Billionaire Blind Spot
A failed entrepreneur fleeced the super rich. His bankruptcy records were public.
This Week In Blunders – March 1-7
“Trust me, Wilbur. People are very gullible. They'll believe anything they see in print.” – E.B. White.
All anyone needed to know about Josh S. Verne was that he blew up the decades-old furniture company his daddy left him.
Creditors forced Home Line Furniture Industries into bankruptcy liquidation in 2011. And he did not get $80 million out of the deal.
But Verne, 48, was Philadelphia Main Line bred, living in a mansion in Gladwyne, making political donations, and glad-handing the elite at country clubs. So he moved on to the next venture. And the next flop.
First there was Workpays.me, a digital platform that allowed people to buy stuff through payroll deductions. Verne told investors he’d sold it for somewhere between $30 million to $100 million. In reality, it sold for about $4 million, of which Verne only received a fraction.
Then there was FlockU, a social media platform for college students. Verne told investors it sold for $60 million to $500 million, depending on the audience. In reality, it shut down, and its website and domain were sold for $1.
So then comes his really big idea. It’s called Ownable. It’s going to sell consumer electronics – like laptops and smartphones – to people with weak credit on a rent-to-own basis.
He raised $31 million from more than 110 investors, selling stakes in Ownable to friends, family and even a few billionaires.
How could a fumbling nepo baby pull off all that? One of his tricks was an account statement from Goldman Sachs showing $50 million in assets. It was fake. Verne didn’t even have an account at Goldman Sachs, but who’s going to question Mr. Blue Blood?
Not David Adelman co-owner of the Philadelphia 76ers.
Not Michael Rubin, founder and CEO of sports-commerce giant Fanatics.
Not Bart Blatstein, one of Philadelphia’s best-known real estate developers.
Not even the Ben Franklin Technology Partners of Southeastern Pennsylvania, a state-supported investment fund, bothered to check.
Apparently, it’s where a penny saved is a penny burned.
They all pumped millions into Verne’s charade. Did they even check the bankruptcy court? Did they even do a basic background check? Because very little of their money went into Verne’s company. Instead he used new investors to pay off old investors in Ponzi-fashion and spent the rest on himself.
See, when you’re playing the part of a rich guy, you’ve got to spend like a rich guy.
“This wasn’t a poor man who was trying to feed his family,” U.S. attorney Jerome Maiatico said in court. “He wanted to live a lifestyle that he couldn’t otherwise afford.”
Verne spent more than $9 million of the money he raised on rich-guy stuff: Private jet travel, country-club dues, political donations, personal investments, renovations on his Jersey Shore vacation house and an elaborate Bat Mitzvah for his daughter.
To keep the charade going, Verne pulled all kinds of stunts. He sent fake bank and FedEx confirmations that purportedly showed transfers of funds, and he even forged an employee’s signature to sell the employee’s stock to raise cash.
When his life fell apart, he moved out of his $1.7 million mansion in the upscale Philly suburb of Gladwyne to … well, where else but a ritzy high-rise condo in Fort Lauderdale, Fla.?
On Wednesday, Verne was sentenced to more than nine years in prison. He also faces a civil action from the Securities and Exchange Commission, which details his fraud in the complaint it filed in 2023. The court also ordered Verne to forfeit $12,173,759 and pay a $1,300 special assessment, which he’ll be hard-pressed to do from the pokey.
He pleaded guilty in March 2025 to nine counts of wire fraud, three counts of securities fraud and one count of aggravated identity theft.
Turns out what was “Ownable” were his investors. And in a way, the people of the Keystone State can be proud. As one fine, upstanding Pennsylvanian, W.C. Fields, once said, “It is morally wrong to allow a sucker to keep his money.”
The Great Salad Oil Swindle
Financial history is replete with otherwise smart investors skipping their homework.
In 1963, a New Jersey, commodities trader borrowed as much as $180 million, or about $2 billion in today’s dollars, using soybean oil as collateral.
Anthony “Tino” De Angelis ran Allied Crude Vegetable Oil Refining Corp. and gave Wall Street a basic physics lesson: Oil floats.
He filled his company’s storage tanks with mostly water adding just a few feet of oil on top and then borrowed to the hilt. When the scheme imploded, it almost bankrupted American Express, which was among his biggest lenders.
Click here to read more about De Angelis, who has been inducted into the Business Blunders Hall Of Shame.
They would cook your books … and eat them, too
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