Speaker 1: I remember this so clearly. I was in my powder
Speaker 1: blue pajamas and I came out and I said something
Speaker 1: to him, I go, what are you involved in? Are
Speaker 1: you being investigated by the FBI? And he looked at
Speaker 1: me so coldly, like he never knew me, and he said,
Speaker 1: if I go down, I'm taking you with me.
Speaker 2: I'm Andrea Gunning. And this is Betrayal, a show about
Speaker 2: the people we trust the most and the deceptions that
Speaker 2: change everything. Recently, we got in touch with a group
Speaker 2: called the White Collar Wives Project. It's a support group
Speaker 2: for women who were blindsided by their husband's finance crimes.
Speaker 2: Their mission is to help guide women through the fallout legally,
Speaker 2: financially and emotionally. For members, it's a place where they
Speaker 2: can feel supported and most importantly, believed, a place where
Speaker 2: no one is asking the ever present question he didn't know.
Speaker 2: That's Libby Henry. She was one of the first members
Speaker 2: of the White Collar Wives and like all the women
Speaker 2: in the group, she was in the dark about what
Speaker 2: her husband was really doing at work.
Speaker 1: I didn't say, oh, honey, dinner's writing. And by the way,
Speaker 1: did you commit fraud?
Speaker 2: Libby grew up in Louisville, Kentucky, or as the locals
Speaker 2: call it, Lousvoe.
Speaker 1: It's almost like you've got something caught in your throat.
Speaker 1: We automatically know if you're not from here. If you're
Speaker 1: saying Louisville or Louisville.
Speaker 2: Well, I'm not from there. So for this episode, I'm
Speaker 2: going to be saying Louisville. Early on, Libby knew her
Speaker 2: family was like others. Her mother didn't get along with
Speaker 2: most people.
Speaker 1: She had an undiagnosed personality disorder. Today they call this
Speaker 1: borderline personality disorder. That at the time I didn't know
Speaker 1: what was wrong with her because there wasn't the Internet
Speaker 1: and nobody was talking about mental health back then.
Speaker 2: Because of her mom's mental illness, life at home was
Speaker 2: an emotional roller coaster.
Speaker 1: As I entered the ninth grade, I was pretty much
Speaker 1: trying to spend the night out all the time because
Speaker 1: she had such a problem controlling her emotions. I just
Speaker 1: tried to get away.
Speaker 2: She spent a lot of time at friends' houses, and
Speaker 2: by the time she graduated high school, she had one
Speaker 2: goal for her future. It was heartbreakingly simple.
Speaker 1: What I saw around meet my friend's houses. I wanted
Speaker 1: for myself. I just wanted to have a normal home
Speaker 1: because I didn't come from one. That was my big plan.
Speaker 1: That was it.
Speaker 2: She started college at the University of Kentucky. It's in Lexington,
Speaker 2: the horse racing capital of the world.
Speaker 1: Oh gosh, Lexington, beautiful play surrounded by these beautiful horse farms,
Speaker 1: rolling fields. When I got there, the first thing I
Speaker 1: thought is that I had some freedom.
Speaker 2: It was the eighties. Libby was carefree. She joined a
Speaker 2: sorority and quickly made friends.
Speaker 1: There were a lot of fraternity parties. They could have
Speaker 1: all these cag parties. You would go from one house
Speaker 1: to the next house. Lots of bands were always playing.
Speaker 1: That was a lot of fun.
Speaker 2: Her junior year, she went to the first kickoff game
Speaker 2: of the football season, and of course it was a
Speaker 2: big party.
Speaker 1: My friend came up to me and said, do you
Speaker 1: know Ted House.
Speaker 2: Ted House was in one of her history classes, caught
Speaker 2: her eye before, but they didn't really know each other.
Speaker 1: He was undeniably good looking, you know that, tall, dark,
Speaker 1: and handsome. He was all those things. She goes, well,
Speaker 1: he wants to go out with you, and I'm like,
Speaker 1: oh wow, okay. So later that same night he approached
Speaker 1: me and started talking to me, but he started talking
Speaker 1: about the history syllabus, and I think he was nervous
Speaker 1: because talking about the history syllabus was kind of boring.
Speaker 2: Livy left the party underwhelmed.
Speaker 1: But two days later my friend called me and she said,
Speaker 1: we need a double date. He really wants to go
Speaker 1: out with you, and I'm like, okay, And we go
Speaker 1: on a double date to this French restaurant and he
Speaker 1: was an entirely different human being. He was charming and
Speaker 1: funny and much more relaxed.
Speaker 2: It was like she was really seeing him for the
Speaker 2: first time.
Speaker 1: I thought, Gosh, this guy's so fun. Wow, you know,
Speaker 1: I like this guy. And two days after that he
Speaker 1: asked me out again, and we just kept rolling and
Speaker 1: kept going out, and it wasn't long before we were
Speaker 1: an exclusive couple.
Speaker 2: Lebby felt like herself around Ted. He was the first
Speaker 2: guy to make her feel that way.
Speaker 1: I was really comfortable with who I was with Ted,
Speaker 1: like I was always laughing. He liked that about me.
Speaker 1: He liked the humor.
Speaker 2: But it quickly became clear that she and Ted came
Speaker 2: from different backgrounds. To borrow a term from the horse world,
Speaker 2: he had pedigree private boarding schools, country clubs and summer
Speaker 2: trips abroad, but he wasn't pretentious about it.
Speaker 1: Ted didn't seem to care that I didn't have any money.
Speaker 1: That didn't seem to bother him.
Speaker 2: The difference in their upbringing meant nothing. They just wanted
Speaker 2: to be together.
Speaker 1: The mundane things that you do by yourself that don't
Speaker 1: see being very fun or of course very fun when
Speaker 1: you are head over heels with someone, and we were.
Speaker 2: Libby felt safe when she was with Ted. He had
Speaker 2: that kind of confidence.
Speaker 1: He's kind of like that protector, and things were taken
Speaker 1: care of. If I was having an issue, here was Ted.
Speaker 1: He was taking care of everything. He was always that guy.
Speaker 2: After a few months of dating, Ted took Libby to
Speaker 2: meet his parents. They were in town for a fundraiser.
Speaker 1: And I didn't really realize what I walked into. They
Speaker 1: are a very politically connected family. The first time I
Speaker 1: met them, they were having a fundraiser for the governor
Speaker 1: of Indiana.
Speaker 2: Ted didn't really prepare her for this scene, and to
Speaker 2: be fair, he couldn't have.
Speaker 1: I'll walk in the foyer of this absolutely beautiful home,
Speaker 1: and at first, you know, you're just so nervous because
Speaker 1: I'm like, what do I have to offer in this conversation?
Speaker 1: What can I contribute? That is very intimidating for someone
Speaker 1: like me who came from the background that I came from.
Speaker 2: Lebby tried to stay quiet, smile and hide the run
Speaker 2: in her stockings, but above all, she wanted to make
Speaker 2: a good first impression with Ted's parents.
Speaker 1: Yeah, do you remember wondering if Ted's mother thought maybe
Speaker 1: I'm really not good enough first?
Speaker 2: Then?
Speaker 1: But I got through it and his parents were very
Speaker 1: nice to me.
Speaker 2: Ted's dad was a successful businessman and his mother was
Speaker 2: a philanthropist, a patron of the arts type. The night
Speaker 2: of the fundraiser, Libby was just herself. She made them laugh,
Speaker 2: and it turned out that was enough for the House family.
Speaker 2: Pretty Soon, Libby became a regular fixture at Ted's family events.
Speaker 2: They made her feel welcome.
Speaker 1: They never seemed ostentatious to me. They weren't people that
Speaker 1: bragged about money. They had money, but nobody was bragging
Speaker 1: about it. They were very supportive, and they were interested
Speaker 1: in me. Things just seemed so effortless with them.
Speaker 2: Ted's family genuinely loved being around each other.
Speaker 1: So you can imagine when I'm with this family where
Speaker 1: things are so easy, and there wasn't chaos. That's the word.
Speaker 1: There was no chaos. I loved them, I truly did.
Speaker 2: As they got more serious, she and Ted opened up
Speaker 2: about their flaws and tried to help each other grow.
Speaker 1: He was the kind of guy that would get really mad,
Speaker 1: but then he would be like, okay, I popped off.
Speaker 1: That was always his thing. But he does know that
Speaker 1: about himself. And I wasn't the best either, because the
Speaker 1: one thing that I did not come out of my
Speaker 1: house with was coping skills. I came out of my
Speaker 1: house like a piece of Swiss cheese. I had a
Speaker 1: lot of holes.
Speaker 2: Ted and Libby started talking about their future. They both
Speaker 2: knew they wanted to have kids and stay close to family.
Speaker 1: It was within a year he asked me to marry him.
Speaker 1: He was nervous, but it wasn't some big gesture.
Speaker 2: He proposed in her living room with the ring behind
Speaker 2: his back. She remembers seeing his nerves. He was shaking.
Speaker 1: He's like, you know, I'm not really good at this,
Speaker 1: but I want you to marry me. It was sweet
Speaker 1: and I liked it.
Speaker 2: Ted had the ring custom made and it came with
Speaker 2: a special meaning.
Speaker 1: This woman named b Roth made all three of the
Speaker 1: daughter in law's rings. My mother in law had a
Speaker 1: sapphire and diamond emerald cut I had a sapphire and
Speaker 1: diamond Marquis, but we all had the sapphire and diamond
Speaker 1: to match our mother in law. I couldn't believe that
Speaker 1: I was marrying someone like Ted, not because he came
Speaker 1: from money, but because I thought his family was so
Speaker 1: close and they seemed like a cohesive unit. It was
Speaker 1: like that dream I told you when I was young,
Speaker 1: I'm getting married and I'm going to have that family.
Speaker 1: I remember thinking it's all happening for me.
Speaker 2: Once they graduated college, Liby and Ted had a big
Speaker 2: church wedding. They both took jobs working for the State
Speaker 2: of Indiana, just over the border from Lexington.
Speaker 1: I worked for the Department of Insurance. He was in
Speaker 1: land and acquisition, so he would go and talk to
Speaker 1: people and they loved him. Ted could talk to anybody.
Speaker 1: I mean he could charm anybody, and they loved him.
Speaker 2: Ted was passionate about real estate, so he found them
Speaker 2: the perfect home. Even though they both worked. Ted's family
Speaker 2: money helped them close on that first house.
Speaker 1: I knew he had a trust fund, because that's how
Speaker 1: we bought our first house with his trust fund. Are
Speaker 1: we trying to make our house a home? His mother
Speaker 1: would always come over bringing gourmet goodies.
Speaker 2: That year, Libby got a special gift from her mother
Speaker 2: in law, something to symbolize their bond.
Speaker 1: Tut's mother had a circle pennant made for each daughter
Speaker 1: in law with little pearls around it, and she said,
Speaker 1: this is a symbol of our circle, our family, and
Speaker 1: that you're in the circle.
Speaker 2: Within the first year of their marriage, Libby found out
Speaker 2: she was pregnant with the baby girl. For a moment,
Speaker 2: everything felt perfect.
Speaker 1: About six months, I go to the doctor and there's
Speaker 1: no heartbeat.
Speaker 2: The baby had died. At six months. Ted and his
Speaker 2: family surrounded Libby, helping her through the grief. The doctors
Speaker 2: recommended she wait to get pregnant again, but she didn't.
Speaker 1: I that's that baby in May, and I was pregnant
Speaker 1: again in July, and then I had a healthy baby girl.
Speaker 2: At that point, it was a new beginning and they
Speaker 2: wanted a change of scenery to match. They started talking
Speaker 2: about returning to Louisville, Libby's hometown.
Speaker 1: And then Ted comes home and says, I've got big news,
Speaker 1: and I'm like, what kind of big news? And he said, well,
Speaker 1: I've got an offer to go into the mortgage business
Speaker 1: in Louisville. So when he said we're moving, I was like, yay,
Speaker 1: you know, going home.
Speaker 2: With their new baby. They packed up and started over.
Speaker 1: And we both got full time jobs. At that point.
Speaker 1: I worked for wait for it, a paging company, and
Speaker 1: pagers were the things that was big technology back then,
Speaker 1: and he obviously was in the mortgage industry. He started
Speaker 1: working for a friend and he was alone originator.
Speaker 2: The job came naturally to him. Before long, he started
Speaker 2: his own company, brokering mortgages.
Speaker 1: He liked it so much he started his own business.
Speaker 1: They seemed to do so well. He had a lot
Speaker 1: of employees that started working for him, a lot of
Speaker 1: them he knew. There were people that we knew, and
Speaker 1: it just seemed like this was just the absolute best job.
Speaker 1: He's got friends that work for him.
Speaker 2: The first few years in Louisville were like a dream.
Speaker 2: Libby had the normal family she'd always wanted. The only
Speaker 2: thing that wasn't going perfectly was Libby's health. When her
Speaker 2: daughter was a toddler, Libby began having intense back pain.
Speaker 2: She needed spinal surgery, but the pain persisted, so she
Speaker 2: and Ted sat down and decided that Libby should quit
Speaker 2: her job, at least for the time being.
Speaker 1: Ted said, you know, I'm making enough money, you don't
Speaker 1: need to go back to work. So I didn't. I
Speaker 1: would stay home for the next ten years. And that
Speaker 1: was a critical mistake for me.
Speaker 2: Ted's new mortgage business in Louisville was doing well enough
Speaker 2: for Libby to quit her job. That way she could
Speaker 2: focus on her health and their daughter.
Speaker 1: I did everything that stay at home moms do. You know, kids, playdates,
Speaker 1: everything they had to do with my daughter. You know,
Speaker 1: I was planning.
Speaker 2: It was Libby's job to handle their daughter's schedule, and
Speaker 2: Ted's job was to handle the finances, which he'd already
Speaker 2: been doing anyway.
Speaker 1: And I mean, I'm dyslexic. It affects my numbers. And
Speaker 1: Ted was like a human calculator.
Speaker 2: They'd been in Louisville a few years when.
Speaker 1: Ted came home and said that he had looked at
Speaker 1: this house in a neighborhood called Bridge Point, which was
Speaker 1: a very nice neighborhood, and that was a big leak
Speaker 1: as far as cost and the homes.
Speaker 2: He wanted an upgrade, something to reflect his success. Libby
Speaker 2: started drawing up renovation plans and interior designs.
Speaker 1: I walked in and I redid the whole thing, the yard,
Speaker 1: you name it. I did it. Everything that I conjured
Speaker 1: up in my head I was able to execute.
Speaker 2: When it was done, the house was perfect. It was
Speaker 2: going to be the forever home.
Speaker 1: Life seemed to be getting better and better and better.
Speaker 1: I never thought that money was an issue in my
Speaker 1: life at all.
Speaker 2: But Ted still wasn't satisfied. He wanted to become a
Speaker 2: Kentucky real estate tycoon, so he found new business partners
Speaker 2: to start another venture, flipping houses.
Speaker 1: Flipping homes in depressed parts of Louisville wasn't unusual back then,
Speaker 1: because the timeframe of this is two thousand, two thousand
Speaker 1: and one, two thousand and two, before the housing bubble burst.
Speaker 1: I mean, I knew so many people flipping houses.
Speaker 2: One of Ted's new business partners was a real estate
Speaker 2: consultant named Khalid.
Speaker 1: Khalid was a guy who grew up in a depressed
Speaker 1: part of Louisville, and Khalid had done well for himself
Speaker 1: business wise, so they went into business together flipping homes
Speaker 1: Khalid was from that area, and I think he knew
Speaker 1: a lot of people in that area, which made him
Speaker 1: a nice liaison.
Speaker 2: Ted and Khaled's business proved more successful than either of
Speaker 2: them imagined. The money was rolling in, and Ted really
Speaker 2: treated the family.
Speaker 1: We were able to do all of these things. For example,
Speaker 1: we were in Costa Rica. We were able to take
Speaker 1: our daughter to Bahamas, which was incredible. We were at
Speaker 1: Martha's vineyard. We were doing all these things that I
Speaker 1: could have never done. Now he's used to think this
Speaker 1: is great, you know, what a charmed life. I really
Speaker 1: truly was grateful for everything. And then things started to change.
Speaker 2: Because Ted's attitude started to change. He had always been
Speaker 2: quick to anger, but as Libby shared, he was quick
Speaker 2: to calm down. This time it was different.
Speaker 1: Like he would come home increasingly irritable, but I couldn't
Speaker 1: understand why it was ongoing. And I would ask him
Speaker 1: and he's like, oh, it's work, stress, it's work stress.
Speaker 1: Then he started waking up in the middle of the
Speaker 1: night like he was in a panic. But it was
Speaker 1: every night like clockwork, and I never can understand it.
Speaker 1: I'm like, what in the world, why do you wake
Speaker 1: up like this? Oh, I've just got a lot on
Speaker 1: my mind. I just thought, okay, well, there's stress.
Speaker 2: She knew his job could be intense. He was always
Speaker 2: managing multiple sales and home renovations, each had their own
Speaker 2: deadlines and expenses. But as the year went on, Ted's
Speaker 2: stress only mounted.
Speaker 1: But I kept asking and he kept getting a little
Speaker 1: bit short with me, and I was thought, gosh, what
Speaker 1: is the problem.
Speaker 2: Ted never shared details about his business with Libby. He
Speaker 2: kept it all inside, except for this. One day in
Speaker 2: two thousand and two. She walked into their bathroom to
Speaker 2: find Ted leaning over the sink and.
Speaker 1: I thought he was sick. And I said what's wrong?
Speaker 1: And his reaction was so unusual. He actually did have
Speaker 1: tears in his eyes and he said, it's that f
Speaker 1: N Khalid, And I said, what are we talking about?
Speaker 1: What's wrong with Khalid?
Speaker 2: Libby had met Khalid once or twice. He had always
Speaker 2: been polite to her.
Speaker 1: He's so angry, and he's saying, you know this, f
Speaker 1: and Khalid he screwed me over, He's gonna screw me.
Speaker 1: He just kept saying that over and our again. I go,
Speaker 1: I don't know what we're talking about. What are we
Speaker 1: talking about? And why are you angry with Khalid? And
Speaker 1: he said he's gonna screw me and he may kill you.
Speaker 1: He may kill our daughter. What those aren't words you
Speaker 1: expect to hear from your husband about a business associate. Ever,
Speaker 1: I was paralyzed for a second. I felt my chest
Speaker 1: tighten up because I thought, what do you mean kill?
Speaker 1: He's like, well, there's a business deal that's gone bad,
Speaker 1: and I don't know what that mf or will do.
Speaker 2: Libby wanted to go to the police, but when she
Speaker 2: said that, Ted quickly backtracked. He shook it off and
Speaker 2: told Libby to forget he ever said anything. But that
Speaker 2: wasn't going to happen. Her mind was racing. Was Khalid
Speaker 2: really threatening her and her daughter? Why would Ted say
Speaker 2: that to her? She got in the car and left
Speaker 2: the house.
Speaker 1: I start crying all that stress. I just start crying
Speaker 1: because I could not make sense of it.
Speaker 2: But when Libby returned home to ask more questions, Ted
Speaker 2: was gone.
Speaker 1: So I waited and waited and didn't come back. Well,
Speaker 1: I gathered myself together and I thought, I'm going to
Speaker 1: call his dad. I'm going to cause parents, and I
Speaker 1: can still remember his mother saying they were outside by
Speaker 1: the pool, and they absorbed all that information, but it
Speaker 1: wasn't like they were panicked like I was.
Speaker 2: A little while later, Ted's mom called back. Apparently they'd
Speaker 2: talked to Ted and he'd given them the full story.
Speaker 1: And they said, Teddy got a little spooped, and I
Speaker 1: thought a little spooped. You know, I didn't feel satisfied
Speaker 1: with that answer. She said, well, Ted's realized that Khalid
Speaker 1: might not be the most savory person. He's a little
Speaker 1: bit unsavory, and he's not going to consort with him anymore,
Speaker 1: do business with him. And I said, well, he said
Speaker 1: kill she goes he's just overreacted. I said, this seems
Speaker 1: a lot more serious than that, and she said, Libby,
Speaker 1: it's okay. He's not going to do business with him anymore.
Speaker 1: His dad's talked to him. And you know what, I
Speaker 1: believed that because his dad was telling me this businessman, stockbroker,
Speaker 1: graduate school educated man, highly respected, no nonsense man. If
Speaker 1: they thought that that was true, they just reassured me.
Speaker 2: They also advised Libby not to go around telling anyone
Speaker 2: about that conversation with Ted. She trusted his parents, but
Speaker 2: she was still unsettled.
Speaker 1: So that was not even a ragged flag. It was
Speaker 1: a red flare.
Speaker 2: When Ted finally came home, he didn't want to talk
Speaker 2: about it. He wouldn't talk about it. The house was
Speaker 2: filled with tension.
Speaker 1: And during that time things really started to go sideways.
Speaker 1: Ted's moods were so awful.
Speaker 2: Every day Ted was on edge. The days turned into weeks.
Speaker 1: So not only is he waking up at three o'clock
Speaker 1: in the morning, but I'm also waking up to the
Speaker 1: glow of the laptop. It's like he slept with that
Speaker 1: computer all the time.
Speaker 2: One night, Libby was home alone watching TV and she
Speaker 2: saw something that would change her life.
Speaker 1: I don't know if it was date lone. I don't
Speaker 1: know if it was sixty minutes, but it was a
Speaker 1: woman on TV and her husband died and she didn't
Speaker 1: know anything about her finances, nothing, and apparently she owed
Speaker 1: thousands of dollars to the IRASID. Of course she's on
Speaker 1: the hook because she signed those tax returns and she
Speaker 1: lost everything. And I was like, she is me, that
Speaker 1: is me.
Speaker 2: Since the beginning of their marriage, Ted had paid all
Speaker 2: their bills, paid off the credit cards, and managed their savings.
Speaker 2: When it came to their personal finances. She only knew
Speaker 2: what Ted told her, and as for his businesses, she
Speaker 2: was completely in the dark.
Speaker 1: So I went to him and I'm like, I want
Speaker 1: to fold her. And I wanted a fold her that
Speaker 1: showed me what happens if anything happened to him. I
Speaker 1: didn't know what would happen with the company, would his
Speaker 1: business partner buy me out? I mean, these were maybe
Speaker 1: even silly questions. I just didn't know anything. So when
Speaker 1: I started asking, he started pushing back, and I remember thinking,
Speaker 1: you know, that's not normal. Why is he defensive?
Speaker 2: The more Ted pushed back, the more insistent Liddy became.
Speaker 2: She needed to know everything. She wanted hard copies.
Speaker 1: I mean, every time I asked, got madder and matter
Speaker 1: and matter and matter, to the point we were having
Speaker 1: really big fights, but I'm still asking about that Faulder.
Speaker 1: Our arguments kept escalating because I thought, well, does he
Speaker 1: think I'm not smart enough to understand? Does he think
Speaker 1: he just needs to be controlling and he's the one
Speaker 1: that needs to be able to do at all. Never
Speaker 1: would I have thought he was involved anything that was
Speaker 1: an a fairies never didn't even occur to me.
Speaker 2: Libby never got that folder of financial documents because A
Speaker 2: few weeks later, Ted sat her down and in a
Speaker 2: calm voice, he told her the truth, or at least
Speaker 2: a sliver of it.
Speaker 1: Three days before Christmas, he tells me, we're bankrupt. We
Speaker 1: need to file bankruptcy. And I don't just mean any bankruptcy,
Speaker 1: I mean Chapter seven complete liquidation, bankrupt.
Speaker 2: Libby had spent a year begging Ted for financial transparency.
Speaker 2: The entire time, he never made any indication that they
Speaker 2: were in debt. Now, out of the blue, he told
Speaker 2: her they were bankrupt. It didn't add up.
Speaker 1: I thought that can't be right. I mean, it just
Speaker 1: can't be right, because you have this company, You've purchased
Speaker 1: this beautiful home, We've lived this life. How would we
Speaker 1: be bankrupt. I couldn't make sense of it, and I
Speaker 1: didn't even get a good answer.
Speaker 2: When Ted tried to explain how it happened, it was
Speaker 2: just word salad about business deals gone bad. She needed space.
Speaker 1: I thought something's really wrong. We really should be separated.
Speaker 2: She told him to move out, and he did. Before
Speaker 2: he left, he set up a meeting with a bankruptcy attorney.
Speaker 1: And I'm listening, but I'm still like in shock because
Speaker 1: I couldn't make sense of it. I'm like, well, how
Speaker 1: are we bankrupt? Like, why are we bankrupt? Where is
Speaker 1: the money?
Speaker 2: He told Libby this meeting would give her answers, but
Speaker 2: it didn't. The next day he came to her with
Speaker 2: a new plan.
Speaker 1: He comes back and says, I think we could have
Speaker 1: just you file bankruptcy and not me. The house was
Speaker 1: solely in my name. I had no idea why he
Speaker 1: wanted to do that. I just knew that. I was like,
Speaker 1: you need to leave because I thought he wants to
Speaker 1: saddle me with all of that. And he comes out
Speaker 1: of that unscathed. It was enough for me to be like,
Speaker 1: I'm done.
Speaker 2: She couldn't stay in the marriage. She wanted a divorce.
Speaker 1: And it was like a race down to our attorneys.
Speaker 2: They had both arrived at their separate attorney's offices at
Speaker 2: the same time.
Speaker 1: I was at my attorneys, he was at his attorneys. Well.
Speaker 1: He wanted to make sure that he was the petitioner.
Speaker 1: That was so important. Attack he needed to feel like
Speaker 1: he's the one that was divorcing me.
Speaker 2: They started the process, but before any papers were signed,
Speaker 2: Ted tried to take back control.
Speaker 1: So as we're moving along in this divorce. I came
Speaker 1: home and he's standing in our kitchen saying, I've called
Speaker 1: the divorce off. That's exactly how he said it. I've
Speaker 1: called the divorce off. I'm like, okay, have you You've
Speaker 1: called it off? And he said, and I've written this
Speaker 1: letter and I want you to read it. And the
Speaker 1: letter stated all the things that he had done to
Speaker 1: me that were very unkind admitting everything. And then he says,
Speaker 1: I know you don't know anything about my business practices,
Speaker 1: but that will change, Like I'm going to let you
Speaker 1: in now on everything. But I still wasn't swayed by it,
Speaker 1: because I thought, well, why was he resistant in the
Speaker 1: first place.
Speaker 2: The letter didn't change her mind. One line stood out,
Speaker 2: though I know you don't know anything about my business practices,
Speaker 2: but that will change. It sounded like he was finally
Speaker 2: giving her what she wanted, transparency. The only problem he
Speaker 2: failed to mention the moment most important detail in.
Speaker 1: That letter I should point out he never says, by
Speaker 1: the way, I've been committing mortgage fraud in your life's
Speaker 1: about to implode.
Speaker 2: A few weeks after Libby and Ted began their divorce,
Speaker 2: Ted wanted to repair the relationship He wrote her a
Speaker 2: letter apologizing, promising to come clean about their finances, but
Speaker 2: Libby didn't trust it. She had a hunt that Ted
Speaker 2: was still hiding something, so she decided to turn to
Speaker 2: the Louisville rumor mill. Libby knew her town well. If
Speaker 2: Ted was up to something, someone had to know.
Speaker 1: I would find out by a friends has There was
Speaker 1: an attorney. He said that Ted was being investigated by
Speaker 1: the FBI. I was like what.
Speaker 2: Ted was being investigated for? A complex mortgage fraud scheme
Speaker 2: built on forged documents and phony buyers. Ted Khalid and
Speaker 2: his coworkers were all in on it.
Speaker 1: They found these straw buyers to buy these homes in
Speaker 1: a dilapidated area of Louisville.
Speaker 2: On paper, those buyers looked great. They had jobs, income,
Speaker 2: and enough credit to qualify, but none of it was real.
Speaker 1: They made up their employment so they didn't make the
Speaker 1: money that they said they did, so that would induce
Speaker 1: a lender to give them a loan when they shouldn't
Speaker 1: have had it in the first place.
Speaker 2: But in the moment, Libby didn't know any of these details.
Speaker 2: All she knew was that they were bankrupt and that
Speaker 2: her husband was being in investigated by the FBI. So
Speaker 2: the next time Ted came over to the house, Libby
Speaker 2: met him in the driveway to demand answers.
Speaker 1: And I remember this so clearly. I was in my
Speaker 1: powder blue pajamas and I came out and I said,
Speaker 1: what are you involved in? He knew at that point
Speaker 1: that I'm aware that something's wrong. And I said, are
Speaker 1: you being investigated by the FBI? And he looked at
Speaker 1: me so coldly, like he never knew me, and he said,
Speaker 1: if I go down, I'm taking you with me. I
Speaker 1: go You owe me more of an explanation, And he said, verbatim,
Speaker 1: I don't owe you anything, bitch. That's what he said
Speaker 1: to me. I don't owe you anything, bitch.
Speaker 2: The man she'd fallen in love with a decade ago
Speaker 2: was gone. Ted wasn't trying to protect her anymore. He
Speaker 2: was trying to pull her down right alongside him. But
Speaker 2: she wasn't about to let that happen. She made an
Speaker 2: appointment to speak with the authorities herself. A few days later,
Speaker 2: Libby found herself walking into a federal building, her heart pounding.
Speaker 1: And this is surreal to me. I mean, what minute,
Speaker 1: I'm married a stay at home mom and the next minute,
Speaker 1: I need to go and speak with the FBI. And
Speaker 1: so I get there and there were three agents and
Speaker 1: they're talking to me, asking me, you know, general questions.
Speaker 2: Libby sat there trying to recall every conversation, every detail,
Speaker 2: every red flag she ignored about her husband. She wanted
Speaker 2: to help their case and show them she was innocent.
Speaker 2: The agents left the room, Libby waited and waited.
Speaker 1: He comes back in and he said, the only thing
Speaker 1: you're guilty of is trusting your husband. That's all you're
Speaker 1: guilty of.
Speaker 2: While the FBI built their case, Libby still had to
Speaker 2: manage the divorce and bankruptcy filings. They short sold the
Speaker 2: house and nearly everything they owned.
Speaker 1: I think my first real taste of what I would
Speaker 1: have to endare it was going to the grocery store
Speaker 1: thinking that I had money, and I shopped you for
Speaker 1: an hour, went to buy the groceries and there was
Speaker 1: no money, you know, no funds, and they had to
Speaker 1: pull my cart aside. And that's embarrassing. And I could
Speaker 1: feel the sweat beating up and that was my first indication.
Speaker 1: I was like, this is bad. There's no money.
Speaker 2: In a matter of weeks, she went from never having
Speaker 2: to think about money, to not having enough for groceries
Speaker 2: to make matters worse, Ted became erratic. He knew the
Speaker 2: FEDS were closing in on him.
Speaker 1: Ted got really, really unruly. He would show up at
Speaker 1: my house, hide behind a tree. It'd be like late
Speaker 1: at night, and I would sit on the back of
Speaker 1: my steps and he would come and yell at me.
Speaker 1: He would say the oddest things to me. He would
Speaker 1: say things like, I will never be found guilty. I
Speaker 1: will be found innocent in a court of lot. And
Speaker 1: he named himself Teflne Ted because the charges don't stick.
Speaker 2: But Ted's nickname didn't hold up. He was indicted and
Speaker 2: the charges were serious mortgage fraud, bang fraud, wire fraud,
Speaker 2: totaling millions of dollars. Ted was one of four men
Speaker 2: named in the indictment, along with Khalid and two other
Speaker 2: men lived had never heard of. They'd been inflating the
Speaker 2: value of homes, flipping them to each other at ballooned prices,
Speaker 2: and pocketing the difference.
Speaker 1: The scheme worked for a while, but then they started
Speaker 1: to defall on these loans, and you know, someone's left
Speaker 1: holding the bag.
Speaker 2: The house of cards collapsed and Libby was the one
Speaker 2: left trying to make sense of the wreckage After the indictment,
Speaker 2: It was another four years of hearings and negotiations before
Speaker 2: Ted was sentenced to prison. Libby tried her best to
Speaker 2: co parent with him during this tense waiting period. He
Speaker 2: was ordered to pay one hundred and forty nine dollars
Speaker 2: a month in child support, practically nothing. As part of
Speaker 2: the divorce agreement, Libby and her daughter could stay in
Speaker 2: a condo owned by Ted's parents, but only for two years.
Speaker 2: After that she would be on her own.
Speaker 1: That's not a long time. When you don't have a job,
Speaker 1: you don't know if you have to go back to school,
Speaker 1: that goes by very quickly. My daughter was ten years old,
Speaker 1: and that scared me a great deal. And what scared
Speaker 1: me more is Ted defaulted on every single thing, so
Speaker 1: I had to go to court.
Speaker 2: Ted left behind a trail of defaulted debt, some of
Speaker 2: it in Libby's name through forged signatures, and I.
Speaker 1: Knew whose signature it was. It was my husband's. I
Speaker 1: recognized his paintwriting.
Speaker 2: She tried to call the debt collectors, but as soon
Speaker 2: as she said Ted was her ex husband, they're tone shifted.
Speaker 1: If you say it's somebody you don't know, then their alarm.
Speaker 1: You say it's your husband. Uh, like we're one person.
Speaker 1: It really was like I saw my identity over at
Speaker 1: the altar.
Speaker 2: Her credit was wrecked and her sense of safety was gone.
Speaker 2: After those two years were up, she had to find
Speaker 2: a new home. With nowhere to go, she and her
Speaker 2: daughter moved into a Rundown apartment.
Speaker 1: Pretty dilapidated place, roaches awful, but I needed a place
Speaker 1: to live.
Speaker 2: Because of her bankruptcy filing, she couldn't even get the
Speaker 2: lights turned on in her name.
Speaker 1: They wouldn't even let me get electric in money without
Speaker 1: a co center. And I'm like, well, am I just
Speaker 1: going to freeze to death.
Speaker 2: One of the last times she saw Ted, she asked
Speaker 2: him why he did.
Speaker 1: It it is answer was because I can't That's what
Speaker 1: he said to me after all those years. And I said,
Speaker 1: you bankrupted me. His answer was I bankrupted myself. It's
Speaker 1: almost like he didn't care how that affected me.
Speaker 2: One day, when Libby was at a particularly low point,
Speaker 2: she decided to reach out to Ted's mother.
Speaker 1: I asked his mom, I begged, and I said, we
Speaker 1: need money. I said, do you realize that Ted only
Speaker 1: Patty's one hundred and forty nine dollars a month, and
Speaker 1: her exact words were, that's what the courts say.
Speaker 2: This woman had welcomed her into their family and even
Speaker 2: given her that circle necklace to represent their bond. But
Speaker 2: Ted's parents wouldn't give her a cent, not even for
Speaker 2: their granddaughter's education.
Speaker 1: And I couldn't believe it because I adored them. I mean,
Speaker 1: they had so much. I couldn't understand why they wouldn't
Speaker 1: be generous. They never gave me a dollar more.
Speaker 2: It was heartbreaking because she respected them and she thought
Speaker 2: she was in their circle, but when she was drowning,
Speaker 2: they looked the other way. In the end, their loyalty
Speaker 2: was never to her, it was to Ted.
Speaker 1: I felt like his parents thought I'd betrayed him by
Speaker 1: not standing by my man. In quotes, if you will
Speaker 1: it is, that's sort of I think they wanted me
Speaker 1: to do. But their son betrayed me.
Speaker 2: Finally, Ted pled guilty. There was no trial, no courtroom showdown,
Speaker 2: no witness stand where Libby could testify to what she'd lost.
Speaker 2: In a way, Libby wanted to hear it all out
Speaker 2: in the open.
Speaker 1: If there's a trial you get to watch and you
Speaker 1: can see what happened to your life. I wanted to
Speaker 1: know what really happened.
Speaker 2: He was sentenced to eighteen months in federal prison and
Speaker 2: ordered to pay three million dollars in restitution. After the sentencing,
Speaker 2: Libby decided to go look for answers on her own.
Speaker 1: I decided I wanted to do an archaeological dig on myself.
Speaker 2: She called up an acquaintance who worked in the mortgage business.
Speaker 1: And I asked her, do you know what happened? Because
Speaker 1: I thought she did, And she said, you know, Libby,
Speaker 1: let me tell you something. You need to get on
Speaker 1: online deed records. She goes, you might find yourself there.
Speaker 1: I go, what do you mean, I've never been on
Speaker 1: that ever. She said, just take my advice and go look.
Speaker 2: So Lebby did and what she found made her stomach turn.
Speaker 1: Well, I go look at those deeds and there my
Speaker 1: name was. They had forged my name in that freud schime.
Speaker 1: When I found that out, I sent a text message
Speaker 1: to my ex husband that I knew what he had
Speaker 1: done to me. You used me in your floud ski.
Speaker 1: I mean, what happens if the FBI would have thought
Speaker 1: that I really was a part of that, and I
Speaker 1: was sitting in prison. He put my freedom in jeopardy
Speaker 1: and I never spoke a war to him again.
Speaker 2: Libby took the forged documents to the police station to
Speaker 2: try and press charges.
Speaker 1: This detective called me and goes, you know, I was
Speaker 1: interested in your case. Here's the thing. Your husband's already
Speaker 1: gone to prison. This case has been a unicated, so
Speaker 1: there's nothing that we can do for you. And I thought,
Speaker 1: why not? How come I can't do something for me?
Speaker 1: I mean, it looks like I help facilitate that fraud.
Speaker 1: But he said there was nothing that could be done.
Speaker 2: If she couldn't get justice, she at least wanted to
Speaker 2: set the record straight.
Speaker 1: I said, well, I want my name off those dats.
Speaker 1: I didn't care if they sat there for ten years.
Speaker 1: I did not want for generations it to look like
Speaker 1: I committed that fraud.
Speaker 2: After eight years of back and forth, she got the
Speaker 2: documents amended.
Speaker 1: It finally says on online deed records, my name was
Speaker 1: obtained forged ex husband or others. It officially says that
Speaker 1: now there's proof, and now I can set that rumor straight.
Speaker 1: But words rumors really truly can harm you forever.
Speaker 2: Even after she got the records fixed, she still hears
Speaker 2: whispers rumors about her being in on it.
Speaker 1: And people love it when people that they see as
Speaker 1: being affluent, living the life, belonging to country clubs fall
Speaker 1: I didn't grow up with all that. I appreciated it,
Speaker 1: but a lot of people just assume, Oh, they deserve it,
Speaker 1: they need I didn't know. I was financially illiterate, and
Speaker 1: that I tell people, do not be that. If your
Speaker 1: significant other is push them back, that's a red flag.
Speaker 2: It's a lesson. She learned the hardest way possible, but
Speaker 2: unlike the bankruptcy and the deeds, some consequences could never
Speaker 2: be expunged.
Speaker 1: It affected my relationship with my daughter. A young girl
Speaker 1: had this beautiful life and all of a sudden, it's
Speaker 1: food stamps. People at school aren't being nice to her
Speaker 1: because her dad's in prison. She was so upset in
Speaker 1: here her father's going to prison. She just wanted to
Speaker 1: see him, and he got mad at her and sent
Speaker 1: her an email from prison saying, don't be like your mother.
Speaker 1: You won't do well in life from prison, and I thought, Wow,
Speaker 1: what a statement to make. You're in a federal prison.
Speaker 1: Telling you know, your daughter not to be like her mother.
Speaker 2: Ted was released from prison in twenty ten. He never
Speaker 2: reached out to Libby.
Speaker 1: And then he got to transition right back into another
Speaker 1: home and a condo that his parents owned. Was never
Speaker 1: like that for me. I applied for affordable housing twice,
Speaker 1: never could get it.
Speaker 2: It's hard for Libby to stomach watching Ted end up
Speaker 2: with a soft landing. She's had to fight tooth and
Speaker 2: nail to reach build her life and regain financial stability.
Speaker 2: Plus there's still big unanswered questions. Did Khalid really threaten
Speaker 2: to kill her? What was really going on there to.
Speaker 1: This day, I don't really know if that's true or not.
Speaker 1: Maybe a fear tached I don't know. I don't know
Speaker 1: if Ted was lying to me. Only Ted would know that.
Speaker 2: She's had to come to terms with being in the
Speaker 2: dark and not knowing everything about the crimes that destroyed
Speaker 2: her life.
Speaker 1: I have to just live with never knowing, because maybe
Speaker 1: somebody will come out of the woodwork to talk to
Speaker 1: me and tell me they haven't yet. But you never know,
Speaker 1: You never know what could happen. You're supposed to forgive
Speaker 1: people for yourself. I have a really hard time with that,
Speaker 1: but I don't want to be bitter because that just
Speaker 1: eats you at.
Speaker 2: We end every episode with the same question, why did
Speaker 2: you want to tell your story?
Speaker 1: I always warn that I didn't get the life that
Speaker 1: I set out to have because I grew up with
Speaker 1: such dysfunction. My dream was to be married to someone
Speaker 1: who loved me. I know, it's silly with that house
Speaker 1: and white picket fence and a nice family because I
Speaker 1: didn't have it. In the end, it's also a cautionary tale.
Speaker 1: There's a lot in there that I would never do again.
Speaker 1: I had a bake of kille and he put many
Speaker 1: in it, and I was okay with that. He paid
Speaker 1: all the credit cards, he did all of it, and
Speaker 1: I was clueless. You know, don't do that. Don't let
Speaker 1: that happen to you. Some small things that I could
Speaker 1: have done could have changed the course of my life.
Speaker 1: And I mean literally, here I am today and while
Speaker 1: life imploded, and I'm like, why did that happen? Maybe
Speaker 1: to help other people, Maybe that's just as simple as that.
Speaker 2: Next week on Betrayal Weekly, She's doing so many lives,
Speaker 2: broken so many hearts.
Speaker 1: It's just left me wondering, did she.
Speaker 2: Ever have any love for any of us. If you
Speaker 2: would like to reach out to the Betrayal team or
Speaker 2: want to tell us your Betrayal story, email us at
Speaker 2: betrayalpod at gmail dot com. That's Betrayal pod at gmail
Speaker 2: dot com. We're grateful for your support. One way to
Speaker 2: show support is by subscribing to our show on Apple Podcasts,
Speaker 2: and don't forget to rate and Betrayal. Five star reviews
Speaker 2: go a long way. A big thank you to all
Speaker 2: of our listeners. Betrayal is a production of Glass Podcasts,
Speaker 2: a division of Glass Entertainment Group, in partnership with iHeart Podcasts.
Speaker 2: The show is executive produced by Nancy Glass and Jennifer Fason,
Speaker 2: hosted and produced by me Andrea Gunning, written and produced
Speaker 2: by Monique Leboard, also produced by Ben Fetterman. Associate producers
Speaker 2: are Kristin Mercury and Caitlin Golden. Our iHeart team is
Speaker 2: Ali Perry and Jessica Krincheck. Audio editing and mixing by
Speaker 2: Matt Delvecchio, additional editing support from Tanner Robbins. Betrayal's theme
Speaker 2: composed by Oliver Bains. Music library provided by my Music
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