The bourbon distilling industry in Kentucky is rich with tradition, which includes employees helping themselves to bottles of rare whisky whenever they feel like it. In this episode, Caleb and Greg discuss the infamous caper known as Pappygate. Booze, guns, steroids, slow pitch softball, and …horrendous inventory controls.
Thank you to our sponsor, Xero
To learn more go to http://ohmyfraud.promo/xero
HOW TO EARN FREE CPE
In less than 10 minutes, you can earn 1 hour of NASBA-approved accounting CPE after listening to this episode. Download our mobile app, sign up, and look for the Oh My Fraud channel. Register for the course, complete a short quiz, and get your CPE certificate.
Launch the course on EarmarkCPE to get free CPE/CE for listening to this episode.
Download the app:
Questions? Need help? Email email@example.com.
- Inside the Great Pappy Van Winkle Bourbon Heist - thrillist.com
- The Real Story Behind “Bourbon King” Toby Curtsinger from Netflix’s Heist - menshealth.com
- How a Kentucky Dad Pulled Off One of the Biggest Bourbon Burglaries in History - bustle.com
- Netflix documentary series Heist
The bourbon distilling industry in Kentucky is rich with tradition, which includes employees helping themselves to bottles of rare whisky whenever they feel like it. In this episode, Caleb and Greg discuss the infamous caper known as Pappygate. Booze, guns, slow pitch softball, and …horrendous inventory controls.
Creators & Guests
What is Oh My Fraud?
"Oh My Fraud" is an irreverent podcast from CPA/comedian Greg Kyte and blogger/former CPA Caleb Newquist.
The two come together to unpack their favorite frauds and explore the circumstances, psychology, and interpersonal dynamics involved. They also fully indulge in victim-blaming the defrauded widows, orphans, infirm and feeble-minded—because who can resist?
If you fancy yourself a trusted advisor—or prefer your true crime with spreadsheets instead of corpses—listen to this show to learn what to watch out for to keep your clients, your firm, and even yourself safe.
[00:00:00] Earn free CPE
Blake: If you'd like to earn CPE credit for listening to this episode, visit earmarkcpe.com, download the app, take a short quiz, and get your CPE certificate. Continuing education has never been so easy.
And now, onto the episode.
[00:00:24] Introduction and Caleb's old work story
Greg: Hey, everybody. Welcome to another episode of Oh My Fraud. We got a true crime podcast, but our bad guys fill duffel bags with cash, instead of filling them with severed heads. And today, we've got one of my favorite fraud stories of all times. It involves booze, guns, steroids, and softball. So, hello and welcome. I'm Greg Kyte.
Caleb: And I’m Happy van Newquist. Pleasure to be with you, Greg.
Greg: Caleb van Newquist. So, we're just gonna- we're just gonna dive right into it, with some real talk. So, I need to know, what have you stolen from work? Like, it doesn't have to be your current employer, but I want to know what you have stolen from a job. And I- and I'm talking like items, not money, and it can be little or it can be big.
What have you stolen from work?
Caleb: Okay. So, you- since you're just a regular guy, I don't believe I can invoke my fifth amendment privilege.
Caleb: And I don't know what the statute of limitations are on these things. So, maybe I'm wandering into a legal gray area, but spirit of good podcasting, I'll answer your question. So, the first thing I remember stealing from a employer was beer. Oddly enough, this is a show about hooch.
Greg: That’s awesome.
Caleb: Yeah. I worked at a steakhouse. I- it was like my first job, I was a dishwasher. My buddy's dad owned the place. I was 16. He was nearly 16, and we liked to party. And getting beer wasn't always easy. And so, you know, it was our option of last resort. It just so happened that we used this option a lot.
And so, yeah, that is- that was a thing. And then also, when I was in college, I worked at a beer wholesaler or distributor, and that was, you know, it was more beer than I'd ever seen in my life. I mean, to this day, except for maybe the Cruz Brewery- a lot of beer there. Anyway, the point is, occasionally- and you know, the guys- the other guys that work there too, you know, the sales reps and the manager of the warehouse and stuff, they would take beer home with them.
And so, we would occasionally, you know, take 6 packs or 12 packs or cases or whatever.
Greg: Yeah. yeah.
Caleb: So, yeah. And I mean, that was, you know- I mean, in the technical definition, stealing. So, there you have it. The rationalization was very easy for me because I felt my employers were getting way more than their pound of flesh out of me.
Greg: Yeah, yeah. That's awesome. And that's- well, first off, it's wild how closely that your little stories there mirror the case that we're going to be talking about today, just that you are much smaller scale than what they were.
[00:03:11] Overview of episode
Greg: So, Caleb, in this episode, we're going to tell the story of Toby Curtsinger and his nine buddies, who pulled off the biggest bourbon heist in the history of bourbon heists. And people call it Pappygate. And the reason they call it Pappygate is because one of the types of booze that they stole was called Pappy van Winkle, which is a very rare, very expensive whiskey.
And yeah, so, they call it Pappy gate. And I'll tell you, before we even launch itno this, I hate whenever anything is called like, something gate. Drives me up a wall. But we will not be calling that here because I hate it. But here's what happened. Like, I gave the broad strokes. These guys stole a ton of booze from their employers.
Caleb: Wait, wait, wait, wait. Where are we- where's this happening? Set the scene, Greg. Tell me what- tell me where we are.
Greg: So, this is happening in Frankfort, Kentucky, which I believe is- is that the capital of Kentucky? Frankfort?
Caleb: It is.
Greg: I should- it is. Frankfort, Kentucky, and it- the primary epicenter of this fraud was a place called the Buffalo Trace Distillery. However, there's also a Wild Turkey Distillery in the same city, and there was some booze that was also stolen from the Wild Turkey Distillery as well.
And what happened? So, the scope of this embezzlement of booze, they started stealing the booze in 2008, and they got busted in April of 2015. That's when Toby Curtsinger was arrested, was April of 2015.
Caleb: So, they had a good run. Good run.
Greg: They did have a good run. And we were talking about this, it's funny to try to- as the media tried to quantify how much booze was stolen, like the dollar value of the booze that was stolen because a lot of the stories say it's like- like, a lot of them say over 100,000 dollars’ worth of bourbon was stolen. And then some say it was $200,000 of bourbon, and then others say it was well over a million dollars’ worth of bourbon.
And you, the people you looked at, how much did they say was the dollar value of the bourbon that was stolen?
Caleb: Yeah. So, a journalist who covered this story for the state journal, I believe- which is like the Frankfort Paper- he had a blog called On The Bourbon Trail. His name's Brad Bowman. Did I say his name? I didn't say his name.
Greg: Nice. No, you did.
Caleb: Brad Bowman. And on his website- and he covered this story the whole time it was going on- his blog said it was an excess of a million bucks, the value of the booze.
[00:06:02] Beginning for Toby Curtsinger at Buffalo Trace
Greg: So, in Frankfort, Kentucky, this Toby Curtsinger fella, he started working for the Buffalo Trace Distillery in 1988. And he tells the story about, I think it was on his first day on the job, his first shift, that at the end of the shift, some coworkers, some of his brand-new coworkers that he just met that day, ushered him into a back room of the distillery, and everybody was dipping plastic cups into basically, a barrel of White Dog Whiskey and they were passing it around.
And it was almost like- this is what Toby Curtsinger says, is that A, it established that it was part of the culture to help yourself to the booze. But B, it seemed as though he felt like the other employees were testing him to try to sniff out if he was a narc or not. Because it's like- and almost like, if you- if on your first day, you steal some booze with all the other guys, you can't narc them out because you'd have to narc yourself out because you also stole the booze.
So, from day one, it was pretty clear that the Buffalo Trace Distillery was pretty fast and loose with their inventory control. Agreed?
Caleb: Agreed. He establishes himself at the distillery for many, many years with no untoward behavior whatsoever, but then-
Greg: Not necessarily. Because again, in Curtsinger's own account, it was- it's similar to what you said about when you worked at the beer place. That a lot of times, people at the company could just take some beer home. And it was similar at the Buffalo trace distillery, where people would take a bottle here and a bottle there. Didn't seem like it was a company policy where once a quarter, you got a, you know, a 750-milliliter bottle of hooch.
But it was just like every now and then, you just wanted one, and you pocketed one, and you walked away with it. So, yeah, it seemed as though he would take some from time to time, throughout his career. But here's when things started to get real was in 2003, Toby Curtsinger was assigned to a warehouse. And it was the specific warehouse where they were storing the reject whiskey.
So, for whatever reason, it didn't pass quality control and they have this flunky whiskey warehouse. And when Curtsinger was assigned there, he just kinda joked around with his boss, he was like, “Oh, all these whiskey is reject whiskey?” And the boss is like, “Yeah, it's just- we're just got to get rid of it.” And Curtsinger was like, “Well, you know, if I could you pay a little bit to just take it off your hands so it's not your problem anymore, if you could get me past security.”
And they were like, “Ha ha ha ha ha,” and then the boss totally did it, and let him just take the stuff. Which again, if you're talking about the criminal mind, that's- I mean, think about how easy that would be to justify, where you're going, “This stuff was just going to go down a toilet anyways, and not be sold because it's shit whiskey, apparently, according to the risky connoisseurs of Buffalo Trace.”
So, you're going, “Yeah, I greased a palm, and I was able to take some home, but it’s no big deal ‘cause it's like dumpster diving for whiskey.
[00:09:33] Toby realized there's a market for this whisky he's taking
Greg: So, here's the next beat in the- here's the next beat in the story. And this, again, it comes straight from the mouth of Toby Curtsinger, is that there was this one day he had a buddy, the buddy came over to Toby's house. Toby pulls out a bottle of Pappy van Winkle, and his buddy's like, “Oh my gosh, you got Pappy van Winkle. That's crazy.
I've got some friends who totally want to buy some Pappy van Winkle. And so, Toby was like, “Oh, that's crazy, I just happ-” again, it's like, “Huh. Well, let me look at my cupboard. Oh, this is weird. I just happen to have a couple of Pappy van Winkle bottles right here. Weird. How did those get there?
Well, hey, if you want to take these, you can just take them, no big deal, buddy.” So, the guy took the two bottles of Pappy van Winkle and the next day, the very next day, this same guy came back to Toby's house and dropped down a wad of cash on the counter. More- more money than Toby makes in a month, the guy hands him for two bottles of Pappy van Winkle.
And his buddy said, “Hey, if you got any- whatever that you can get your hands on, I can get it sold, just like these two bottles that you sold- that you gave me the other day.” And then, dollar signs in his eyeballs, he's like, “This is what I do now, is this kind of-
Greg: -this thing to the extent that I can.”
Greg: And that's when they start the clock on the fraud, was in 2008. Because then, he did start doing that. He'd get bottles, he'd give them to this buddy, the buddy would sell them, the buddy would give him a cut and they're good. Which, again, you've got to think, that wad of cash that was more than a month's salary for Toby, the buddy probably took at least that much for himself as well, which makes sense if bottles of Pappy are selling for thousands of dollars.
And interesting fact, Toby was only making $15 or $16 an hour at Buffalo Trace Distillery. So, it doesn't take, you know- you can start doing the math in terms of what a month’s salary is for Toby Curtsinger, and how a couple bottles would actually pay for a month's worth of his wages.
Caleb: If I may stop you for a second.
Caleb: I seem to recall that there was some talk of softball in this story. Did you mention that?
Greg: There is.
[00:11:49] Toby would take home "taster" bottles
Greg: And let's get to- let me tell you one more little thing about how- a way that Toby would get bottles out of the distillery and home. They would have a taster- like taster bottles, where I think it was partly, like we were saying, for quality control, I think it was partly for like distillery tours. People come through, you get to taste some bottles of the Pappy. And again, goes to the fast and loose inventory control of the distillery.
So, they’d have a dude, he'd be manning this table for tastings for whomever the tastings was set up for. And the fact that he'd be like, “Yeah, let's put out, I don't know, 20 bottles. That's our allocation for the tasting table for today.” So, the dude would have 20 bottles, and really, the factory already wrote all 20 of those bottles off, regardless of how many people came and tasted them.
So, Toby would walk up to the guy who’s manning the table and be like, “Hey, you know that I know people who would pay you a thousand bucks per bottle, for those bottles? How about you hook me up with one? Nobody's going to know it's gone and I'll cut you in a little bit.” And so, the guy was like- well, and even- again, in Toby's own words, he said the guy running the- he knew that the guy running the tasting table was strapped for cash.
And so, that guy had some pressure on him to do it. So, he handed over a couple of bottles of booze to Toby, and Toby, like I said, gave him a cut of that stuff and made everybody happy. And really, from their perspective, again, they rationalize it because the distillery had already written it off. This distillery, they didn't have to go get more bottles of booze for tasting. The tasting went on until the booze were gone.
So, the distillery is no worse off than they would have been anyways. And they're just getting their beak wet a little bit. So, it was crazy how all that happened. Just little ways that he could pinch a bottle here and a bottle there and make a lot of side cash.
Caleb: Yeah. I think if I remember right, they were also- they also just took the display bottles. So, stuff that was just you know, in the entry way or, you know, like you say, for people coming in to- like, people come in to do the tour, and it's like, “Hey, there's a case full of booze.” And like, nobody's like- nobody's paying attention, right?
So, it's like, “Well, that can be ours.
Caleb: We can-
Greg: Right. Like you're saying, in the entry way, it's like, “Well, there's a fake tree in a pot. And over there- for decoration- and over there, there's several bottles of our product just for decoration. If we took a couple of those decorative bottles that are full of actual product that we can sell for thousands of dollars, we could sell them for thousands of dollars.”
So, yoink, yoink, yoink, those are gone. And they didn't take all of them because pigs get fat and hogs get slaughtered. So, they left enough but they took some and they, again, got their beak wet again, that way.
[00:14:42] How does softball fit into this?
Greg: So- but yes, back to your point, softball. So, softball was involved in this game. And fun fact, softball, the sport most closely associated with fraud.
Caleb: I think that’s right.
Greg: Softball was involved because Toby- well, actually, again, in the account that I was digging deep into, Toby was involved in the softball team. And then he had to back away from it because he got married, he had a family and his wife was like, “Hey, you're married now. You can't spend all this time playing softball with your knucklehead friends.” So, he fell again to choose between softball and his family. And he chose his family because clearly, he's a upstanding family man.
Caleb: How much softball was he playing?
Greg: But then once he started figuring out-
Caleb: How- like-
Greg: He was playing- I think it was tons of soft- I think that was his life outside- not his life outside of work.
Caleb: But if your wife-
Greg: If everybody comes to you and says-
Caleb: -it's softball or your family, like how many nights a week are you playing softball?
Greg: Right. And I've played some softball, and for me, that would not be a hard decision.
Caleb: Yeah. Not- I mean, I haven't played softball in years, but if I was, it wouldn't be hard for me to not play.
Greg: Right. Yeah.
Caleb: I don't mean to belittle him or his friends or anything like that, but like- well, come on.
Greg: Yeah. Yeah, you did. Yeah, you did.
Caleb: What I am having a hard time understanding is he must've been playing so much softball and spending so much time doing softball-related things that his wife gave him an ultimatum.
Greg: Yeah. Softball was his life. So, him and his buddy, Dusty Adkins, they were like the guys for the softball league. I don't even- it was hard to tell. Maybe sometimes, they were on the same team, but it sound like a lot of times, they would actually be on opposing teams, but they were best friends. It was friendly competition, and these guys were like the best softball guys, which is part of why Toby's identity, in large part, wrapped around the softball thing.
But then, since he was the best, he wanted to get even better. And so, that's where the steroids comes into the story, where he would start doping up on steroids. He says-
Caleb: Naturally. Naturally.
Greg: Right. Right. ‘Cause when you think of company softball, you think needle in the butt with steroids.
Greg: And here's the other thing. He had a cop on his team named Mike Wells. And Mike Wells, the cop, was also using steroids. And interesting fact, steroids are actually, you know- don't- it's not a generalization where like, all cops use steroids, but there is a large percentage of the police force that uses steroids, and does it, and justifies their illegal use of steroids because they're like, “I'm going up against the bad guys.
[00:17:44] Some other players in this story
Greg: I need to have an edge. So, give me some steroids.” So, apparently, Toby was the supplier of the steroids for his close friends and his softball buddies, including a cop named Mike Wells. Another person that was a softball associate was a dude named Sean Searcy. And Sean Searcy did not work at the Buffalo Trace Distillery.
This guy worked at the Wild Turkey Distillery, and he drove truck for the Wild Turkey Distillery, which comes into play a little bit later, in the story. But those guys- those were the- and then, yeah- and then there was another guy named Ronnie Lee who was also indicted with this whole thing. So-
Caleb: So, what I think you’re getting at here is, we have kind of a vast conspiracy of softball guys in this bourbon racket. Is that what you're trying to say?
Greg: Yeah. Yes, and it's crazy too, because what they- [INAUDIBLE] and I wish that I had written this down cause I didn't.
Caleb: Maybe I’ll remember.
Greg: The charge that they- maybe you'll remember- do you remember the charges that they brought up against Toby? It was something like, it was an organized crime-type charge which meant that anyone who was involved- like, if it's an organized crime charge, everybody in the group would be charged with all the crimes that were perpetrated by anyone in the group.
Greg: So, if you had one guy who murdered somebody, everybody's on the hook for murder. If you got one guy who stole something, everybody's on the line for stealing that thing. Do you remember that part of it? And I can't remember the actual name of it.
Caleb: I do. It was a- as I recall, one of the law enforcement officers on the documentary was saying that it was a Kentucky law. And it was something-
Caleb: It was something- it wasn't conspiracy, but engaging in organized criminal activity or something like that, or-
Greg: Yeah, that sounds right. Yeah. That sounds really good. Let's go with that.
Caleb: Right. And you’re right. When they would be- close enough. But like, when they were questioning the guys, they were explaining it to them, it was like, “Yeah, this is what this guy did. The king pin. You're involved. So, you get charged with the same thing.” And the guys, they like flipped in a second. Right? ‘Cause they was like-
Greg: Right. Right. Yeah.
Caleb: -they were looking at long sentences.
[00:20:08] Thank you to our sponsor, BooksTime
Caleb: Thank you to BooksTime for sponsoring this episode. Finding top quality talent is hard. Managing bookkeepers takes time and energy. Let BooksTime do that hard work for you. With BooksTime, you get a dedicated team of experienced, tech savvy and responsive bookkeepers. The size of your team will scale to meet your needs, even if your needs change.
You'll never again, have to worry about recruiting, training or managing bookkeepers again. BooksTime is extremely picky about who they hire, carefully evaluating bookkeepers to ensure they are knowledgeable, accurate, detailed-oriented, and reliable. BooksTime rejects about 99% of candidates.
You get to work with the top 1%. Contact BooksTime for a free, no-obligation consultation. They'll answer all your questions, and work with you to determine whether your firm is a good fit for their white-label partner program. To learn more, visit bookstime.com/accountants. That's bookstime.com/accountants.
Grow your profits and shrink your workload with BooksTime.
Caleb: Are we skipping ahead too much?
Greg: So, okay. So, just- no, not too- no, not at all. This- because I think if we are jumping around, it's because this case is like a clusterfuck of idiots who just wound up- ‘cause that's the weird thing. Like, they were- it was organized criminal activity. They were so unorganized, it was ridiculous. So, one last little thing before we start getting into the crime syndicate of knuckleheads.
[00:21:45] Poker nights
Greg: Toby Curtsinger also somehow, was involved with poker nights, like back room poker nights in the bustling metropolis of Frankfort, Connecticut, and people who went to these-
Caleb: Kentucky. Kentucky.
Greg: -poker nights were rich people.
Caleb: They don’t make bourbon.
Greg: What did I say?
Caleb: You aid Connecticut. They don't make bourbon in Connecticut.
Greg: Oh my gosh, my brain is like mush. But thank you for-
Caleb: And if you call Kentucky a state, I'm going to call you out on that too.
Greg: Is Kentucky not a state?
Caleb: It's a fucking Commonwealth. Back to the story.
Greg: Oh. Oh, okay. Well, okay. So, Toby was with all-
Caleb: Sorry. Sorry. I want to make sure we were clear. It's a Commonwealth. It’s Commonwealth. That’s Commonwealth.
Greg: Right. So, there was really- so, at these poker games, there was some rich and elite people from the state of Kentucky who would come to these poker nights.
Greg: And like, we're talking senators. I don't know if it's state senators or U.S. senators, but there was like, senators who'd be at these. So, there's like connected people who were at these poker nights, and poker and booze go very well together. Toby, like I said, somehow, he wasn't necessarily the upper echelon of Frankfort, Connecticut, but he got invited to these poker nights.
And one of the rich guys of the poker night said that whatever Toby could get them in terms of bottles and booze, he would buy it from him. And in one instance, he paid Toby $4,000 for three bottles of Pappy van Winkle. And like we said, I don't know exactly what- how many- you know, maybe those were 13 years, who knows what they are.
But regardless, if Toby's getting them for $0, selling three of them for $4,000, is a huge markup for him. It's an infinity percent markup from 0% to- from $0 to $4,000. So, Toby has all these people who are saying, “I'll buy whatever you can get your hands on,” and Toby is getting what he can get his hands on, and he's getting rid of it, and he's making some money.
But he's also getting well-known among his softball buddies and his work buddies as a guy who can fence stole booze.
[00:24:00] Ray Osbourne
Greg: And so, there's this one night, he's got a work buddy named Ray Osbourne, who apparently, had a cocaine problem, and also, stole 20 cases of different kinds of high-end booze from the Buffalo Trace Distillery. And Toby's like, “Ray, how did you get all this booze?” And Ray's like, “I don't know, man. I just got it. And it's here in the back of this truck. Can you sell it for me?”
And Toby's like, “I guess so,” but Toby, in his account, he's like, “But don't you ever do this again, you dumb shit.”
Caleb: Don't ever do that again.
Greg: Right. And so- but, he's like, “Yeah, put it in my garage.” And so, some of it was- it was all the different kinds of booze that they made at the Buffalo Trace Distillery, which not only included Pappy van Winkle, it was also some Eagle- what was it?
Caleb: Eagle Rare, Eagle Rare.
Greg: Eagle Select?
Caleb: Eagle Rare 10-year.
Greg: Eagle Rare 10-year.
Caleb: There it is. And some Blanton’s. And I think a lot of those cases were- or some Blanton’s.
Greg: Yeah, Blanton’s. That was some other ones. So, he had a veritable potpourri of Buffalo Trace booze in his garage, and he says he made two phone calls and poof, all of the booze was converted into cash for him. And he doesn't even say how much he passed on to Ray Osbourne- probably just enough for a good Eight-ball.
And I say that as though I know what an Eight-ball is.
[00:25:27] Sean Searcy starts bringing him barrels to sell
Greg: The other thing that's interesting, going back to the softball guys, we talked about Sean Searcy. He's the guy who drove truck for the Wild Turkey Distillery. But again, he knows that Toby can sell some shit. So, he started bringing Toby some barrels- full barrels of booze- not bottles, barrels of booze.
Each barrel was worth around $1,200, which also, that seems low to me because did you find values for full barrels of whiskey in your research?
Caleb: I did not.
Greg: ‘Cause $3,000 is also kicking around in my head for a barrel of bourbon. And that sounds better than $1,200.
Caleb: Well, that’s what they were selling it for.
Greg: But here's- regardless of how much these barrels of whiskey were worth, here's how Sean stole the barrels of whiskey, is like I said, he drove truck for Wild Turkey, and he would be transferring barrels between two different Wild Turkey locations, and on his way from one of the locations to another location, he'd stop at his father-in-law's farm, and he'd roll barrels down a ladder into his father-in-law's barn.
So, they have like this- what are those things called? The Rube Goldberg machine of whiskey barrels that go down like a- like a redneck Rube Goldberg machine. You drop the barrel in and it rolls down, carefully placing it into his father-in-law’s barn, and then he quickly zooms off to his other- to the other location.
And like, literally, you hear about stolen goods, people saying, “This fell off the truck,” like, that's almost exactly what was happening with these barrels.
Caleb: They literally fell off a truck.
Greg: So, I mean, he pushed them, but after they got pushed, they fell.
Caleb: Into a redneck Rube Goldberg machine.
Greg: Exactly. And here's another fun fact. At one point, he- I guess I wouldn't know how much snow Kentucky gets, but I guess it gets some snow. And so, at one point, Sean Searcy calls the county to complain that this very- this rural back road that led to his father-in-law's barn wasn't plowed.
And that didn't crack the case, but it was one of those things where in hindsight, like people were putting pieces together and go, “No, we should have figured it out here, because this rural road is nowhere near the route between these two Wild Turkey locations. So, if he's complaining that he can't get his truck down this road, he shouldn't have his truck on that road anyways, ‘cause that doesn't make any sense.”
So, again, it was a syndicate of redneck knuckleheads who were just stealing stuff and giving it to Toby, ‘cause Toby could get rid of it. Here's another funny thing. Toby’s-
Caleb: Wait. I will just remind you though, I would just remind you though-
Caleb: That this ragtag group of bourbon heisters, knuckleheads they may be, but they did pull this off for eight years.
Caleb: Eight years? Seven years.
Greg: They did.
Caleb: Seven years.
Greg: They did.
Caleb: Seven years. And they- if you count it from ‘08 to 2015. Just giving credit where credit is due.
Greg: Good point, but it's almost like stupid people just stumbling their way into the biggest bourbon heist in history. That's seriously what it feels like, to me, is they're like, “Oh.” I mean, like the guy with the truck full of the things that, “I don't even know how they got there.”
[00:29:10] Disorganized Crime
Greg: It's just so- it's not organized crime. It's disorganized crime, 100 percent. So, another thing that strangely worked in Toby's favor- although it 100 percent shouldn't have- is that Toby never hid the fact that he worked for the Buffalo Trace Distillery. And that actually helped him move the booze because the people that were buying it were just like, “Oh, he must get an employee discount. Cool.
So, he can get his hands on the stuff that we can't get our hands on, and he can get it cheaper than we can. So, cool. That's how this almost works.” So, again, he should have been caught ‘cause somebody should've said, “Hey, there's this Buffalo Trace guy selling Buffalo Trace stuff on the side. What the hell is up with this?” But instead, they're like, “Oh, yeah, it seems- that would- that makes sense. It's all on the up and up. No problem. Let's buy it.”
Greg: Just so weird.
[00:30:08] How did this come to an end?
Caleb: So, maybe I'm jumping ahead again, a bit, but how does this all come crumbling down?
Greg: We're absolutely, ready to get to get into that. Also, just full disclosure, I have been drinking some bourbon myself tonight, so hopefully, this story gets even funner as it goes along. But I also might end up calling Kentucky Connecticut. So, there's that.
Caleb: Or state.
Greg: There's the unintended consequences of that- or a state, yeah. ‘Cause it is. Now, in October, 2013, here's where everything starts to crumble down. October, 2013, the Buffalo Trace Distillery finds that 200 bottles of Pappy van Winkle, poof, they're missing out of their inventory. So, I guess once in seven years, they do an inventory count at the Buffalo Trace Distilleries.
And the Sherriff- they have this problem between the Sheriff and the cops, ‘cause the cops are taking steroids and they kind of want to protect Toby who's going on. And then they got the sheriff who's trying to get reelected, who’s like, “We got to figure out who stole these 200 bottles of Pappy van Winkle from the Buffalo Trace Distillery.”
So, the Sheriff puts out a $10,000 reward for information leading to the arrest and conviction of the Pappy van Winkle burglar. And because of the reward, they were just getting inundated with tips, but all of them were just fruitless, just people going, “Eh, I think I saw buddy with a barrel in the back of his truck,” and then they couldn't find the guy, or they- everything just fizzled out.
Nothing was good. But then, things really started to unravel for Toby in March of 2015, when the county Sheriff received an anonymous tip and they said, “Hey, there's bottles- sorry, there's barrels of whiskey at Toby Curtsinger's house. Here's the address. Go check it out. He stole the booze.” So, the Sheriff's department sends out their people.
They snoop around, they see the five barrels- they think they see the five barrels under like a tarp back behind his garage. They get a search warrant, they get to go on the property, they find the barrels, they go into the house, and what's crazy is in the house, they are unpacking everything, and they find the illegal steroids as well.
And apparently, they find like shit tons of guns in this house too, but it's lots and- it’s lots and lots and lots of guns, but there was never any charges for the guns. So, the guns were legally obtained, but they added to the fire of the story because, you know, booze, steroids and guns is a great story, even if it's Kentucky and the arsenal of dozens of guns was all on the up and up.
So, he never- there was never any legal problems with the guns, but obviously, there was legal problems with the steroids, legal problems with stolen booze.
Caleb: It certainly looks bad.
Greg: Yeah. Yeah. The guns don't help the visual. Right.
Caleb: No. you know, you got some-
Caleb: You got some steroids, so you're assuming some Aggro. You got some booze, so you're thinking, “Huh. Maybe stolen booze, you know, dealing with stolen goods, a little Aggro with the steroids. There’s some firearms around. Things could- I think things could get messy quite quickly.
Greg: Right. Yeah. Shit could get ugly. Yeah, that's- it at least has to be disconcerting for members of the police to find just a huge stockpile of firearms with anybody that they're investigating. So, but again, there's a thing- and we were kind of getting into this with just sort of the, “Hey, everybody who works at a distillery just kind of happens to have booze from their distillery that they work at.”
And along with that, there's very much a- not a snitches get stitches idea, but just like good people don't rat on their friends. That's very much the culture of this place. So, nobody was narc’ing them out. Toby was- well, actually, I guess he started, what, singing like a Canary, is that what they used to say about people?
Caleb: That’s an expression, yeah.
Greg: I think that's an expression in the English language. And then his wife comes out and she's like, “Hey, shut the fuck up till we get an attorney, you dumb ass.” And so, he was like, “Oh yeah, you're right. I quit softball for you. Now, I'll shut up for you, honey.”
And so, he did, and apparently, he didn't say enough to actually confess to what was going on, but then they got a warrant to be able to obtain his phone records, and his- particularly, his text messages. And his text messages were they- he was 100 percent guilty of stealing booze and selling steroids, based on his text messages.
Greg: So, that's how everything fell apart.
Caleb: The text messages, if you know, you watched the documentary, that was really, like, you know, in these kind of like, conspiracies, there's always the search for the smoking gun. You know, the metaphorical smoking gun. And like, there were so many smoking guns in these text messages. Like they just couldn't- I mean, pick your smoking gun. Like, it was just, like you said, disorganized crime. Severely, severely, disorganized crime.
[00:35:34] Toby's sentencing and punishment
Greg: Yeah. Severely. Severely. So, that's when everything fell- it fell to pieces for Toby Curtsinger. He pled guilty to theft charges in 2017. He was sentenced to 15 years in jail, but he only served 30 days of those 15 years because he was a first-time, nonviolent offender and he was- but the crazy thing was, so, again, they find these text messages.
There's this whole Kadra of steroid-freak softball player friends who all get pulled in for questioning. Everybody- it wasn't clear exactly why or how this happened, but Toby was seen as the ringleader. So, he was the guy who took the fall for everybody. So, they were- they brought in these people they gave them immunity if they'd help him- if they would help the case against Toby, because they needed somebody to present to the community to say, “Hey, look, we got the bad guy.”
So, they all narc’ed on Toby. Toby took the fall for them, and he was the only one out of every- the group of 9 or 10 people that got hauled in, he was the only one to serve any time at all for the crimes. So, 30 days in jail, he was out. He obviously, does not work at Buffalo Trace Distillery anymore. Now, he paints houses for a living.
[00:36:59] Toby still denies stealing those 200 bottles of Poppy Van Winkle
Greg: But Caleb, there is a weird epilogue to the story-
Caleb: There is.
Greg: -because everything started falling apart because of these 200 bottles of Pappy van Winkle that were stolen- that were found missing from the distillery in 2013. And Toby, to this day says, “Yeah, I stole some shit, but I did not steal those 200 bottles of Pappy van Winkle.”
And he still tells that story today. And then looking through the records of the conversations that the police had with all these different people, not just in the group that was associated with Toby, but also the interviews they had with all the people who worked at- like, a hundred people that worked at Buffalo Trace Distillery, they came across this guy named Greg Anglin, who they said, “Hey, we- you've got immunity if you help us bust Toby, I guess.”
And Greg was like, “Yeah.” They were like, “Did you ever steal anything?” And he's like, “Yeah. You know, I stole a case,” and they're like, “Was it- so, just one case? You gotta tell us. ‘Cause if you lie to us now, you're- none of this immunity stuff's going to work.”
And he's like, “Okay, it was two cases.” And they go, “”You sure just two?” And all of a sudden, it got from one case to 17 cases of Pappy van Winkle that this Greg Anglin guy stole. So, all of this pressure's on finding this Pappy van Winkle thief, and Toby Curtsinger is a thief, but it looks like from all the evidence that's out there, now that all the dust is settled, that Toby didn't steal the 200 bottles of Pappy van Winkle.
It was this Greg Anglin guy, and the police let him get away scot-free because they're like, “Hey, we'll just make all your sins disappear if you snitch on Toby,” and he was like, “Cool, I'll do it. I stole 200 bottles of Pappy van Winkle. Burn. Looks like you're the sucker now.” And he walks out whistling and skipping and clicking his heels out of the detective's office.
[00:39:04] Was justice served in this case?
Greg: So, that's the very interesting epilogue, and I guess you know, Caleb, sometimes, we talk about justice being served. And I mean, what do you think? Was it served with Toby? Was it served with his friends?
Caleb: You know, I have a hard time with this one because it's one of those things where, you know, people get in over their heads. Toby’s account of this is, you know, a lot of what we're drawing on here. And like, you listened to him talk, and he's just like, “Look, when I didn't have softball, I was-” like, he was lost.
Like, he needed something to fill that thing that gave him confidence, that made him feel good about himself, the self-esteem, right? And so, when he could help people out, whether it's fucking pricey booze or steroids, I mean, he was able to make those connections for- and in his own words, he talks about it. He says, “It's like that made me feel good. It gave me that little bit of- gave him that dopamine hit that he needed to get the self-esteem, to have the confidence to do the stuff.”
And so, I think anyone can relate to that kind of human need. Right? But what I think is incredibly misguided is to think that taking stuff illegally from your employer and giving it to someone else, and getting a huge mark up, getting like- getting thousands of dollars for something that retail- you know, getting thousands of dollars for selling something that retails for a couple of hundred, and it doesn't cost you anything.
Like, to kind of rationalize it in your brain, like that is incredibly misguided, okay?
Greg: Yeah. Oh, absolutely.
Caleb: And like, he ropes all his buddies in and like, it was just like, “Look,” that's not an accident. He didn't like- they didn't just like, “We’re half joking about it,” and then they fall ass backwards into a conspiracy. No, like, there were- there was deliberate behavior here. Right?
Greg: Yeah. Yeah.
Caleb: And so, like, in terms of that, you definitely made some pretty bad choices, but I understand the desires he had to, like, again, self-esteem right? In terms of like the justice, I don't know, like 15 years? Like, he was sentenced to 15 years. I mean, you know me. I'm kind of the- I don't know, bleeding heart or whatever.
That seems pretty steep. That seems steep for, you know, for all intents and purposes, like nonviolent crime, right? And he was- he did qualify, what they call in Kentucky- they talked about it- they call it a shock. He was a shock offender, and that's why he was released after 30 days. And-
Greg: Do you remember what that term- I remember looking at that, and isn't it that like, because you're a first-time nonviolent offender and you're like, “Hey. Hey bitch, you're going to jail for 15 years,” that shocks them into changing their- it scares them straight.
Caleb: Essentially, yes.
Greg: And then they're like, “Ah, so, you're good after a month. Don't worry about it, but don't you do it again.”
Caleb: Yeah. So, I mean, there may be some questions. There may be some debate about whether 30 days is really justice, given the value of the merchandise. But I think there's something about that- there is something about kind of, this shock offender system that seems to be, at least people who- I don't know the history of it or anything, but it seems to be in the right place.
But I hope at least- and again, don't know much about it, but as long as it's applied consistently. Like, usually, when these things happen, they're not applied consistently. And so, that's what I would worry about. But in any case, like, his kids are in that documentary and they're devastated through all this. And his wife is devastated, and like, dude, knucklehead or not, like, dude went through a lot.
And so, in this case- and basically, had to start completely over. So, is justice served? I don't know. I think about all that, and I look at- you know, I look at, you know, the stories in the documentary and everything and I think, “Yeah, dude hasn't had it easy.” So, yeah, I'm- I guess if I need to be satisfied- I don't know if satisfied is the right word- but I guess I'm satisfied. Greg, what do you think? Am I way off?
Greg: My two cents, no, no, no, no. We're right on the same line. I also feel like Toby- justice was served for Toby. I'm cool. He got sentenced to 15, and the fact that he only served 30 days, not because of a technicality, not ‘cause his attorneys were, you know, were super it, but they were like, “No, he- this is his first time and he's not violent. He can be back out in society,” and you know, we’re not gonna-
Caleb: We’re pretty confident he's never going to do anything so stupid ever again.
Greg: Yeah. So, I think- so, I feel okay with what happened to Toby. Where I don't feel justice is served, is like I said, they needed somebody so bad for the newspapers to say, “We got him,” that they let so many people go scot-free. That's what I think is not justice.
Caleb: What's interesting about this is, you know, law enforcement, they have these kind of like- you know, they have these tricks up their sleeves. They have these methods in terms of like, getting people to cooperate with them. And they dangle things like immunity, and that's what they did to all these guys.
They said, “Well, we'll give you immunity if you just tell us everything you know,” and really, if I- maybe I'm mistaken, but Sheriffs and police officers, they don't get to decide who gets prosecuted for crimes. Prosecutors decide who gets prosecuted for crimes, right? And I mean, they have to work together, right?
Caleb: They work together on those things, and it's like, “Well, this person did this thing.” It's like, “What are you going to do? Whatever.” And they might make- I suppose law enforcement makes recommendations to the prosecutors. It would be interesting, Greg Kyte, if we got a prosecutor on here to talk about this stuff. But my point is-
Greg: I would love that.
Caleb: Yeah. But my point is, is you're right. To give all these people immunity, including someone who probably made off with you know, a hundred- a couple hundred bottles of Pappy van Winkle, which is probably worth what? 100 grand or whatever we were speculating about. There is something kind of, that is very unsatisfying, where there's plenty of wrongdoing go around here and they pin it all on one guy.
I am sympathetic to your argument. I'm sympathetic to your position that it’s like, “Eh.” There's some people here that maybe had something coming, and it never came.
Greg: Yeah. Right on. Well, it's good that you and I can get to agreement on that. And who knew?
Caleb: Who knew?
[00:45:52] Would anyone under the right circumstances, commit these crimes?
Greg: So, Caleb, one thing I want to get into is this. We talked about this already. Toby Curtsinger, he's convinced that he's just like everybody else. And he says this at one point in that documentary, he says, “If you- if anybody was presented with the opportunity to steal one bottle of whiskey that you could sell for the equivalent of two weeks’ worth of work, and you knew there would be absolutely no con- you know you would- you were 100 percent certain you wouldn't get caught, you would absolutely do it.”
That's what he presented to the- he was like, “Right? You guys would do that. If you could steal something and not get caught and make tons of money, you’d-you shut up, you holier-than-thou asshole. You'd absolutely steal the booze too. Don't be such a prick.” That's what he- but that's the question. Would you?
Do you think you would do that, Caleb, if you were- if there was an opportunity to do something like that, would you? Or maybe even more broadly, do you think everybody would do what Toby Curtsinger did?
Caleb: I think lots of people would. Okay? I'll start there. I think lots of people would.
Caleb: I don't think everyone woud. I think it all comes down to context. So, if a person is living in Frankfort, Kentucky, and they're making $15 or $16 an hour and they just- they can't do the thing they love anymore, which is softball, you know, maybe taking some booze and selling it for thousands of dollars, maybe that's a real easy decision.
But in terms of just like just plopping somebody down and in situations like, “Oh, there's booze that you can take and you can sell it for thousands of dollars,” there's plenty of people out there that’d be like, “No, that's stealing. That is wrong. I'm not going to do that.” Right? So, what he says is- it's a pretty, just raw generalization about human behavior. And it's- I don't agree with it, but Greg, I'd be- I'd love to hear what you think. Is it- where do you fall on that?
Greg: So, here- it's a whole journey for me. When he says that, initially, my response is, “No. Hell no. Not- I wouldn't do it. And most- everybody wouldn't do it. You did it, stop trying to deflect your behavior and say- and justify your shitty life choices by saying everybody’d do the exact same thing I did if they were in the same circumstances.” That's my initial response.
But then Caleb, I think back to stuff that you and I know from the ethics trainings that we've done, where A, you- your behavior is influenced so strongly by the culture and by the other people that you are associated with, in that, like whatever ad hoc social group is around for that activity, which for him, was the other people, not just at his distillery, but other distilleries.
So, you've got this seriously- like, a culture where taking stuff isn't really that bad. And probably, you could find somebody who- I bet you Toby, he could probably find somebody who stole more booze than he stole. So, you've got that context. And then you also have the context- this is something we talk about a lot, the ego depletion side of it.
Where if you've got this wide-open door to steal stuff with no consequences, and that door is open to you.
Caleb: And you walk by that door- you walk by that door every single day. For decades, yeah.
Greg: For decades, then eventually, you're going to be like, “Yeah, I think I need to steal that.” Eventually, your self-control is going to be eroded to where- and those two factors combined, then I start going, “Actually, he might be right, that actually, most people who are in that culture who have the opportunity for that long, probably you're going to take some booze.”
Caleb: But again, I think there’s-
Greg: Which is then-
Caleb: And maybe I don't mean to parse words here, but he said everybody and you're saying most people. And I agree with you. I would- I went so far to say, I think a lot of people would do what he did. I don't know- I can't speak for myself, I can't speak for you. I can't- like, I can only speak for myself. I think a lot of people would do what he did, but I disagree pretty strongly with the assertion that everyone would do- like everyone would do the same thing he did.
That is just- not only is it like a, fucking impossibility, it just- there are fucking- there are militantly ethical people out there that just say stealing is-
Greg: Yeah. No, absolutely.
Caleb: Stealing is wrong. Period, end of story. There's lots of people out there like that. And so, it just- it's just wrong to say that everyone would do this thing, even if they're making $15 an hour working at a distillery, and the more- the thing that they love more than their wife and family, softball, has been recently taken away from them, they will still not steal. They won't steal.
Greg: Yeah. Right. See and here's the thing. So, me, personally, I think he's right. I think I would've stolen booze, but then a couple of years later, would have been horribly guilty, and I would have somehow like made my own and bottled it and put it back in stock, just to make amends.
Caleb: Reimburse the distillery with a personal check.
Greg: Right. Exactly. Okay. Next question. This question takes us to a weird place because-
Caleb: Great. Now, I'm excited. Been waiting for this.
[00:51:40] What should you do when misappropriation is part of work culture?
Greg: Well, yeah, I think it does. What do you do if you work at a company where misappropriation is part of the culture? Because we have been trained to some degree or another- and I know that the AICPA has specific rules in terms of what is- almost like a decision tree on what to do if there's unethical behavior at your job, and you're supposed to go to your direct supervisor, and if they can't help you, go to the board of directors.
And if they can't help you, go to the audit committee, and if they can't help you, go to the police, and if they can't help you, you quit the job. But what do you do if you're at a company where just nobody's gonna- not just in a company, but even in an- I guess an industry. Maybe that's a better way of saying it. You work in an industry where misappropriation is part of the culture.
Because if you are a distillery worker and that's your expertise, and you quit from this distillery and you go work to the other distillery, but you know that the culture is the same there, what do you do? What's your choice? Or did I already answer my own question?
Caleb: Yeah, I think you answered your own question. But I guess, look, if somebody throws a ball, you don't have to catch it. Right?
Caleb: So, look, if you know, he tells that story about like his first day on the job, it's quitting time, they go around and everybody has, you know, a sip of whiskey as a group of people. Like, that's one thing. That's like a communal- that feels like a communal thing that no one- like, know from the owner, to the supervisor, to whoever are down and be like, “Oh, this is just- these are working people having a drink. They work at a great place. So happen the product is high-quality booze. And they're having a drink together, and that's okay by us.”
It's a very different thing where there's bottles on the line, and you just yank one out and you walk out the door. Like, I just- you know, those two things are very different. So, I think again, people who are confident in kind of, the morality of what they see to be right and wrong, they can make those distinctions. And yes, there's nuance there, but if you- if you're in that part of a culture, yeah, it probably does feel like it's like, “Well, everybody's doing it, why shouldn’t I?”
I mean, you know, it's just one of those things where yeah, maybe you do find a different place to work, and maybe if the other- if maybe the distillery down the road, if they’ve got the same culture, then you've really got to re-examine what kind of company you want to work for altogether. Greg, what about you?
Greg: See, that's the thing. I do know absolutely, you need to quit your job and you need to find a new industry to work in.
Greg: As a matter of fact, you should go back to school, and you should get an accounting degree and get your CPA license and become an accountant ‘cause we do not-
Caleb: And then maybe you could go back to that distillery and fucking put in some inventory internal controls maybe, I don’t know.
Greg: And audit them. Yeah, exactly. Exactly. Well, and that's the thing. So, like legit, I think that is the right answer. If you are in a company that has a culture of misappropriation of inventory, and you're in an industry that that culture is widespread throughout the industry, you need to leave that industry. I think that's bottom, that's hard. That's hugely sacrificial to do that, but I think that's the right answer.
And that's how you create a story of yourself being an ethical person by doing that, by going, “Hey, that-.” And then that reinforces your own self-image. That's how you become a militantly ethical person is by you start- you make a huge sacrifice on- to hold your core values of being an ethical person.
[00:55:25] Final Insights
Greg: I want to do just a quick, like, I don’t know if- just a speed round of insights that I had about this case. And would you please chime in when you have some thoughts that pertain to these? That- does that work? Is that a good way to round out the podcast?
Caleb: That's a great way to round out the podcast.
Greg: Awesome. So, one thing that I found- and this comes from the ethics training that you and I have done several times, Caleb, is that bad behavior in one area primes you for bad behavior in another area. Doing illegal steroids, that's illegal. And that's going to prime someone to make it more likely that they're going to steal booze from their employers.
So, if you're doing one thing that's illegal, it's not going to help you in terms of being ethically pure in another area. Matter of fact, the research shows that it does the exact opposite and you're much, much more likely to do- if you do one illegal thing, you're going to do other illegal things. So, to drag you down the hole.
Caleb: all right. So, if I understand you right, boulder shoulders and sweet pecks do not equal not stealing.
Caleb: Right. Okay. In this particular story.
Greg: Yeah. I mean if you get them- if you get them au naturel, then you're good.
Greg: But if you get them through illegal steroids, it's not going to help.
Caleb: Yeah. you’re probably-
Greg: It’s not going to help you be an ethical person, so.
Caleb: Yeah, you’re probably going to steal high-end booze, or mousetraps or whatever.
Greg: Here's some other observations that I saw.
[00:56:52] Red Flags
Greg: Red flags. Red flags with Toby Curtsinger, specifically. These are red flags as outlined by the ACFE, in their report to the nation. Interesting, not really that much red flags that were exhibited by Toby. The two that I found were the closest match for him was having a Wheeler-dealer attitude. ‘Cause he self- he described himself as being the guy that you can go to, to get you something if you need it.
So, he was kinda like, he was ready to make deals and figure out how to get stuff done. So, I think that qualifies as a Wheeler-dealer attitude. And the other- 13 percent of fraudsters exhibit that Wheeler-dealer attitude. It’s not the highest one, but it's about middle of the middle of the pack. And then also complaining about inadequate pay. He was saying, “Hey, I was only making 15 to 16 bucks an hour and this booze was worth tons more than that.”
So, I don't- I never really felt like he explicitly like complained about his pay, but he definitely used it as kind of a benchmark for what he was stealing. So, that was kind of a maybe red flag, and 8 percent of fraudsters exhibit the red flag of complaining about inadequate pay. Any commentary on either of those, Caleb?
Caleb: No. I mean, I think it's pretty spot-on. Like, it's very insightful that you were- you read between the lines very well on the pay question.
Caleb: He maybe wasn't explicitly complaining, but it was clear that, like I say, he was- that was the measuring stick for- in his mind.
Greg: Yeah. And it maybe goes back to what you said at the top of the podcast, about pound of flesh kind of mentality, where it's like, “These guys are getting more than- they're getting more than 15 or 16 bucks out of me, so.” But again, he didn't explicitly connect those dots for us in the whole thing. One of the other things that did kind of come up was living beyond your means.
That's the most common red flag behavior among perpetrators. And- but it never- nothing really came up where he was living this ultra-extravagant lifestyle. It was more like he got his kids really nice Christmas presents. That was the extravagance of his lifestyle. It wasn't that he, you know, bought a Quarter Horse empire that he bred and traveled around.
Greg: You know, it was nothing- I mean, I think you know, maybe at one point, it was like he got a really nice pickup truck. But again, it's sort of like, that doesn't seem like over the top living beyond your means.
Caleb: Yeah. And I mean like, that's the thing is, again, when you talk about, has this guy- has justice been served? For all- I mean, we have a very limited picture of this guy's life, obviously. But dude seem to love his kids. He wanted to give his kids a good life and like, yeah, if he blew that extra money on giving them- I mean, he blew it on steroids and guns, obviously. But if he also blew it-
Greg: Right. That's what he did. It was the arsenal of firearms.
Caleb: I mean, there was an arsenal.
Greg: That was his extravagant lifestyle.
Caleb: There was an arsenal.
Greg: Yeah. That's not cheap. That stuff’s not cheap.
Caleb: There was an arsenal. So, let's not forget that.
Greg: Yeah, good point.
Caleb: But if he was blowing money on his kids, like, eh. You know, I mean, he was showing them love in the way he knew how, so.
[01:00:12] Fraud Triangle
Greg: Yeah. Yeah. Next thing, just to go through the fraud triangle, the opportunity. So, opportunity, rationalization, pressure. Those are the three sides of the fraud triangle. So, this is more just a recap. The opportunity was there because Buffalo Trace had shitty physical controls over the inventory. Buffalo Trace had shitty-
Caleb: They may have been old as- they may have been old as the distillery itself.
Greg: Yes, exactly. Well, and that's actually something that did come up in some of my research, was that the distilleries and whiskey making was just an ancient- you know, it's so old-school that it's almost beneficial to the brand. If you're like, “We're still making whiskey the same way that we did back in 1816.” And that whole idea, that's what a signal of quality is, that it's hard to say, “Yeah, that's for our production side, but everything else, we're going to bring into the 21st century.
Caleb: Right. If you're-
Greg: It's hard to-
Caleb: It wouldn't be a bad idea to get your back office in the 21st century.
Greg: Exactly. But that goes to your point, where the physical controls over industry- over inventory probably weren't that different from when these distilleries started, you know, ostensibly over a hundred years ago. So, yeah, you're right. And same can be said, shitty internal audit procedures, shitty inventory management, not just physical control, but just sheer management of industry.
And then like we've said, over and over again, just a shitty culture where people are almost expected to help themselves from time to time. So, that's- that was the opportunity side of the fraud triangle. That rationalization, we already said it, “Everybody's doing it, and everybody would do it if they were put in my situation,” that's pretty clear.
The pressure, that was the thing- that was the missing part of the fraud triangle, for me. I mean, we've said his pay wasn't great, but it- but we never really saw that like, he was getting hunted down by loan sharks. So, he had to pinch some bottles of booze to sell, to get them off his back. We never saw huge financial pressure on him, other than just having more money is nicer than having less money. And I guess the little bit you were saying, where he found purpose in life by stealing booze.
Caleb: Yeah. I mean, I think that's probably what I would point to, is he felt he needed a- after you know, he had to quit playing softball- I won't beat that drum again, but it must have been a lot of softball- he needed something. Dude needed something.
Greg: To fill the void.
Caleb: Dude needed something to fill the hole.
Greg: So, that-
Caleb: To fill the void. And so, like, the pressure for him was just like- again, self-esteem, confidence. Like, feeling like that he had something to look forward to, and that he- and he was helping- well, in his mind, he was helping people, but he was connecting people. He was the guy, he was like, “I got a guy, and I was the guy.” Like, he said that several times. And so, yeah, I'm sure that was- or it was- that wasn't- that was the opposite of ego depletion. That was ego appreci-.
Greg: Ego boosting.
Caleb: Yeah. Ego boosting. Ego appreciation. So, to the extent that-
Greg: I think-
Caleb: -that pressure could exist. Again, we could get a psychologist on here to talk about this. That'd be interesting.
Greg: Yeah, which, I would love that. Well, here's the thing. I think you're onto a brand-new- you just discovered a brand-new part of the pressure side of the fraud triangle that's completely underappreciated. And that is existential ennui. Because if you, 100 percent, are like going, “I don't know why I exist on earth,” and- then that's a- you got, I mean, that's a fundamental need of the human psyche-
Caleb: I’m writing this down.
Greg: -is to have a reason to not put a bullet in the noggin and you go, “Well, I found it.” Was that too dark? Did I go too dark on the fraud podcast?
Caleb: Not for me. Not for me.
Greg: Well, nice. Not for me either. And if somebody lasted this long in the podcast, not for them either, because they're looking for something.
Caleb: Existential ennui. Write it down, everybody.
Caleb: Alright. Okay.
Greg: There it is. So, yeah, that's a- people, that's an underappreciated, undervalued, something that nobody talks about when it comes to pressure.
[01:04:51] This fraud was detected through tip
Greg: Next thing I want to talk about is how it was detected. It was detected through a tip. It was funny that the Sheriff's office, it was very clear that they actually knew the identity of the person who gave the tip, which I guess they'd have to, if they're giving 10,000 bucks out. But they were 100 percent not wanting to give that identity up, which makes sense that's how they should be.
But there was sort of this subtext- and I don't know if you picked up on it, Caleb- that it was, like it was somebody from the inner circle. Did you feel that too?
Caleb: Yeah. I mean, I don't have a hunch as to who it was, but it had to have been-
Greg: It was his wife. It was his wife.
Caleb: No, no, no, no, no. Come on. Come on.
Greg: I think it was his wife. It was his-
Caleb: Are you serious? Is that your theory?
Greg: That- well, that's how I'd write the story if I was the author.
Caleb: Oh, all right. Well, fair enough.
Greg: Is the wife- plus, how cool would that be? You narc out your husband and you get 10,000 bucks for it.
Caleb: Well, I mean-
Greg: So, not too shabby.
Caleb: Look, if you give your husband an ultimatum about softball and then you secretly understand that he is taking far too much booze, you know, he's stealing far too much booze, I mean, what are you going to do? Give him another ultimatum? No, the thing you do is you tip off the cops, like- or the Sheriff, excuse me. You tip off the Sheriff.
Caleb: And blow up your family. I mean, that makes a lot of sense. Does it? Does it? Does it?
Greg: That's what a good- no. Okay. You're right. My theory is crap. But here's- again, here's the interesting thing about that. 43 percent of all frauds are detected from a tip. And because of that, one of the best things that you can do to- not so much to prevent fraud, but to detect it as quickly as possible, is set up easy means by which people can give tips, give anonymous feedback about how frauds are- that frauds are happening at your company.
So, if you're in a position in your company where you can- where you're, you know- or as an accountant with your job, when you're counseling clients, try to help them set up a fraud tip line. And I think there's actually outsourced companies that will set up- that you can pay a fee to every year. And there'll be a unique number for your company where people can narc out their co-workers.
Not even necessarily for cash, just to do it because they're- ‘cause they feel bad feelings about it. So, yeah, those are the insights I had, and some of the lessons that I learned. Anything else you want to add to that, Caleb?
Caleb: Nothing comes to mind. I mean, you did a good job with this one, Greg. I mean, we really covered it. And yeah. I mean, it's a hard thing to- I think the two things that stick out for me the rationalization. Like, that's the thing that I have a hard time getting my head around.
Although I think you make a compelling argument. You almost convinced me, that it would- yeah, sure. Everyone. Yeah. But for me, that's personally something hard and then- but you're right. The pressure also is something that's not crystal clear. But I mean, we've got- we got this existential ennui, I don't know. Maybe that's something. Maybe we're onto something or maybe we're not, I don't know.
Caleb: Who knows?
Greg: I think we need to get a doctoral student to look into existential ennui as a component of the pressure, component of the fraud triangle. So, I think we need to do that. So, let's contact some colleges. Shall we?
Caleb: I’m down.
[01:08:20] Thanks for listening and where to reach us
Greg: All right guys, that's it for this episode. A couple of things to keep in mind is A, softball leads to asset misappropriation, and B, Caleb is very concerned about people who identify too closely with the game of softball.
Caleb: Look, yeah. I mean, be careful about how much softball you're playing. Okay? Just be careful.
Greg: So, softball addiction, it's real. Watch out.
Caleb: It’s real. And also, steroids. If you choose to do legal or illegal steroids, you will do tax returns faster.
Greg: Yeah, I think that's Adderall, actually, but you know, same thing. Same thing.
Caleb: Very close. Greg, where are you on the internet? Where can people find you?
Greg: So, I am on Twitter, on- @GregKyte. I am on Instagram, @ExposureDrafts. Those are some two great places to find me, you know, and LinkedIn. Just my name. That's a- it's a bald guy with glasses and a beard, that's me. What about you, Caleb? Where could people find you, out in the internet?
Caleb: I'm on Twitter @CNewquist, and my LinkedIn is my full name, Caleb Newquist.
Caleb: Yeah. You ready for some credits?
Greg: Yeah. Take us out, man.
Caleb: All right. Oh My Fraud is written by me, Caleb Newquist, and Greg Kyte. Our producer is Blake Oliver. Music supervision, sound design, editing, and mixing is by Zach Frank. He's the one who's doing all the work around here. If you liked the show, leave us a review or share it with a friend, and be sure to subscribe on Apple podcasts, Stitcher, Spotify, or wherever you listen.
Join us next time for more avarice, swindlers, and scams from stories that will make you say Oh My Fraud.
Greg: Oh My Fraud.