managers. Hey, it's 2008. I'm probably losing my job, which is not a crazy story. It was the worst market in 75 years that I wasn't short enough stocks. And I said, you know, this is, I had to be pretty sure that they were also insider trading. I can't, I can't just start asking them about crimes they committed. If they didn't commit those crimes, really awkward conversation. And it was awkward. Like I'd get to the punchline very quickly. They look at me weird, change the subject. Every time I met with somebody at a coffee shop, the FBI was already there at a table, a few next from me, away from me. I think just making sure I wasn't sliding a piece of paper, like the movie Wolf of Wall Street, where he says, I'm wearing a wire. Yeah. So they wanted to visualize it, but I wasn't doing that. And then I'd wait for that person to leave and then hand the recording device to them. And then. Yeah. Every time they'd say, Tom, you're not doing a good job. Like I'm nervous and filling the silence. And I was like, Hey, it's my first time doing this. There was no training for Tom at the FBI academy. It was

Javier: You're

Speaker: not Donnie Brasco, you

Tom Hardin: yeah, exactly. I've definitely not cut out to be a criminal. Uh, yeah, exactly. So flipping on the mob or anything. Um, But eventually I got good at slowing down, asking questions. There was always silence. And then the person would say enough after a third or fourth meeting, because I try to impress them with the four deals I knew about, and they'd say, all right, you know, young guy, here's a, here's a taste of how I do it.

Speaker: And just that taste of like playing up to their ego. The FBI was like, this is great. Um, stop talking to them. We're going to take care. Of this part, go on to the next, the next guy. Navigating Dangerous Waters Tom did this for two years. He would go to work and have, He would go to work and record all these conversations. He would travel to conferences and record those meetings as well. Being a government It turns out that being a government mole was another full time

Tom Hardin: Um, so it was this way for about two years where I'm still going to work 2008. And I have these conversations, or if I was at a conference in California, set up these meetings and there was one guy who was onto me.

Speaker: I got in 15 conversations. He'd say nothing, always changed the subject. I thought this guy knows he invites me for dinner on a Sunday and he lives outside New York, and And I called the FBI and they get really excited. They're like, this guy wants to have dinner. He's high up our list. Let's do it. They gave me the wire. I took the train out to Connecticut. He picks me up and he's like, Tom, good to see you. I brought swim trunks for you. We're going swimming at my mother's house. So I was not prepared for that. Yeah, the Sopranos is popular. So this is 2007, 2008. Um, and so I go, let's go swimming. We go to this house. He starts rubbing in this room. I excused myself, went to the restroom, took the wire outta my front pocket and put in my jeans and put these swim trunks on. We're walking out to the pool. It's so quiet. I saw a shovel against the house, a hole in the ground. I thought this guy gonna try to kill me or something. We get in the pool and we start playing an awkward game of catch with the tennis ball. He is just pouring it on. And after a few minutes, I just wanted to go home. He's like, Tom, I have to ask you a question. I spoke to an attorney and the attorney says, I have to answer truthfully. I think that was a lie, but I was going to give, I was going to get my cover. I was like, what do you want to know first? And he's like, have you been approached by the SEC? And truthfully, the SEC being the regulator. Um, I could say, no, not the sec. He's like, I just had to make sure you weren't wearing a wire. Sorry about that. He starts confessing everything, but it's not recorded. He's never charged because it wasn't recorded. That was like the moment I felt my life was in danger. Like I'm not a good swimmer. What's going on? Are there other people here? Like that was the craziest part. It At this point, Tom Harden didn't have a lawyer. He hadn't found a white collar support group. He was just winging it.

Javier: terrifying. And so, can you, can you name some of the people that were, um, indicted or charged

Tom Hardin: Yeah. So the, So the biggest names, um, actually I got credit with helping on the Roger Rottenham case, but I wasn't like with him directly because I helped out with people, other people that had worked for him or knew him. I got indirect credit for that. Um, Trying to think a lot of the other names are sealed.

Speaker: Um, but, uh, I was always one off from the major guys. They were going after two people like Roger Rotten and Steve Cohen, and they could only get sort of the employees at SAC Capital. And they got the firm SAC Capital, um, criminally. They, they charged the firm, which is pretty novel thing to do, to charge an actual company with criminal, uh, criminal charges. Um, but they could never, they could never get him. And his story is in the book, Black Edge. It's a great, it's a great read by, uh, An author who sort of pieced it together,

Javier: But I mean, you have this incredible story, you know, of this, you know, you don't come from a crime family. You don't look like a criminal. You don't act like a criminal. Um, but somehow you found yourself in this mess.

Speaker: The Aftermath and Consequences

Javier: And Looking back, I mean, how much money did you personally make? I know the company made a lot of money, but how much money did you personally make out of this whole thing?

Tom Hardin: so the company made just over a million. My personal take as the junior person, if you go down, like what, what did I actually get to that million? It was 46, 000. And at 29 years old, that was the price of professional suicide. When you think about your entire career, potential earnings. 46, 000 really just at the start of my career.

Speaker: 29 was what I threw it all the way for. And I speak at a business school every year for a professor and he always does the calculation. What if Tom had worked 20 years in the hedge fund industry? I'm like, this is going to make me throw up. I don't want to know. And he does a calculation. So say he's an analyst, say he's a portfolio manager and he gets to a ballpark net worth of like 23 million. And so it's important for the students to see that at this business school. Like. And of course they look at me like, well, why'd you do it? I'm like, you're not, you're not thinking about the amount of money you're making. I was never thinking about the 46, 000. It was the status. It was being in the group. Um, being able to stick my chest out. Now I have tips and it was that versus like, Oh, I'm going to make a bunch of money. Cause then if I was buying 5 percent positions, it would feel icky. Or if I was doing it in my personal trading account, that would feel criminal. So it was my fudge factor is Dan Ariely talks about people should look him up. Great Ted talks on the fudge factor. Like my level was, I would go up to 0. 9%. Before I felt really bad about what I was doing. So that was a real big part of it. Looking back now, it takes years to look back and kind of piece it together. A lot of us, but I think at the time, that's what a lot of it was

Javier: What did, what did the professor say you were going to make if you would have gotten

Tom Hardin: uh, Oh, sorry.

Speaker: A 23 million.

Javier: 23 million.

Tom Hardin: So

Javier: it reminds me of the game of life, you know, when you're at that crossroads, whether you want to go to college or you want to be like a blue collar worker or whatever, and you got to like pick that, pick your route, you know, and 23 million, my gosh.

Tom Hardin: it's really like, you know, buying 200 of groceries and then taking a stick of gum and putting it in your pocket and shoplifting the stick of gum at the checkout. It's like, well, what, what is the point?

Speaker: Sentencing

Javier: yeah, yeah. And, and what were some of the other consequences? Did you actually have to do some jail time?

Tom Hardin: Um, I didn't because, uh, I helped the FBI out quite a bit. So they gave me, Um, what's called a 5k letter. So when I was sentenced, they had to list all the bad stuff, but all the good stuff was like pages and pages beyond the, the four trades. And so the cooperation, they did have to redact a lot of names, um, but they gave me a really nice letter.

Speaker: And so because it had taken seven years, that's another thing. It's not like you're sentenced overnight. It's not like law and order where you plead guilty and 48 minutes later, you're sentenced. It's like, it took about seven years. To be sent. After seven long, lonely years of waiting for a judge to determine his fate, Tom Harden looked back and realized that his thirties were gone. In your thirties, that's when your white collar professional career begins to take off. Begins to take off. That's when a white collar professional's career, that's when a white collar professional begins to hit their stride. They move up the corporate ladder. They have a little bit more cheddar in the pocket. They have a little bit, they have a little bit more cheddar in their pocket, but for Tom Harden, that was all

Tom Hardin: And so most of my thirties were gone in terms of professional work.

Speaker: I'd apply for jobs and I'd be upfront about it too. And wherever I got an end, like with a hiring manager, HR would always be like, we're not hiring this guy because we don't want the PR. of hiring him. So it was just a non starter, um, sentenced to no prison because I helped him out. So still had to take the felony conviction. Even to this day, I have a felony conviction for securities fraud. Um, I can't actually have any type of, um, stock trading account in my name. Um, I can trade crypto. So that's interesting because it's not regulated. So I've actually stayed away from crypto other than owning a little bit of bitcoin just for whatever reason. reason, but, uh, I don't trade crypto, um, can't work at any regulated industry, which is interesting. And then I can't even have a checking account in my name, um, because of money laundering lists. So anytime I go to like a big four bank to try to open a checking account, which I've stopped doing, but I, I, kept doing every time I get closed, a banker would finally, finally told me this is a money laundering list that we have. And Thomas Harden is on every AML list in the world as a potential. And I can think like money laundering, like, you know, you're rationalized. Well, that's not that I wasn't laundering money, but that's the way banks. So that's another consequence. If I wasn't married, I'm not even sure how I had a checking account. Marriages end

Tom Hardin: And another thing is 85 percent of marriages. Ended the situation. I've met very few people in my situation going through this, that actually the spouse stays with them because usually the spouse is in it for other reasons. And I'm very lucky. Um, you know, she's kind of the hero of the story staying with me through all this, which never happens.

Speaker: Yeah. and despite all this, Tom and his wife decided to stay together and start a family. In 2009, a year after the FBI approached him about going undercover as Tipper X, their first daughter was born. Four days later, Raj, Roger, Raj. Raja Ratnam, the head of the multi billion dollar hedge fund called Galleon, was arrested.

Javier: Life was wrecked and, you know, and you're one of the few people who can tell your story and, and you came out the other end. Okay. Um, a lot of felons, they don't have a way out in this world. I mean, they can't get jobs, you know, like they, they're pretty much, uh, they have two options. They either become entrepreneurs or they go back to work.

Speaker: to being criminals. In your case, a white collar criminal. But, uh, you know, somebody else could, you know, go back and rob banks. I mean, my, my cousin's, uh, uh, a felon too. And he, he was involved in fraud, medical fraud. And, and so, you know, I've seen it firsthand the struggle that, that felons have. And in this country, there's really no way out. Finding Support and Redemption

Javier: And so, you know, Let's kind of circle back to this whole idea of this white collar support group, because when I heard that I was like, that's very interesting, but I could see why there's a need for that. Like, how did you first come in contact with this support group?

Speaker: That's what people probably don't realize when they think of white collar criminals, they probably think of the 1 percent or whatever, but, but it takes all these in between people to make it happen sometimes. Jeff Grant, the founder of the White Collar Support Group, remembers when Tom first attended the meetings jeff-grant_1_10-02-2024_111932: Tom will tell you he was, uh, you know, he was a wreck. He was, uh, he was unfocused. He, he had just gone through a lot with Operation Perfect Hedge. Um, he did not get, um, get sentenced to go to prison. So, um, and, and in some strange way, uh, although everybody would like to get probation and not be sentenced to a custodial, uh, custodial sentence, um, in some ways going to prison represents closure. And for people who, uh, are sentenced to probation, you'd be surprised how they have their own set of problems. It's like they're out there and they got what they wanted, but it's not a clean bill of health. I mean, the world is still difficult for them. And Tom came in and at the time. He, uh, um, we gave him the opportunity to talk to everybody and to tell a story and kind of out of that wound up growing this idea that he had to become a speaker. And you know, he's, he's a professional speaker now. He speaks all over the world and he's making a living and, um, and he's a tremendous comeback story. And certainly within the White Collar Support Group, we consider him to be a success story. javier_1_10-02-2024_111935: great. Yeah. No, and it seems like he's doing well and really turned things jeff-grant_1_10-02-2024_111932: Yeah. javier_1_10-02-2024_111935: You know what? Overcoming Stigma and Finding Purpose javier_1_10-02-2024_111935: I got only a couple more questions because I know that we're running a little over but White collar criminals a lot of people would say these are the people that the least amount of our sympathy, right? They've been privileged. Uh, why, why should the public want to, you know, have sympathy for this group or for these group of people? Like, what do you say to that? jeff-grant_1_10-02-2024_111932: Well, first of all, it's very misunderstood and underrepresented in terms of advocacy, in terms of awareness. People who are prosecuted for white collar crimes, people who commit white collar crimes have the same issues as people who commit any crimes. You know, it's that there's, there's pathological reasons, there's environmental reasons. In my personal case, you know, I grew up without the lessons that I needed to develop the right kind of character. That's not different really than, um, even people who grew up say in, um, in the inner city, people who might have, um, the kind of commonalities they have there. There's a lot of, uh, uh, people who commit white collar crimes who have mental illness. They have, uh, um, childhood trauma, uh, drug and alcohol addiction. And people are under the misunderstanding that, that, um, we are wealthy. And. It's true that most of us were well off at one point. Um, but, um, we're not by and large, if we're getting prosecuted, we, most of us are not. Well off anymore. Our money's being seized, it's being forfeited, we're spending all of our money on lawyers, our families are breaking up, our children, we're estranged from our children, and I can appreciate, um, why that is. White people don't want to, um, develop empathy for, for, um, people prosecuted for white collar crimes. But the major reason I think is because everybody's got skeletons in their closet and we remind them too much of themselves. They, by, by looking at us. They have to hold a mirror up to ourselves. I mean, what person isn't afraid that somehow something they've done is going to come to the attention of a regulator or law enforcement, and they're going to wind up in the same position as a person who they are potentially stigmatizing or ostracizing for white collar crime. They don't want to look at themselves that closely. And so. If they now I'm clearly I'm an outlier at this point because I've, I've developed a certain amount of, uh, of respect again, um, having been a, you know, a minister and now being being a lawyer. But I've been at parties and social gatherings. You know, I lived in Greenwich for a long time and there are people at those gatherings who wouldn't talk to me. And, and, um, I am sure that the reason that they don't want to talk to me doesn't have anything to do with me. It only has to do with them. And, um, if they come to me for help, I'm happy to give it to them, but it's not my job to, to, try to convince anybody of anything. You know, my job is to, javier_1_10-02-2024_111935: Right. And in a way the question is flawed because the group is not trying to seek the public's mercy. The group is just trying to help each other to find a to be more of a productive citizen, right? Because a lot of people don't. that felons in this country, they, they have very few options, very way, a few ways out. And by turning your back on a, on a felon, you're leaving that person with very few options to succeed. And I think this group is great in a way because you are Trying to capture these people. Like you said, in that moment, when they are fresh out of college, right? Fresh out of jail or something, and they have to start jeff-grant_1_10-02-2024_111932: you know, javier_1_10-02-2024_111935: And that is a very crucial time in their lives when they could either back into the life of crime because they have very few options, or they could start the ground up again. Right. Be the janitor, work your way up. And that's what this group is about, right? It's not about seeking the public's mercy. jeff-grant_1_10-02-2024_111932: No, but, but it's like any refugee community and we are refugees. The, um, uh, and we live in this liminal space where we kind of have one foot in the old world and one foot in the new world. I don't know why that keeps going off. javier_1_10-02-2024_111935: about but just say that we live in a space, just say that part jeff-grant_1_10-02-2024_111932: And, uh, you know, we live in this liminal space where we have one foot in the old world and one foot in the new world. And just like any refugee community, but say Korean Americans, when the Koreans, when they came over and they tried to, um, um, assimilate into, into society, it doesn't happen that well, but at least what they do is they lift each other up and they provide financing and they provide, um, guidance to one another. Same is true with Greek Americans. And javier_1_10-02-2024_111935: Yeah, you, you kind of remind me, I, my family's Cuban American, a lot of Cubans, or any immigrants really, like, you could have, you could be a doctor, a lawyer, or something in your country, and you come to this country, and you have to start all jeff-grant_1_10-02-2024_111932: that's right. javier_1_10-02-2024_111935: You have to be the janitor, and you have to kind of leave that expectation behind, because that's not the reality at the moment. jeff-grant_1_10-02-2024_111932: But as a Cuban American or within that community, you probably know of many circumstances where people who came ahead of you. Help the people who come behind and the big flaw, the big issue within a white collar community is that is that the people who succeed the most what they want to do is they want to exit the white collar community and not pay it forward because they don't want to be identified any longer with our community. And so the, the, the best and brightest or the most successful people who've come back from prison, and let's just say, let's just call them out a couple of them, Martha Stewart or Michael Milliken, there's just some examples. They are not looking to pull up the rest of us with them and try to make life better for them. They're trying to distance themselves from us. And I think that's a shame. Because they really could make a difference, not only in terms of funding and financing, but in terms of opportunities. And I don't know why they don't, I mean, I, I mean, I do know why they don't because they want to separate themselves from us. But I, I, I just don't think that that's a, um, a healthy thing to do because what's happening is, so they're not really dealing with their inner demons. You can't escape the shame just because you have money. You have to work on yourself. And, and so if, if you're a guy with a lot of money and you've come back from, from prison for a white collar crime, you may be accepted into your country club again because you have a lot of money. But believe me, when you walk out the door of the dining room to leave, people are still talking about you behind your back. And. There's no reason it has to be that way. You can lean into it and help others and deal directly with your shame, deal directly with the inner demons. So hopefully one, you don't do it again, but you live a more respectful and healthy life. I mean, what's the legacy you want to leave your children that you were, that you were helpful to others and you helped lift other people up. But not everybody feels that way. javier_1_10-02-2024_111935: Well, and then change what defines you, right? You know, and so comes a question that I've been wanting. Regaining a Law License: A Remarkable Journey javier_1_10-02-2024_111935: I've been curious about this entire hour How did you regain your law license back? I mean, what a what an amazing comeback jeff-grant_1_10-02-2024_111932: Well, what, what, what happened for me is that I was now a minister and I was now a CEO of a criminal justice nonprofit. And I decided that, you know, what people really needed were, was a lawyer to trust. I mean, there was a hole in the market. Because there were a lot of criminal defense attorneys, but there was nobody who had lived experience and really understood all of the nuances of things that were going around, um, in someone's life when they get, uh, um, arrested and prosecuted for white collar crime. Because there's a lot of issues that bankruptcies and, and corporate, uh, uh, corporate dissolutions and divorces and, and all kinds of things going on. And nobody was really focusing on all of that stuff. And I decided, and also, um, The defendants, you know, they weren't really getting served well by the by the structure that was there either by the not served well by their a lot of them by their own attorneys at the criminal defense attorney. So I saw a hole in the market. So I said, you know, maybe I'll try to get my law license back. And I put my application in. And I had to run the gauntlet. And, and here's the crazy thing. I mean, I had worked for 15 years donating my time, volunteering, being a minister, doing all of those things. And I didn't really know that I wanted to get my law license back. I was just Doing what I felt was God's work and putting one foot in front of the other. But when I went to put my law, uh, my law application in and I got interviewed, I had my hearing and all of that, all of that work that I had put in, all of that, all of that service work, all of that volunteer work, that's what they were interested in. You know, they were looking to see if I, I was a changed person and they were, they were shocked that I had been willing to put all that work in for 15 years and not get paid for it. You know, that was the volunteer side of what I was doing. And so it was, it was difficult, but ultimately, um, I think that's what carried the day. And in May of 2021, um, I found out that the, that the court had granted my motion for reinstatement and I've hit the ground running ever since. And so I spend about half my time actually representing clients and maybe the other half of my time still ministering and, and being of service to the White Collar Support Group. Reflecting on Redemption and Legacy javier_1_10-02-2024_111935: and that comeback is Probably what defines you now, right? Not the worst moment in your life jeff-grant_1_10-02-2024_111932: I hope so. It, it, it, I, I can tell you that, um, I'm not without my own demons, right? I mean, this is. This is a traumatic experience, but, um, I, I feel like I've been revalidated on a lot of levels and it certainly, you know, I feel like my children look up to me again. You know, I'm not dad, the felon. I'm not dad, the guy who was in prison. I'm, I'm dad, the lawyer. That's not bad. Um, and, and so that's helped, um, and also, um, you know, it helps to, to now kind of be no longer in a, um, in a low barrier of entry situation. You know, now I'm, I'm back in a high barrier of entry situation where I'm doing things that not everyone else gets to do. And, um, I, I couldn't, I couldn't be happier. I'm, I'm more happy now than I was before all this happened.