Transcript for Ed Shin is ordered to pay restitution, Chris Smith hires lawyer: Part 4
So just after a week you moved to Laguna to take this job with 800x, Ed's arrested for embezzling from LG? It was brand-new city, new job, and then the boss is arrested. You're like, what? It was a shock to us. Distressing. We'd just brought our kids down there. Ed got out immediately, and when Paul approached Ed, he kinda smoothed it over, like, well, no, it's fine. You don't need to worry about it. It's taken care of. Chris was shocked by it, too. And I asked Chris, you know, if he had anything to do with it. He said absolutely not. The impact of the lawsuit against Ed was really the moment at which the veil was lifted and Chris could see that Ed was just somebody to watch out for. And this company was making money. I mean, I heard something, maybe a few months later, but to the tune of $1 million a month. The company, yeah, was doing very well. There was a lot of money floating around. Even in the face of this serious embezzlement case, the company, 800xchange, is still making quite a bit of profit. And that means for Ed, continuing his lavish lifestyle, which includes the trips to Las Vegas. Ed would sometimes bring members of 800xchange with him to Las Vegas to talk business and to have fun. I saw him at the tables. No one ever knew how much money he was spending. My brother didn't have access to the business accounts. I remember sitting on the couch with Chris. I said, where are all your financial records? He said, well, Ed handles all of that. And I'm like, there should be complete transparency there, especially given his past behavior. At what point do you really become suspicious of him? March of 2010, things started to change. I could tell my brother's relationship with Ed had soured a little bit. Chris started to realize that Ed was someone who couldn't be trusted. He had swindled from his previous company. And it seems that Chris started to wonder, if he did it before, why wouldn't he do it again? Chris is realizing that he's in business with a con man. Chris is concerned that Ed is going to steal Chris' rightful share of 800xchange, and so he hires a lawyer, Ernesto aldover. Chris came to me and he said, my partner is a liar. And I'm afraid that he's going to take all the money that we're making. I need your help To see if we can't secure some of my interests. Ed shin is convicted of felony embezzlement in may of 2010. And then he reaches an agreement on the sentence. To avoid prison time, he'll pay restitution of roughly $800,000 dollars. And the only way he does not violate his probation and go to state prison is if he comes up with $800,000 that he has to get from 800xchange. The only way he can get that out of 800xchange is if Chris Smith agrees. Because Chris Smith is a part owner of 800xchange, Ed needs Chris' signature to free up the funds that Ed is going to need to resolve that settlement deal. Chris didn't want to sign the settlement because he wanted to make sure that the money that belonged to him was secure. There was a deadline for the settlement to be signed. We knew that it was early, the week of June 7th. Ed was under a lot of pressure from a lot of fronts. He owed $800,000 in a settlement to LG. He allegedly had some big gambling debts in Las Vegas to pay off. He's becoming cornered financially. So you've got this brewing conflict, and you've got one guy with an attorney trying to do everything right, and you've got another guy that is completely shady. So it's like two worlds about to collide. So Chris and Ed, met on June 4th allegedly to finalize the agreement. Part of the deal was that Chris would get access to the accounts, and what he expected to see there is millions of dollars just sitting there. That's all the profit that their business had been making over the past year. The only thing we were waiting for that day is that Chris had to be given access to the bank account so he could see that the money was still there. This is an email from Chris to me, dated June 4, 2010, at 12:34 P.M. I'm meeting with Ed now to go over statements. He fixed the log in. Everything looks normal. After that, a curious thing happens, which is that Smith's attorney gets an email from Chris Smith with a buy-out agreement. So, this is a shift. Instead of providing guarantees that Chris would have access to all the bank accounts, now Chris emails his lawyer telling him that he's selling his share of the company. This is an e-mail from Chris Smith at 6:01 P.M. It says -- Ernesto, I agreed in principle with Ed to buy me out. 700 K of the reserve will be paid in three installments, when Ed sends details, I will forward and we can discuss. Chris. And then I got this one page resolution. It says both Smith and shin agreed to execute the settlement in exchange for a good faith payment. My first reaction was, well, why is he doing this? This isn't what we had been negotiating for the past two weeks. When Ernesto aldover received that 6:01 email from Chris, it was a complete game changer. All of a sudden, it's a complete 180 from everything they'd been talking about. The following Monday on June 7, 2010, I receive an email from Chris that says the documents are still being prepared but I'm going on vacation for a few weeks to South America and that, let me know if you need anything. Chris has finalized his settlement with Ed and he's taken off, unbeknownst to Paul and his family who've been up in Oregon for the last two weeks, so they're completely out of the loop. Paul and Leah had flown up here to go to my nephew's wedding. So, tell me about this trip. You flew up here to Oregon. To visit family. And Chris dropped you off at the airport. He was, you know, sad that we were leaving. Gave him a hug. Flew up to Oregon. You were there for a couple communicated via text, you know, he'd be there to pick me up at the Long Beach airport. He just never showed up. Show me the truth
This transcript has been automatically generated and may not be 100% accurate.