An Inside Look at a $63M Sales Fraud

Good Morning. If coffee is no longer getting you through the workday, apparently the next step is rocket fuel in a pastel can. A WSJ reporter replaced her daily lattes with energy drinks for a week and said she nearly lost her mind. A can of Celsius packs 200 mg of caffeine, which is roughly two cups of coffee in the same amount of time. In other words, it may be the closest thing sales reps have to legal PEDs. One can, 100 cold calls, and the sudden confidence to follow up for the seventh time. Now, let’s get into today’s Follow Up. (:

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This story reads like a Hollywood sales movie.

Wild company retreats. Sales scripts that worked way too well. Money hungry reps. And $63 million taken from everyday people.

Paul Regan sold an investment that paid 12% to 15% a year. Guaranteed. (At least that’s what he told prospects...)

The sales pitch was that he ran a gold mining operation in Colombia and also bought cheap health insurance policies on the side. Two boring machines that printed money. And he said Lloyd's of London had it all insured, so it was risk free.

But of course, there was one big problem…None of it existed.

Regan ran two firms, Next Level Holdings and Yield Wealth.

Next Level sold "Principal & Interest Protected Guaranteed Notes" paying 12% to 15%.

Yield sold "Mega High Yield Term Deposits" paying up to 10.5%.

(Yes, those are the real product names.)

He hired dozens of sales agents and paid up to a 15% commission on the funds that agents convinced people to ‘invest’.

But you might ask, what happened with all the money they ‘raised’ from these leads?

Prosecutors say he never made any real investments with the money. He used the money from new investors to pay out old ones.

In about two years, more than 300 people handed over $63 million.

Regan recorded his own sales calls so he could upload them to a shared Google Drive and train his agents how to sell with them.

Which is great sales training, by the way. Record your best calls, hand them to new reps, let them steal what works. Just skip that step when the product is illegal.

(Btw, our sponsor Granola handles the recording and the notes for you. It’s what I use every day.)

And because Regan recorded his sales calls, we don’t have to guess what he said to close these clients. We’ve got the game tape.

On one call recording, a 71-year-old woman told Regan she worked two jobs, and nothing was ever given to her.

Regan told her: "Not only will you not lose your money, but in recognition of how hard you worked for it, I want you to remember something: Your money's going to work twice as hard for you as you ever did for it."

Despite that sales pitch sounding like it was pulled straight from a Wolf of Wall Street script, she invested a little more than $150,000.

On another recording, one guy asked him straight up if this "could be one of those Bernie Madoff things?"

Regan told the guy: "I have to tell you that there's risk. But at the end of the day with insurance wrappers and protection, y'know, it's the same risk that we have of, y'know, being ripped apart by a saber-tooth tiger or, y'know, stepped on by a dinosaur."

That guy wired Regan $600,000.

Regan and his partner recruited insurance agents who were deep in debt, then sold them leads to call for about $1,800 per batch of 20.

Most of these reps had never sold securities before, and weren’t exactly the sharpest tools in the shed.

Regan even said, “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.”

And like any good boiler room sales story, there was a wild sales kickoff.

In March 2024, the agents flew down to Medellín for a 3-day offsite.

They held gold bars and sat through motivational presentations. Then they threw a party that lasted more than 12 hours and included throwing the entertainers into the pool.

But all good things have to come to an end. And six months after this wild party, the company came crashing down.

You can read the official statement from the SEC here.

I can't help but think about the other version of this story.

If Regan had pointed all of this effort at a real business, he'd probably be just as rich. The sales scripts, objection handling, and team bonding. All of that stuff can make a sales team unstoppable, as long as there’s a good product behind them.

Same goes for his reps. If you're hungry enough to learn how to sell a bad product, you're hungry enough to learn how to sell a good one.

But at the end of the day, this type of story is nothing new. We covered a $13M sales scheme in 2023 and a $300M fraud from 2020.

The names, products, and people change. But the human nature behind all of them is pretty similar.

This won't be the last Ponzi scheme we see.

So a warning for reps. If the product you're selling sounds too good to be true, it probably is. Same goes for the job you're getting recruited into. If the comp plan is way better than everything else out there, ask why before you sign.

Today’s newsletter was written by Nic Conley