- January 31st, 2002, at 7:20 in the morning,
not to be exact but our building was surrounded
by 48 FBI and IRS agents,
and that turned into the largest health care case
in history.
(soft, suspenseful music)
So before I started Vertical,
I spent probably the last 30 years of my life
in health care, and had a pretty good run.
We did a lot of things in health care
until we got into a little matter with the U.S. government.
We were indicted with 136 criminal health care charges
and one tax charge.
It was practicing medicine without a license,
which we weren't.
It was Medicare kickbacks and all different kind of things
related to healthcare.
When the government showed up at our front door,
we had absolutely no idea this was going to happen.
We had not even a clue.
And it turned out to be a whistleblower suit.
So, when you get indicted, it says
Todd S. Kaplan versus United States of America.
So, first, when they surround your building, right,
and they walk in with guns drawn and tell you,
"Hands in the air."
That's a pretty scary thing.
We had no idea what to do.
We called one of our attorneys
and he had no idea what to do either,
'cause this had never happened to any of his clients.
And it was about two years before anything really happened,
and I absolutely remember that date,
'cause I had just landed in LAX from Washington DC.
And when I land, what's the first thing you do,
is you turn your cellphone on.
And when I turned my cellphone on,
my mailbox was full, and it was my mother
and my brother and my business partner,
everybody saying, "Call me, immediately."
And the first call was to my mom, who said,
"Honey, I think I saw you on TV."
We got indicted with more counts than Enron,
WorldCom, HealthSouth, Adelphia Cable,
and Michael Kowalsky from Tyco.
It's really hard to explain to you
the way you really feel
because when you're around people and you're around
your family and your friends, it's not too bad,
but when you're goin' to sleep at night
or driving to the office or, worse,
when you're on a long airplane flight
and there's nobody there but yourself,
and you keep thinking about that,
you know, it was 137 charges, punishable by five years
for each one of those charges,
that's six, seven hundred years in prison, right?
Thinking about never seeing your family,
never seeing your friends,
that's a pretty tough thing.
I truly know what it feels like
to be at the bottom.
When you fight the U.S. government
and it says your name,
United States of America versus Todd Kaplan,
you understand what it is to hit rock bottom.
There's nobody gonna hire you at this time.
There's nobody who's gonna invest with you at this time.
And you still have a family, children in school,
and mortgages to pay and you keep wondering,
oh my god, what am I gonna do?
And you just, for me, I always have a saying,
the 10 magic words,
never give up, never give up, never, ever give up.
So, I don't know if I'm not smart enough,
or if I just kept fighting,
so you just keep going.
But, yeah, you go through that feeling
several times a day.
Oh my god, what do I do next?
And the government finally settled the case with us.
So the government dropped the 136 healthcare charges,
those went away.
I pleaded guilty, failure to pay $22,000 in income tax,
and we actually pleaded guilty in the courtroom that day,
and he banged the gavel down and he fined us each $100.
I looked at my attorney and said, "Wow, $100,000.
"That's a great deal."
And he goes, "No, Todd, $100."
Unfortunately, with that $100 fine,
I still became a felon, so,
and you still deal with that every day.
Once you've pled guilty nobody really looks at it,
they just said, oh, that's the guy who was charged
with the most healthcare charges, criminal charges, ever.
So, it kinda makes it tough to do deals
in that industry because nobody really
looked at the outcome.
Nobody cared about the outcome.
And anybody who read the outcome would, again say,
oh, he had a lot of great attorneys
and he spent a lot of money, that's why he won.
So, I'm tryin' to figure out what's my journey gonna be?
What am I gonna do next?
And I happened to be at a YPO conference,
when I said to one of my buddies, "What are you working on?"
He said, "I just moved $9 million into a bank account,
"I'm opening up a legal grow facility."
And I said, "Well, that's great!
"What's a legal grow facility?"
So, I've spent the next six months
talking to almost everybody I could in the space
and you gotta remember, a lot of people
in this space were in the black market.
We're just converting to the gray market,
and now it's finally the legal market.
I spent 30-something years of my life
wearing a suit and Brooks Brothers monogrammed shirts
and now I'm wearing T-shirts and dealing with guys
who only have first names.
So, going into the cannabis space
after fighting the U.S. government,
aren't you going from one problem,
are you worried about going to the second problem?
So my feeling was if we did everything right
and we were transparent, then we wouldn't have a problem
going forward.
And always believed if you have the right people,
and the right team, we'd be successful at it.
When I look at everything we've gone through
and I try to see the silver lining,
what you really find out, I think, is
who truly are your friends
and what's truly important in life.
And that we're all here for a limited amount of time
and you better be doing something that you really enjoy.
To me, it's never giving up.
You just keep fighting and
I'm not going to let anybody beat me,
so I get out of bed every morning,
that's what I do.