Andrew L. Quiat (“Andy”)

Convicted Racketeer: A Story Of Fraud

Decades ago, I was seeking to realize upon a sizeable final money judgment against a debtor named Francis Leo O’Brien, who is a convicted racketeer. He finally went undercover in a deal that he cut with the Philadelphia Division of Division of Labor Racketeering of the U.S. to do undercover work for the government and turn in some of his buddies. Before he did that, we had very vigorous collection efforts. One day, in this lawyer’s conference room, I interrogated Mr. O’Brien. It was just me, him, the investigator and the court recorder. Then we went into a session without the court reporter, which I rarely do. This is what he said:

“Let me explain to you guys exactly what I do so you’ll understand, because you guys are becoming a nuisance. What I do is like a big pyramid. It’s not a pyramid scheme like you think of in securities frauds or Ponzi schemes. It’s just a pyramid. I put deals together and I rip people off, but at the first and biggest level of the pyramid at the bottom, the widest base, is all the people who don’t even know anything is wrong. They just think they are going through a bad business deal. Then we start going up this pyramid where it gets narrower and narrower, and the air gets thinner and thinner. Next, I get a group of people who are suspicious that something went wrong. They may complain that something went wrong, or they may even ‘know’ that something went wrong, but they do nothing. Why do they do nothing? I don’t really care why they do nothing. It may be because sometimes they are embarrassed. They can’t believe it happened to them and they don’t want other people to know about it. The bottom line is they do nothing. So that’s another level of the pyramid that I don’t have to worry about.

Then we get to another level, where people are really upset and they start a lawsuit. They sued me, but it doesn’t mean they are going to finish. It doesn’t mean they are going to go through the discovery and the delays and everything I can do to drag it out. A good number of them will just fall by the wayside. Sooner or later, the case will just sort of fall away. But then we get to the next level, and now you’ve got my attention. You are going to either take a default judgment against me once I stop playing in the proceedings, or we are going to go to trial. I may show up; either way, in the end you’ll get a verdict against me- what you refer to as a final money judgment. For so many people it ends there, because their lawyers have absolutely no idea how to collect a judgment. Sometimes they try and so we get to the next level, which is the level of unartful post-judgment efforts. As you’ve already perceived, there are times when there is really strong suspicion that I am lying under oath to you. That is no sweat off my back. If these people peter out they don’t get very far.

On rare occasions, I bump into people like you. You mount a vigorous, knowledgeable realization effort to collect your judgment out of my hide, you start scarfing up some assets here and there and you don’t stop. So what do I do with people like you?

You know that every seven years I get to file a bankruptcy, and we are at six years and six months now. That’s why we are having this conversation. I know about you Quiat, I’ve checked on you. I know that when we file for bankruptcy, you are going to file an adversary action to bar me from either discharging the debt I owe to your client or to prevent me from discharging anything in a bankruptcy, which is really counterproductive for you. It doesn’t really bother me, because you know I have a lot of other people out there who would like to come after me. I have a fifty-fifty chance of getting rid of all of you in the bankruptcy proceeding. If you prevail and I don’t get to discharge my debt to you after 18 months in the bankruptcy court or thereabouts, you get a fresh hunting license. In the meantime, during those 18 months, you won’t be able to ask me a thing about what I’ve been doing. I’ve gotten to keep doing what I do. So, you get to basically start over with a fresh hunting license. We have not yet reached that point in this case. Should we get to that point and should you continue to persist, I’ll just have to go through the trouble and effort of putting together some other deal to generate some assets from some other folks and get you out of my life. That’s what I do. Do you want to go back on the record and continue the discussion about my assets and such?”

That was Francis Leo O’Brien giving us insight into the mindset of a professional con artist. I have never, in 45 years, heard anyone tell it better. I call it The Pyramid of Fraud.

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