(Read Here for Part 1 - The Muddy Run – How We Found Ourselves Working with a Shady Business and the Lessons Learned)
Last week I started telling the story of how we got involved with a client who only had a passing acquaintance with the concept of ethics, and the lessons we learned from the experience.
It was a traumatic experience, but we figured that things were pretty much wrapped up: I'd chalked up our losses as the price for learning some valuable lessons learned, and figured that I might be able to recover some of the money we were owed, but considered that to be a long shot.
But, well... we were in for a surprise.
How dumb luck led me to discover what fake IDs covered up and background checks missed.
Only a true story could involve this much dumb luck--nobody could ever suspend their disbelief if this was fiction. And that's definitely the case when it comes to how I discovered who the owner of LoziLu really was.
By April or May of 2015, things had fallen apart with LoziLu, and we were owed a lot of money. Not only had several months' worth of services gone unpaid, our credit card was charged by Facebook and Google for advertising fees due to Brad's card being declined (oops). We had also had an employee bail due to the stress of working with Brad, and our productivity was in the toilet. To sum it up, my business had been nearly destroyed. This provided the motivation necessary to investigate whether taking legal action was the best chance at obtaining financial recourse.
I hadn't been able to shake the sense that something was off about Brad. That I was missing something. So one day, I called Brad up and asked for his full name and business mailing address. I told him that I needed the info for billing for a new project he wanted to hire us for... Wait, let me back up a second. Seriously. After all of this, he was still trying to bring us on board for three or four more projects that he had going on, some of them involving multiple investors. Obviously, I wanted no part of any of that, but I wanted to stay on his good side to keep him talking until I had all the info I needed to sue the pants off him.
So I called him up, and while he was usually incredibly affable on the phone--as I've said, he was a slick character--once I asked him for his name and business address, he immediately became very standoffish. His name was Brad Peters (duh!), and we "had his info from before." But something about how he replied struck me as suspicious. His tone and demeanor were wrong. So off to Google I went!
Let me just say that I pretend to be a master at using Google--I mean, I do run an SEO company after all--but honestly, most Google searches are either pretty straightforward or just random shots in the dark. This particular search was the latter. I had his business mailing address, but I wanted to know where he was. I knew he lived somewhere in Minnesota, so I started off by typing in "Brad Peters Minnesota," hoping to find a home listing. One of the top results was this result from Whitepages. The meta description for the result ended with this: "Age:45-49; Current:Kellogg, MN." For some reason, this particular listing caught my eye, so I took this crumb of info and ran with it.
My next search was for "brad peters kellogg mn." And one of the top results at the time was an article in the Grand Rapids Herald Review, titled "Colorado man enters guilty plea in wild rice swindle case." The article had nothing to do with anyone named Brad Peters, let alone a Brad Peters who lived in Minnesota. This was about some guy named Frederick Bradley Kellogg who lived in Colorado.
But as I read the article, I got this eerie feeling that I just couldn't shake. I dug further into the incident and found this article which quoted Kellogg as saying, “[Y]ou will be paid. I know I’ve said that for two years, but you will be paid.” The way this guy acknowledged that he had repeatedly screwed up, but this time would be different... it felt like my Brad Peters.
So deeper I went. By the time I found the arrest photo of Frederick Kellogg from the Itasca County Sheriff's office, I felt pretty confident that I had put two and two together. Between the familiar sounding articles, the recollection that the Brad Peters I knew had family in Colorado (he had mentioned this in personal conversations), and the photo, which looked exactly like how I had pictured him, I felt like I had something.
But what next? How could I prove a connection? The guy I knew went by Brad Peters. I had asked the people who sold LoziLu to him if he had signed contracts with that name, and they said he had. He even had an ID with that name. On top of that, according to the grapevine, he had convinced a large national company to loan him six figures!
I actually called up the company and informed them of Brad's real identity, but the rep cut me off as I explained the situation and told me that "legal was looking into it." I kept asking myself, how does somebody with a criminal history, convicted of felony theft, serving probation, and ordered to never get involved in a scheme like that again, get approved for a loan to run a business? And how did I, with about 20 minutes of Googling, come up with all of this (admittedly circumstantial) evidence that something wasn't right?
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How I confronted Brad, got the confirmation I wanted... and then immediately backed off (because I'm not very smart).
I've previously mentioned that I seriously screwed up in a number of respects in my dealings with Brad. I had sat on my hands too long and allowed others to get hurt.
Despite all of this, even at this point, I couldn't quite suppress my streak of optimism and idealism, and I couldn't let go of the idea that maybe there was a chance I was mistaken. Even when I have evidence to the contrary, I like to take people at their word. Stuck between the conviction that Brad Peter was really Frederick Bradley Kellogg, and the belief that I was making something out of nothing, I finally picked up the phone and called Brad, and after a few minutes, brought up what I had found.
"Hey Brad, I ran across this article the other day."
"It's about this guy with a name similar to yours in Minnesota, who had been convicted of swindling businesses. I just wanted you to know, in case there's some confusion out there..."
"I mean, it's funny how it's got the Colorado and Minnesota connection, but I'm sure it's nothing."
Another pause. "So what? I messed up. Are you threatening me?"
"No, I just was wondering..."
"If you interfere with commerce, that's a major crime. I will have my lawyer involved and we really don't need to sour our relationship like that. It's a big deal interfering with business and could cause serious issues. Look, let's just keep working together and getting things running with LoziLu. I like you, you are a good guy. And I'm going to bring you a lot more business..." and on and on.
There it was! He had admitted it! He had blurted out the truth! And what did I do? Nothing.
Brad, to his credit, is a smooth talker. He can make you feel great about yourself and get you pumped about the potential for the newest idea that he has. He's likable, and he's got the perfect personality for making you want to do business with him. For a long time, I honestly believed much of what he said. He was just trying to run a business. He hadn't intentionally screwed people over. Things had just gotten away from him a bit.
And that's how I kept tripping myself up. Even after he confirmed his true identity, a big part of me was convinced that he was just trying to run a business, and with better management and organization things would be fine.
Of course, I was also a little scared by the whole "interfering with commerce" thing. I backed way off while I spent some time making sure that pushing the issue wouldn't bring even more headaches and issues on my near-failing company. Some research turned up the law in question that Brad had alluded to:
18 U.S. Code § 1951 - Interference with commerce by threats or violence--also known as The Hobbs Act. This law deals with extortion and interference with business. But this doesn't include disclosing actual identities to other parties. As long as I didn't threaten anyone, or try to profit off my knowledge, I was fine. But still, I laid low.
It wasn't until more victims kept popping up that I realized I needed to say something. And by then, I had help.
Some time in June or July, after having worked with and heard stories from others who had had bad dealings with LoziLu, my conscience got the best of me.
By this time I was in communication with Bethany Glenwinkel of Velvet Iron Fitness, whom Brad had hired to help promote LoziLu in her area. She was great person, hardworking, and honest. And she was being screwed by Brad. I also knew of a couple other people in the same boat (Bethany was the only one I was able to reach about this article to get permission to mention her), and I genuinely felt sick, knowing that they'd never be paid for their hard work.
So I finally spilled the beans to them (I also contacted the company that was managing LoziLu's race registrations and informed them of Brad's true identity). Bethany, to her credit, was awesome. She was the brave one, not me. I told her that I didn't feel comfortable becoming a crusader, but I would support her in any way possible. She immediately took the truth and ran with it, alerting many of the people working with LoziLu, as well as a number of media outlets.
One such outlet, which was the most determined about uncovering and publicizing everything that LoziLu had done, was Obstacle Race Media. I believe they were the first site to break the story of LoziLu's troubles in their article from July 28th, Say Goodbye To Lozilu Women’s Mud Run? The author, Matt B. Davis, did a fantastic job of staying on top of the story, and really served as a champion for the runners who were unknowingly being victimized by Brad and LoziLu.
I also contacted Brad's probation officer (he's serving more than 20 years of probation due to his previous bad dealings) and let her know that Mr. Kellogg was up to his old tricks again, and doing business under an assumed name as well.
This was the beginning of the end for LoziLu, and ultimately, Brad/Fred Kellogg. I'll let the various news headlines tell you where the story went from there:
Lozilu Denver Mud Run Canceled, Women Who Wanted to Take Part Are Pissed - August 5th, 2015
FOX 29 Investigates: Canceled LoziLu Mud Run, Operator's Track Record - August 18th, 2015
Mud-race organizer runs trail of debt: Charity waits for funds as history of theft surfaces. - September 22nd, 2015
And lastly, Swindler to serve 30 days on probation violation - February 16th, 2016
That's right. Brad is--as of the time this article has been posted--sitting in jail for his crimes. As it turns out, not only did he swindle countless businesses and individuals, he also took advantage of charities, employees, contractors, artists, people who just wanted to share a muddy day with friends, and even his own family. He currently owes creditors more than $2.6 million from 60+ judgments going back to 1993.
While it took my business some time to recover from everything that went on, we did recover. But I can't help but think of all of those businesses and individuals who spent countless hours and resources trying to get LoziLu to succeed. I know that Brad took advantage of many people who worked for him on the promise of getting paid, as well as others who offered their time and loaned equipment. To all of those people, I am sorry. It took me far too long to reveal what I learned and I could have saved you a lot of time, money, and heartache. I was selfish in looking out for my own interests (mostly, not wanting to get sued), instead of considering all of the people who were in the same position as I was.
So what did I learn?
Always be thorough in researching your clients. Always be honest and think of how others are affected by a situation. And never underestimate the power of Googling.
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