Editor’s Note: This is the latest in a series of business history feature stories. Suggestions for future Fifth Monday articles are welcome. Please contact Gwen Moritz at (501) 372-1443 or GMoritz@ABPG.com.
Not many people know that John Rogers was a millionaire real estate investor before he began serious work building his sports memorabilia and photo empire in North Little Rock.
That’s because he wasn’t. It’s a big, fat lie.
Rogers didn’t own the largest day care center in the South either. That is another of his lies.
He didn’t find a way to spin straw into gold by acquiring newspaper photo archives in exchange for creating a digital library and profitably selling the images for millions and millions of dollars either.
That was an ongoing lie that got fatter with each passing year of inflated revenue claims, and it ultimately contributed to his undoing.
It seems one of the youngest Eagle Scouts forgot the first words of the Scout Law: “A Scout is trustworthy …” (See When Scouts Go Bad below.)
Rogers’ lying ways finally caught up with him three years ago after federal investigators, creditors and investors began discovering and revealing that his bluster had crossed over to the realm of criminal fraud.
Rogers didn’t lie to his lenders in a desperate move to save his company because of a downturn in the economy. That was a lie on top of a lie he told to mitigate his criminal acts.
In a truthful moment, standing before a federal judge on March 6 to plead guilty to wire fraud, Rogers provided a simple explanation for his felonious lies.
“It was for personal gain,” said Rogers, according to the Chicago Tribune. “Greed.”
The money he raked in from his bogus sports memorabilia tactics and wheeling and dealing of photo collections funded a fabulous lifestyle for him and his family. As a convicted felon, he wistfully described it as “a once amazing life.”
Along the way, Rogers wrote big checks and made donations to charities, too.
“He’s certainly generous,” said one formerly close associate. “With other people’s money.”
Other people’s money also provided the financial foundation for his big-time business endeavors. But once upon a time, Rogers claimed his personal real estate fortune as the initial funding source for his photo archive business.
That’s what he told Chris Olds, editor of Beckett Baseball. On Sept. 20, 2011, Olds posted online a question and answer session with Rogers that included this exchange:
What kind of capital did it take to start the business, and what kind of range is there for your purchases?
“To pursue this, I liquidated real estate holdings that I had and was able to self-finance the start with a $10 million investment,” Rogers answered. “There was not only the acquisition of photo archives, but the investment in equipment, staff, headquarters and more. It took millions, and ultimately, financial institutions began to pursue us to back our business.”
(The following year he would tell his story to the Arkansas Times, omitting any claim of a real estate fortune and focusing on his humble roots in North Little Rock and his baseball card trading prowess while a college student.)
Big Bounced Checks
That part about financial institutions pursuing his business was premature. Lenders didn’t begin ardent pursuit of Rogers until they started suing him in 2014 for nonpayment of loans.
His relationship with three banks that provided financing for his business dealings all came through introductions, according to sources and court filings.
Rogers struck up his first significant banking relationship for his growing photo archive business back in 2009.
That relationship with Heartland Bank came after he made news in 2008 for buying a rare Honus Wagner baseball card for a purported $1.6 million. But the relationship with Heartland grew tense as irregularities in his accounts began to grow.
Among the problems were bounced checks, really big bounced checks that resulted in six-figure overdrafts.
Finally, Rogers was warned if it happened again Heartland officials would have to file a suspicious activities report that the movement of money in his account showed signs of money laundering or fraud.
There was talk of Heartland expanding its financial relationship, but only if Rogers agreed to hire a chief financial officer, produce audited financial statements and provide the bank with the additional security of warrants for possible ownership in his business if things went sideways.
Rogers didn’t have any interest in those conditions, and thanks to a new acquaintance he had made, a replacement for Heartland was at hand.
William “Mac” Hogan introduced Rogers to First Arkansas Bank & Trust in Jacksonville after making several seemingly lucrative sports memorabilia investments with him. That led to a financial relationship between the bank and Rogers in December 2011.
Hogan had a longtime relationship with Larry Wilson’s bank through his Jacksonville business interests, which included ownership of PoloPlaz Inc., a wood floor coatings manufacturer.
Hogan’s confidence was won over by personal investments with Rogers that delivered big returns and paid like clockwork. Both Hogan and Wilson would later learn that many of Rogers business deals were nothing more than pieces of a Ponzi scheme.
If ever a lender should be happy to have lost a customer, great must be the rejoicing at Heartland Bank.
At last count, First Arkansas Bank & Trust has a $15.5 million judgment against Rogers on unpaid loan guarantees. Some of that money was used to repay the outstanding debt at Heartland.
Hogan also introduced Rogers to Pete Maris and his Bank of Little Rock in late 2013. A month before the federal fraud investigation of Rogers became public, the bank loaned Rogers $900,000 on Dec. 23 to buy scanning equipment.
To add urgency to the loan request, Rogers said the deal represented a $200,000 savings if the equipment could be bought before Christmas.
But it was another phantom deal concocted by Rogers. The transaction was phony. The invoice was fake. The company selling the nonexistent equipment was a corporate figment created by Rogers, who absconded with the money.
‘Counterfeiting Machine’
According to former associates, it wasn’t the first time Rogers committed bank fraud. During his run with Heartland Bank, Rogers pledged assets he didn’t own to help secure funding from the bank.
The serial numbers corresponded to real equipment, but Rogers didn’t own it.
“I know we borrowed a lot of money,” said one former staffer at Rogers Photo Archives. “I know we were selling a lot of stuff on eBay. I thought we had the potential to make money.
“I think it could’ve been successful if he had just taken his time with it. But he’s just not that kind of guy.”
After hearing of his lucrative payouts, one North Little Rock businessman met with Rogers about the possibility of investing circa 2011. His recollection of the dialogue:
“Tell me how this deal works,” he said.
“I only take $100,000-$250,000 and pay 25 percent quarterly,” Rogers said.
“Do what? When he told me that — and I had read in the Arkansas Democrat-Gazette about how much business he’s doing — I wondered ‘Why would he offer me this high of a return?’”
While some outsiders were questioning the math of it all, some insiders were laughing and shaking their heads over how much money Rogers was telling the media he was making.
A forensic audit of his business records in 2014 uncovered that Rogers booked borrowed money as revenue, which pumped up the balance sheet. The appraised insurable value of assets was twisted into appraised value.
“Money coming in as loans or investments was shown as revenue or sales,” said Roger Rowe, attorney for First Arkansas Bank & Trust. “All of the tax returns he gave to the IRS and the bank were all wrong. They were fraudulent.”
Some believe the small day care business that Rogers and his then-wife, Angelica, owned is what provided Rogers with his first real taste of financial success. “That really got him started,” said a source familiar with his business dealings. “That was his cash cow.”
Others believe years of producing and selling counterfeit sports memorabilia was an even bigger source of income.
“He was a counterfeiting machine, a fake memorabilia machine,” said one former associate.
In an email once posted on his Facebook account in April, Rogers lamented: “I have shit all over a once amazing life. I have lost everything, including my freedom.”
His sentencing hearing in Chicago’s U.S. District Court is scheduled for Sept. 12.
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When Boy Scouts Go Bad He traveled the fast track to become an Eagle Scout on Jan. 18, 1987, 20 days shy of his 14th birthday. His advancement through the ranks of Scout, Tenderfoot, Second Class, First Class, Star and Life to become an Eagle was accomplished in the minimum time frame allowed under BSA guidelines: “If you can do it in the shortest possible time, he did it,” according to the Quapaw Area Council of the BSA in Little Rock. But even in his youth, Rogers had a dark reputation among some parents for being manipulative. That was an attribute that apparently overshadowed his more noble traits. “He liked attention and being out front,” said one man whose son was a friend of Rogers. “He liked to start a commotion. But he was adept at escaping and staying out of trouble.” He grew to 6-6 and more than 300 pounds. Rogers looks like a one-time high school offensive lineman who went on to play several seasons at Louisiana Tech. And he was. Even as a kid, Rogers was big. He had a personality that matched his physique, too. “Everyone knew him,” said one man whose acquaintance with Rogers goes back nearly 40 years. “But his real circle of friends was small. I don’t think you’re going to find too many now who will defend him. He hurt too many people. He was so deceptive.” When his fraud-tainted business blew up and the lawsuits began flying, the Facebook banter among his high school classmates exploded. In some cases, old hurts were exposed in accounts by some of his classmates who remembered him as domineering and threatening since grade school. “It’s about time,” said one poster, who still bore the emotional scars from childhood encounters with Rogers. “This couldn’t happen to a nicer guy.” These days, Rogers is devoting more of his own Facebook posts to wholesome topics such as family, friends and Jesus. Perhaps he’s sincere. Hard to tell with John Rogers. “Some have sympathy for him,” said one man who has known Rogers most of his life. “But he needs to go to prison.” |