A Master Conman in His Own Words

0:08Hello? My name is Paul Regan. I'm the CEO and founder of Next Level Holdings. How are you?

0:15Ryan Knutson:This is the voice of Paul Regan.

0:21This is Paul Regan, chairman and co-founder of Yield Bank. How are you?

0:25Ryan Knutson:Regan ran two investment firms. And he spent a lot of time on the phone, pitching prospective clients. This is Paul Regan with Next Level Holdings. How are you? Hello? Yes, good morning. My name is Paul Regan with Next Level Holdings. How are you? I'm good. Okay. So we have a call book today to go over your retirement income protection. What does he try to get these people to do? Trust him. I'm here to see if I can clear up any questions you have, answer any questions you have, and give you comfort, explain the product. If you have a couple of minutes, I'd like to do that. What Paul Regan had to offer sounded pretty amazing.

1:11Ryan Knutson:An investment with a guaranteed return of 10 to 15%. And not only were the returns really high, he said there was no downside. Let me be very clear. There is zero risk of loss here with a guaranteed annuity that pays up to 15 % per annum. Okay, sounds good. That's a pretty high percentage, isn't it? It is.

1:42Ryan Knutson:Our colleague Jason Zweig has been writing about investments for decades. When he caught wind of Paul Regan and what he was selling, Jason wanted to know how Regan got people to fall for this pitch. Offerings like this are very common. The reason it's a cliche to say if it's too good to be true, it probably is, is because there are a lot of offerings in the financial industry that sound too good to be true and are too good to be true. And this was one of them. Jason says that Regan's clients were often in dire straits. They had health problems. They were retired or getting ready to retire. And Regan was really good at building trust with them.

2:23These people were ripe for the picking. I've also started to become a bit cynical in my old age. But I think no matter how cynical you are about the financial industry, maybe you're not cynical enough.

2:43Ryan Knutson:Jason has covered many scams and frauds in his career. But not one like this. Because as Jason investigated Regan's scheme, he obtained dozens of recordings that gave him a rare look at how this scam actually played out. A portrait of a con man and his victims. He's listening for people's points of vulnerability. Let's give you the benefit and the blessing of feeling that security. feeling that security the moment the first payment comes. And once they started to talk, he would pick up immediately on whatever made them potentially vulnerable. This product was built for someone that did not want to ever consider the possibility of risk.

3:40And that was what he then would talk about, and that's how he got them on the hook. I gotta tell you, you've touched my heart with the use and with the need. I can't think of anybody more deserving.

3:55Ryan Knutson:Welcome to The Journal, our show about money, business, and power. I'm Ryan Knudsen. It's Monday, July 13th.

4:06Ryan Knutson:Coming up on the show, a portrait of a master conman in his own words. and how he was eventually brought down.

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5:30Ryan Knutson:Jason started looking into Paul Regan in 2024. It started with a very simple tip. Someone had heard about this investment he was offering and suggested Jason look into it. So he started poking around. The first story we ran, which was in August of 2024, essentially just asked a bunch of questions like, huh, really? What's going on here? And, you know, the extremely high returns didn't make sense to me. The guarantees and the insurance didn't really make sense. That article opened a door. Agents who sold investments for Regan started reaching out to Jason. One of the people who contacted me after my first article ran was a salesperson who had recorded a video of one of his calls with his sales force, sort of the equivalent of a Zoom call, and said there's a lot more of this out there.

6:38Ryan Knutson:The salesperson told Jason that Regan also recorded his calls, a lot of them, and he often shared them with the agents that sold his products. With that lead, Jason was able to find other sources who had more recordings. And those recordings, along with conversations with people involved, helped Jason get to the bottom of what happened. It's unclear when exactly Regan started this scheme, but Jason learned that he was running it from outside the country. Regan lived in Columbia. So tell me about the story of this investing scheme. How did it get off the ground? So Regan promoted himself online extensively as a financial expert.

7:20If you visit the website, again, I don't know how long you spent perusing the website, looking through it, but I've got some pretty impressive credentials.

7:31Ryan Knutson:On his website, Regan flaunted the supposed awards he'd won. And on the phone, he told prospective clients about his deep years of experience. I've taken companies public. I've made large deals with large insurance carriers. And that's why, you know, I was successful in doing this. This year, I'm actually the investment advisor of the year by Wealth and Finance magazine. I'm a Wall Street veteran with industry, you know, inside secrets. His story about his impressive resume was generally consistent, but the details sometimes varied. I head up the alternative investment division at Citigroup. For six years, I had 218 guys under me.

8:18I had 264 guys under me at Citigroup. I ran the alternative asset division. You know, I worked at Citigroup.

8:27Ryan Knutson:I had 247 guys underneath me. Citigroup told Jason that it had no record of Regan working there. Regan ran two financial firms, Next Level Holdings and Yield Wealth. And he had an army of insurance agents who worked on his behalf. These agents primarily sold annuities, financial products that are generally targeted at older people. He offered extremely high commissions, and that was how he built a sales force. And these people were independent. They weren't employees of his, but they worked for him. And eventually, many of them sold very little other than his products because they were so lucrative.

9:10Ryan Knutson:Once these agents were on the hook, enticed by the potential for high commissions, they then introduced Regan to their existing clients. And many of these people were introduced to Paul Regan through an insurance agent or other financial salesperson they already knew and trusted. And most of those insurance agents and salespeople trusted Paul Regan because he had won their trust. Who were Regan's targets for these investments? So the ideal demographic for him was somebody who was older, typically 55 and up, who had at least$100 ,000 in assets. So you're older. You do have some accumulated assets.

9:57you're not wealthy and you might have some major health issues and the phone rings. And it's a friendly agent or it's Paul Regan himself describing this insured, riskless, guaranteed return of 10 percent or more. I mean, there aren't too many opportunities to earn a 10.5 percent yield with full insurance protection. So, you know, it's a smart play, especially now. And if you're struggling to make ends meet or you would like a little extra income that isn't risky, it was like a dream come true.

10:40Ryan Knutson:What did he say that these investments were in? Like what was he supposedly doing with this money? So his explanations of what he was doing were extremely complicated and very difficult, I think, for anybody without a financial background to understand, which I think was part of the point. Regan explained that there were two elements to his investment strategy. The first was gold. He told clients that he owned, or sometimes even operated, gold mines in Colombia. We're actually trading the tangible bars of gold. So we have relationships with mining operations, mostly through Latin America, specifically Colombia.

11:24Ryan Knutson:Regan said that he was able to buy that gold wholesale below market price and then sell it at a markup. Every gram, every kilo of gold that they're able to pull out of the earth, they have to sell it to us at a discount of 2 % below London fixed price or spot price.

11:47Ryan Knutson:The other piece of his investment strategy had something to do with buying and selling health insurance policies under the Affordable Care Act. His explanations of this, if you listened carefully, would have been extremely hard to follow. So using small numbers, for$50 ,000, we're able to acquire 208 policies. 208 policies will make net about$25 per month. Now, that money is paid to us through UnitedHealthcare. When I called the Department of Health and Human Services, they couldn't even understand what exactly he was claiming to do. But for people who didn't know that much about the insurance market, it sounded plausible.

12:36On the phone, Regan was really convincing. He has a very soothing, deep, soft voice. All right, so we could do a Q &A format or I could just talk. I'd rather do Q &A. That way I know exactly what information you're trying to glean from the call and I can answer all the questions one by one. So his tone is that he's your friend? And you say you don't have the faith. You've got the faith, brother. You just got to believe it. He values that you've been a hard worker your whole life, and sometimes you struggle to make ends meet, and he's here to help. Well, I can tell you this. Not only will you not lose your money, but in recognition of how hard you worked for it, I want you to remember something.

13:30Your money is going to work twice as hard for you as you ever did for it.

13:35Ryan Knutson:So if a client was hesitant, what kinds of things would he say to try to close the deal? He would reassure people in very creative ways. Reagan explained that his investments were completely safe because they were insured. And he had a favorite metaphor to soothe nervous clients. Do I have to disclose risk? I mean, theoretically, could that happen? Sure. I mean, is it likely? I think you have a better chance of being stepped on by a dinosaur, if I'm being honest. For that to happen, you may have a better chance of being stepped on by a dinosaur. maybe a better chance of being stepped on by a dinosaur.

14:12Right. This product was built to be a guaranteed product.

14:17Ryan Knutson:And if Regan ever sensed that a potential client was religious, he'd pounce on that, telling them that he was a man of God. It's beyond my fiduciary responsibility. It's my godly responsibility. So, look, everything I've told you is true. And he would say things like, bless you or... God bless. Or I feel blessed to be able to help you. Honestly and truly, this is a blessing for me because having the knowledge of the fact that you need it, you know, makes it that much sweeter, that much more of a blessing for me, knowing that I can, you know, come through for you and be your deliverance.

15:08Ryan Knutson:One of Regan's targets was a 75-year-old disabled Vietnam War veteran. Hello. He was hoping to invest his money with Regan so he could pay for the care of a family friend who had dementia. My name is Paul Regan. I'm the CEO and founder of Next Level Holdings. How are you? I'm good. How about you? I'm good. This potential client had$600 ,000. But in my mind, is it too good to be true? And it kind of scares me because it's a big responsibility for me to invest for$600 ,000 to be able to pay for her nursing home. I understand. Here's the reality. You're absolutely right. These concerns are well-founded.

15:50Anybody that doesn't take some form of pause and question something like this isn't really doing themselves any good. I mean, you're talking about, you know, making sure that some woman somewhere has, you know, what she needs in her retirement for nursing reasons. I assume this woman can't take care of herself and she needs assisted living. Yes, exactly. Yeah, I mean, first of all, the kind of person that would hear that and then put you in a situation where, you know, there's risk. I mean, there's a special kind of hell for that person. There's a special place in hell for that person. And he said it so sincerely.

16:43Ryan Knutson:Regan made the investor feel more comfortable by sweetening the deal. — Because we're talking about generating income to pay for assisted living, let me see if I can pull a rabbit out of a hat. Let me see if I can get it, instead of two years, let me see if I can get it extended for five. — Regan explained that the monthly returns from his investment would go straight into his bank account. — It's going to be, yeah, it's going to be direct deposited right into your account. break the positive, then I can use a debit card to transfer it to her account. That's correct. And then monthly pay the monthly nursing home bill.

17:25Correct.

17:28Ryan Knutson:The Vietnam veteran ended up investing all of his$600 ,000. Amazing. Amazing. And thank you for your service. I know Memorial Day was last week, but happy belated, Ben. All right, Paul. I'll talk to you soon. Okay, God bless. All right, bye. Take care. When Regan was on the phone with potential clients, he was charming and kind. But he didn't sound that way when it came to those insurance agents who sold his investments. This f***ing prick, this f***ing sucker, this waste of human f***ing skin. When he called, do you know what he said? He said that he was shocked to learn. That, and how Regan was brought down, is next.

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19:26Ryan Knutson:Most of the people that worked for Regan were insurance agents and didn't have much of a background in investments. This is actually why Regan recorded so many of his calls so he could show them to his agents and they could learn how to be persuasive like him. He was recording himself primarily to create training materials for his sales force. In fact, many of the agents knew very little about investing, which is what Regan wanted. Here he is talking about them with a colleague. These people that aren't sophisticated, including my agents that have, like, some of them, 82 IQs, I'm not responsible for what they say.

20:08You know, you know what I'm talking about. We've laughed about how overwhelming it is to have to deal with this level of ignorance, this level of stupidity.

20:20Ryan Knutson:Did Regan ever ask them to do anything illegal? He asked them to do things that were illegal without telling them that they were illegal. Regan had these agents selling what was theoretically a security, which would technically be regulated by the SEC. Most of these insurance agents weren't licensed to sell securities, though, meaning they couldn't legally sell them. And because almost all of them were insurance agents who had never worked in the securities industry, they didn't realize that they were being asked to do something that was illegal. Regan's sales chief was a man named Jonathan Guzman.

20:59— I wouldn't, like, hide anything or twist anything.