How Ed Shin met the business partner he later swindled: Part 2

Joe Gray said he met Shin at Bible study and gave him a top job at his company. Gray said Shin then recommended he hire Chris Smith but before long, Gray noticed Shin lived beyond his means.
10:01 | 01/25/20

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Transcript for How Ed Shin met the business partner he later swindled: Part 2
Chris has dropped off the grid. And he has taken off to this wonderful surf trip with a beautiful woman. He's got no phone. He's got no camera. And they're only getting periodic emails regarding what he's doing. As time goes on, the emails take a downright sinister turn. Chris was emailing, you know, stuff about, you know, not wanting to come back. En why, just painted a picture that he was kind of losing sight of who he was. His messages are not the kinds of things you'd really expect. They're just -- they're wondering, what is going on? Show me the truth This past year and a half was such a nightmare for me and I even contemplated doing unspeakable things because I was so stressed, angry, scared and confused. At that point it was just, this isn't making any sense. This guy -- he's lost his mind, Chris's family didn't know what to think, because he seemed so up in some of his emails and then he talks about even contemplating suicide. Yeah, we were replying the best way we could to comfort him torque reassure him, do anything Yeah, they were super worried. I don't know if I'll ever get over some of the things in my life. But this traveling and living on a sustenance level has really started to change how I see things and what matters to me. I'm actually journaling now. And one day I'll share some of the things I wrote down about our relationship growing up and the That happened within our family. This disclosure about problems that Chris said he experienced as a kid, this comes out of nowhere for the family. As far as they knew, he'd never experienced any emotional trauma. That was strange to me. Because we had a good relationship. There was -- what he was saying wasn't true. It was just like someone that was just very conflicted, and so, that's when it got really alarming to my parents. When they started getting emails like that about my brother's past and childhood. And we started to have suspicions but didn't want to entertain that train of thought too much because of where it would lead to. I think it was so emotionally hard to even think about. Chris has been gone for several months now and his emails reflect a lot of mood changes, erratic behavior almost. In the beginning, it's very happy. Then he reveals that he's very depressed, considering the unthinkable. Then he goes back to very happy and adventurous once again. According to his emails, Chris has now ditched the playmate and is on his own. As time goes on, the family gets increasingly worried and they begin to wonder, are there some clues that we've missed? What would make him turn away from all the things he held so dear? So naturally it makes sense that they want to talk to his old business partner, Ed shin. What might he know? Ed shin was the son of immigrants. And he grew up in a conservative Christian home. And they demanded achievement from him, and that's what he delivered. He was a really good student. He was a good athlete. Pretty much everything he did, he did well. And eventually he goes to uc-san Diego. On paper, Ed shin was more naturally set up for success. Chris struggled in school. He didn't make it through college. Ed was doing all the right things, getting his degree, getting his first jobs. He had sort of the more obvious path to becoming successful in business. Ed shin was an upstanding member of his community. He was a married father of three. He was the member of a Christian megachurch and was religious. Dressed very nicely. He just looked the part of the successful business and family man. Ed and his wife were members of our church here in Temecula, California. Joseph gray, who's actually run successful companies and he's a completely legitimate businessman, and he meets shin in this church group bible study. I thought he had some skills that, ironically, were in the vein of what we were looking for as we were starting a new company called lead generation technologies. Listen up America. Have you been denied credit? Lead generation, if you've hear this ad that says, reduce your credit card debt. Get a new mortgage. And they tell you an 800 number at the end of it. You call in. They take down your information, and then they actually sell that off to companies that are in the mortgage business or in the credit card business. A few examples up here. Call 800 -- So it's really just a way of grabbing customers and selling them off to the highest bidder. Call now. So the more phone calls that are generated by these television ads, the more money your company gets? This is how Google makes most of its revenue today, they sell clicks online. We're selling phone calls. So shin is hired by Joseph gray. Joseph gray gives him a job. And it's a position of trust. What I really needed was somebody to go out there and develop a marketplace for the leads that we would be generating off of our television advertising. And I felt he could be employee number one. We gave him that kind of title. In early 2008, Ed and Chris were both working in the lead generation industry, meet each other, and hit it off. And Ed recommended to Joseph that this guy Chris would be -- he's a promising up and comer. I think we should bring him on board at LG technologies. On the sales side, Chris would have been employee number two, but I would say that at that moment, Ed and Chris were kind of the face of the company. So I was optimistic. The guys seemed to know what they were doing, seemed like they were executing, and we were growing. Now, the key to building a successful lead-generation company is finding buyers that are willing to pay big money for those leads, those calls that come into the 800 numbers. To find those buyers, there is no better place perhaps on Earth than the convention circuit in Las Vegas. That's where Ed goes to try to rustle up these buyers. While Chris is back at LG technologies, Ed is trying to entice these new clients with parties, booze, and women. Along for the ride, in one of these incredibly lavish junkets in Las Vegas is one of Joe gray's most trusted employees. He's an ex-marine called Michael Montgomery. So we landed in Vegas. We get picked up by the phantom fury rolls Royce that was part of the Wynn. They pull us up to the entry of the Wynn. The suite was bigger than any room I've ever seen. Three bedrooms. It had a massage room, its own dining room. Just picture this -- one of the nicest hotels in Las Vegas. It is a two-story suite with butler service, its own billiard room, and an elevator. Ed would hire what are known as atmosphere models or arm candy models. And these are beautiful women in Las Vegas who, for a fee, will come and hang out at your party. So it would just look like to Ed's associates like, this guy is the coolest guy in town. Look, he shows up and suddenly these women flock to him. My early impressions of Ed were -- he seemed very charming, but then there were sides of him that I really started to see that were not so charming. Ed shin had two lives. He's got his churchgoing, upstanding, community member life in Orange county. And then it turns out he had a real love of gambling. And he was the type of player who could win or lose $100,000 in the space of a couple hours. I come down, and I'm walking through the casino floor. And I saw Ed sitting right at the blackjack table. I would suspect that he had about $20,000 worth of chips sitting at the table there. Ed shin is gambling so much money in Vegas that they comp him that suite. I heard crazy stuff like that. I felt, based on the relationship that we developed, things I had done for him personally, I felt that there would be some measure of loyalty. That Ed might be one of the last people that would take advantage of my generosity and kindness. But it all boiled down to one salient point in my mind -- Ed was living beyond his means. I think I spent the next week working from my home, trying to figure out, what's going on here? Because we knew there was some fraud that had taken place. I think it was at that moment that I realized, oh, boy. We've got a big problem.

This transcript has been automatically generated and may not be 100% accurate.

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