HI 92 - Welcome to Putingrad with Franz Sedelmayer

Welcome to the Heroic Investing Show. As first responders, we risk our lives every day. Our financial security is under attack. Our pensions are in a state of emergency. A single on duty incident can alter or erase our earning potential instantly and forever. We are the heroes of society. We are self reliant and we need to take care of our own financial future. The Heroic Investing show is our toolkit of business and investing tactics on our mission to financial freedom.

Hello and welcome to episode 92 of the Heroic Investing show where we focus on those challenges unique to members of the armed services, to veterans, first responders, police, firefighters and EMTs. Hey. We also focus on those challenges and goals that are consistent with everyone out there who is looking to finish that W2 job and get something that provides more free time, more time with the family, more time to focus on those things that truly inspire you that I've referred to as that unique genius of yours. So in episode 92, this one's pretty close to Gary going off topic, if you will. It is very interesting to probably most members of the military and anyone who has, you know, gone back to the times of the Cold War or followed Russia at all after the breakup of the Soviet Union, all of the land grabs and other corruption that has kind of taken over that country, even after the Soviet Union. We're going to interview today and hear from Mr. Franz Saddlemeyer. And Franz is a German citizen, grew up in Munich, went to the Munich International School and then later came over and attended the University of Utah in Salt Lake. And ironically I was interviewing and when I was interviewing him, he was visiting friends and was back in Salt Lake City, Utah for our discussion. Fascinating talk with Franz. So Franz's history is that he moved to Russia in the late 80s and was there for five or six years while the new regime was coming to power. And there was some nationalization, if you remember, that occurred Boris Yeltsin put in place in the late 1994, I think it was. And he basically nationalized the resources that Franz had that he had built up while he was in Russia and basically got kicked out of the country during that period of time that he was there, though he was working for the government, the Russian government, and was helping them with legal disputes, municipal government department, et cetera. And he then started a corporation following that. The corporation, I think is under its same name now, if I understood him correctly. Its name is the Multinational Asset Recovery Company, or MARC for short. And he's CEO of that company. It's a US Based company, but he works with individuals across the globe, many different countries trying to recover assets that are in a foreign country and probably pretty difficult to get your hands on, if you can imagine. He is still the only individual who has successfully won a case against Russia and received compensation for his clients for assets that Russia had previously expropriated. He's the only person who's gotten assets from Russia that they owed someone, I guess is the right way to say that. He has gone on to reproduce that success in numerous different countries. He's written a book about his time there in Russia. I love the title. The title is welcome to Puttingrad. So I think you're really going to enjoy this. Perhaps it's not heavily on buy and hold income property investing, but I have some. I think it's fascinating and really enjoyed and had a great time talking to Franz. But in case you're pushing for the income properties and the lessons to be learned there, I have a couple really good episodes coming up on that topic. One is from a gentleman who has been doing this for 43 years down in Florida, Sarasota, Florida. His name is John Schwab and he runs an interesting education program that we'll talk about. But I mean, he's got some seat of the pants experience, having done this for five decades. And then the other is a student of his, a follower of his, and a very good friend of mine, Mr. Craig Horton. So both of those, there's nearly a century of experience between those two gentlemen when you think about their combined time in operating large portfolios of rental properties. So I think you really get a lot of value out of those two. We've got some discussions from Jason coming up as well from some of his creating wealth shows. And I want to implore you one more time, please take a moment, go to itunes or to Heroic Investing, but I think itunes is best and leave us a rating. I'd love to hear from you and if you have any feedback for me, please don't hesitate. You can send it directly to me. Garyarypinkerton.com thank you so much everyone and please enjoy this fascinating discussion with Franz Sedelmaier. Franz, thank you so much for joining us.

Thank you very much for having me.

Absolutely. So what I want to jump right into is this amazingly titled book of yours. Welcome to Putting Grad. And for those who are not students of history, you know, of course Stalin and many others in Russia's history have figured out a way to change cities names to themselves. And so this was a little bit of a pun. I don't think there is a Putin grad quite yet, but it's a nice title to talk about your time in Russia and I think being still the only person who's ever won a case against President Putin and Russia. Is that true?

We're not the only ones to win a case against Russia or the President's office, but we're the first ones who actually were able to domesticate the judgments and actually enforce them.

Oh, wow. Okay, tell us more.

We have handled in excess of 140 cases over a period of 18 years. We prevailed in most of those and we succeeded in taking away real estate that belongs to Russian trade missions in Sweden and in Germany. And we managed to foreclose on that. And we actually got paid and no one else so far got paid, ever. Wow.

So the Russian government paid out on a lawsuit in a foreign country.

Exactly. Exactly. The background of this was that we had holdings. I had a company in Russia in St. Petersburg, and we got nationalized by then President Boris Yeltsin in 1996. And we managed to go to arbitration under a so called bilateral investment treaty, which is basically comprised of a private tribunal which issues an arbitration award, which then we domesticated, for example, in Germany. And we also could domesticate it in Sweden. And we enforced and Russia tried to do everything in their power to stop us from doing so.

Wow. So you mentioned 18 years of work on this. When did you first start doing lawsuits or representing lawsuits against Russia?

We started on January 15, 1996. Okay.

About a decade after the Soviet Union came down and when the Russian Federation was pretty well established, I guess, at that point.

Right, exactly.

Okay.

And we were very hopeful that especially the beginning of the 90s, that Russia would develop slowly but steadily into a democratic society. And that all went very fine until 1993. And then we had the so called White House Putsch, which led Mr. Yeltsin to send tanks and actually shoot at their own parliament building. And after that, Moscow was back in charge, back in control. All the local initiatives ceased and we knew we were heading for a different time. It was also a time where it became apparent that the Elson family was engaging in massive corruption through the privatization process. And they got worried there for a while that things will catch up with them. Then they discovered Vladimir Putin, who after 1996 started working for the presidential administration for the so called Upravlini Dalami Presidenta. They saw that he was predominantly a very loyal person to whoever he worked for. Initially he worked for Anatoly Sapchak, who was the mayor of St. Petersburg, who was equally corrupt and he served as his fixer. And that what qualified him for the Yeltsin family. So they made him the chief of kgb. They appointed him prime Minister and then acting president in 1999. And as you know, in the year 2000, he won the popular elections.

Yeah, so then he went for a while and stepped back a little bit, but of course he's now back strong. So why did he do that? What was it about the Russian society that required him to stand aside and kind of put a puppet in there for a short period?

It was the Russian constitution that was drafted and enacted in 1994 and that prescribed the term limit, just like you have in the United States, of two consecutive terms. And then he has to step down. So in that case, he took what I call the clone, a person by the name of Medvedev, identical in size, if not identical in character, and put him in as president and remained the Prime Minister for one term and then came back.

So he's nearing the end of another two terms. Do we see that happening again or has. Has their legislation changed?

No, the legislation has not changed. What has changed is the time period. It used to be four years and now it is seven years.

Ah, so he's nowhere near the end of that.

Absolutely. So he's of course very hopeful that he has got the election process under control, as the Russians like to say. Which means I don't think any other candidate will even stand a chance. Especially the most dangerous candidate that he has against him is Mr. Navalny. Mr. Navalny was convicted of a crime of graft and corruption and fraud. And the judgment, the Russian judgment, was actually lifted by the European Court of Human Rights. So under the Russian constitution, in principle, Mr. Navalny should be able to run, but they will not allow him to run.

Okay, so that's 2019 that we're talking about there, I guess, right?

2018 is the elections.

Oh, it's 18.

It's going to be in two months. Actually, it's rather close.

Okay, I guess I should follow Russia a little closer. But you actually have mentioned something to me when we were discussing before the meeting that the Americans shouldn't be too worried about Russia or Vladimir Putin. Can you expand on that a little?

Well, you know, I'm in a comfortable position. I'm looking in from the outside. I'm from Germany, so I've been following this so called Russia collusion story that has been implied by many people and I have been amazed how blown out of proportion this whole thing becomes. People tend to think of Putin, like a superman, a dictator, a cold warrior that has a plan set out for the next 10 or 15 years, that he has a capability to destroy the west, et cetera, et cetera. I mean, nothing could be further from the truth. The Russians are very good in influencing other societies. I mean, their interference in the US Elections is a given. It's not something that requires a special order from Putin as a president. It is in their DNA, the DNA of the intelligence services to try to disrupt Western societies wherever they can. What they have done in the United States, they have done in dozens of other countries. I mean, just look at Hungary, Poland, the Czech Republic. They are financing any and all alt, right or left parties. The more radical, the better. They're giving out money. They support them through social media. They support them through their own propaganda channels like Russia Today, Sputnik, and you name it, anything to disrupt the west, anything to destroy our confidence in the rule of law, in freedom, freedom of speech, etc. So they have been discovering social media as a very efficient tool. And as you can see from the headlines in this country, in the United States, people take it far too seriously. Russia only has one twentieth of the GDP of the United States, yet we feel as if they would take over the world tomorrow. It's not going to happen.

Yeah, great points, great comments. I find it really surprising how much we give the dark knight, how much power we give we give their countries. So you have a very interesting company that you run, it's called Mark, it's Multinational Asset Recovery. And so we talked about a little bit of that with respect to Russia and the domesticating judgments. You operate around the world or the globe, or is it really aimed mostly at Russia?

It's not aimed at Russia at all. I do take a lot of my professional experience, of course, for my last 20 years, but we have partners in the business, we have lawyers, we have accountants, we have intelligence people, we have experts in the field of law, also international law, who will handle disputes of international character, especially investors that go into difficult countries where you will not find your classical Western style rule of law that is faced with a partner, a local partner, that will try to take over the investment, that are afraid of nationalization, etc. So we will make sure that we can secure the assets that they have on the ground, which at times also involves physical security. We will make sure that we provide them with a forum where they can go and sue for damages if the damage has occurred. We make sure that they can domesticate their judgment, the arbitration award, whatever it is. And actually be able to enforce that.

Wow, that sounds like the Wild West. It sounds like a very specialized trade. I guess specialty is the best way to say it, but I doubt there's a lot of competition in your world.

It's always the same. You know how law firms operate. They love to go out and win cases in a courtroom, and that's usually where it stops. But when it comes to actually collecting, when it comes to collecting money, this is going to be the difficult part, because usually the debtor sits outside, outside of our jurisdiction. So the art of the trade is to get to his assets. Yeah, that's what we specialize in.

Wow, that's amazing. Well, I'm glad there are people like you out there trying to spread rule of law across the globe. That's certainly what makes the wheels turn here in the west, right?

Absolutely. Absolutely. In the relationship with Russia right now, the biggest problem that we have is Western democracies, the United States, the European Union. We should not take the Russian bait. They have been very successful in sawing distrust between us. You know, transatlantic relationships. Europe in the United States, Canada in the United States, European countries, members of the European Union. Everybody seems to be on a different path these days. It's high time we come back on the same page, much like we had in the Cold War, realizing what the facts are on the ground. Who is the enemy? And Russia is clearly not our friend right now. And we should reunite and we should tackle that beast, and we should change the world to make it a better place.

What do you suggest? Are you talking sanctions or just political involvement or what are you thinking?

You saw that the United States government has issued a sanctions list just the other week, even though they chose not to enact it, which I thought was rather interesting. Why prepare a list and not do anything with it? The names on the list all translate. I know quite a few people on that list personally from my days, and I have to tell you, most of the names on that list are fleeting. Russia at a level that you will not believe. It's right out theft. The problem we have is the stolen assets end up in our economies. They end up in the United States, in the United Kingdom, in Germany and other places.

And affect us. Right?

It directly affects us. These funds are used to destabilize our own democracies. The Russian dream at the moment is that they will change us. They will change our rule of law. They will change our freedoms to their benefit. The assets they have are here. They're not in Russia, because there's no money to be made with investment in Russia. It's made here. And their families are here, the children are here. Some of them have a second and a third passport for the time after the gravy train stops running in Russia. And we just sit here and we let it happen. And they're using our rule of law to protect their stolen assets. Check this out. It's amazing.

Yeah, that's true. They certainly are doing that, but. And they're also trying to attack the one thing that we have, you know, which is, is that the rule of law is effective, you know, that you can actually maintain freedom. And, you know, I think back to the actions of our military in places like Iraq and Afghanistan and all of the wars that came before Vietnam. And there's been this resistance to subject or to lower ourselves to the actions of our enemy. And the real reason is because the only way that we are ever able to spread freedom and democracy is if we demonstrate through continuous action that, you know, we're above that kind of activity. Right.

So absolutely.

It would be so much easier to combat this stuff head on.

Right, right. But one thing that belongs there to do that is the public opinion. And when you read the headlines these days and all the commentaries, you know, it's like everybody seems to be set in panic mode and there is no reason for doing that. There's no reason at all. If you look at the cold facts of the matter. Guess what? We're in good shape. We are sitting in stable countries and stable democracies and we're going to be around for a long time to come. It's high time we get our confidence back.

Yeah. So tell me about. I have long believed or felt that the ability or the frequency of terrorist acts, small terrorist acts, you know, garbage can bombs and things like that has been far more common in Europe with the, you know, the many borders between many countries and close to Asia. Am I way off there or. The reason I asked the question is because we're also very fascinated in America with, you know, being safe everywhere we go. You know, the bomb event at the Boston Marathon was just unbelievable in America. And I think we live such sheltered lives here. But could you speak a little bit to what life's like in Europe before and after 9 11?

911 has changed everything. I mean, I, for one, I saw the towers fall and I was in. I was in depression for days and weeks. It was amazing. It was just changing times. But thank God we worked our way out of it and we became active. One thing people have to understand About Europe, I mean, it's. You take the distances in Europe and you will see it's very easy to cross borders. We have an influx of at least 2 million people, political refugees from Syria, from Libya, from North Africa, from many, many other places. And the security is a main concern, but we are not able, simply physically not able to control every single person that comes in. We cannot vet these people when they come to the border. And when they say, I'm a political refugee, a great number of them have disposed of their passports, so we can even identify them. We cannot check their backgrounds. So it is a lot easier for bad guys to use that process, which is a humanitarian duty, to take in people that suffer from political repression in their home countries. So it has just been so many people in volume that it's just hard to control. And that's why we are fighting an uphill battle. Hopefully we'll get it under control, but it's not anytime soon, unfortunately.

Yeah. Well, that's been a fascinating discussion about Russia and putting them in perspective. I think that will bring a lot of perspective and solace, actually to Americans. Anything you wanted to cover on President Trump and Putin and all of the stuff that has come out after the election? Any thoughts on that?

Absolutely. I mean, again, here I follow the news and I'm avid reader of many American publications, and I'm amazed about this whole Russia collusion story. I mean, the Russians are known to try to recruit many people of any sphere of life, especially politics, so that they reach out to people in the Trump camp. To sitting people in politics here in this country is not unusual at all. Again, it's a standard operating procedure for their intelligence services. So I'm fascinated that everybody seems to be taken by surprise. It's quite another question how efficiently they went about it and if they really got any mileage out of it. But they have been very successful in making this a big subject here. So as far as the Russian mission is concerned, there were very successful in disrupting the election process in the aftermath, as you can see with the Mueller investigation. I'm sure there's going to be certain convictions, but I don't think anything is going to be per se, anything to do with giving up secrets to Russia or anything like that. I think it's the fallout, more the obstruction of justice part that will lead to convictions, but I don't think anything else.

Yeah, so the distraction, the disruption was the ultimate goal probably to begin with. Right. Just as you said, standard operations of their services, their Secret Service.

And when you look at the reality we had a German Chancellor by the name of Gerhard Schroeder. He now works for a Russian oil company since many years since he retired from office. He's one of the best known lobbyists who runs around Europe and the world and tries to lobby for the Russian cause. The Russians are known to have recruited over 4050 people, mostly from politics press in the legal field to lobby for them in Germany alone. So what is true for Germany certainly would be true for the United States. Wow.

Interesting. So, well, this has been fascinating. What France? Have I forgotten to ask that you want to talk about where we can.

Buy the book there?

Of course, of course. A fascinating book called welcome to Putting Grad and I'm sure it's on Amazon. Do you have other choices? And also please add how people can contact you.

Please Visit our website www.welcometopootingrad.com and you will find our ebook, our audiobook and our hardcover book. And of course look us up on Amazon.com just type in Putting and I think you will find it a great read. It's written with a good portion of humor. You know, life is serious as it is, but there's always a good story to share and I think you enjoy reading it.

I love it. So. And is there a contact information on that site or should they go to Mark?

They can go to Mark as well. Just type in Franz T. Seidelmaier and I will come up.

Awesome. That's wonderful. And then of course there's the info@markcompany.com as well. That will work well, Franz, thank you so much. Enjoy the rest of your time here and a safe trip back to Germany.

I will. Thank you so much for having me. This was fun.

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