Sentenced to 120 months in federal prison for wire fraud and defrauding investors of more than $19 million in a textbook Ponzi scheme, Ty Herman, a Mankato native and MSU alum, can attest it is never too late to turn your life around.
Herman, 64, shared his story with Integrated Business Experience students Thursday, and cautioned them to avoid prison and take on the business world.
“I learned more about criminal activity inside of prison than outside of it,” Herman said. “But I never accepted prison. I wanted to get out of there as fast I could and I detested every second of it.”
Living a comfortable life for decades while working with bigname companies after his minor league baseball career with the Boston Red Sox, Herman had good relations with many named brands such as Conair, Mr. Coffee and Black+Decker.
It wasn’t enough. After his children went on to college, Herman decided to get involved in excess inventory management, buying products for pennies on the dollar and selling them for nickels on the dollar to make some extra income.
Upping his production to the point where he needed investors, it all started going south when he tried to make his first seven-figure deal that ended up being a scam.
“Instead of telling my investors I screwed up and lost the money, I went to them and said, ‘All good,’ in fact, it’s so good, that I’m gonna take the money that I just got, and I’m gonna reinvest it,” Herman said. “That is the first rule that I will give you, don’t tell your first lie because from that point it’s constant catch-up.”
Herman said he went through a classic midlife crisis,buying fancy cars, dating younger women and gambling in Las Vegas. However, the constant paranoia of getting caught ate at him to the point where it was unlivable.
“I was living in Hell. I knew that the reckoning was coming and there was no way I would retrieve all that money,” Herman said. “It became such a nightmare I couldn’t sleep and my family was in my rearview mirror.”
On Nov. 19, 2013, Herman received a knock at the door of his condo. With the peephole blocked, his visitors let themselves in. It was over.
“I was relieved it was over. And I knew it was recovery time,” Herman said.
When the reconciliation began, Herman felt lucky his family and some friends had forgiven him.
“I was fortunate for people like (MSU Baseball) Coach Bowyer who had visited me in my green uniform. It felt great, but so humbling,” Herman said. “The shame that is attached to that is lifelong.”
Herman said as you get into the business you will have many temptations. His advice was: Don’t make the same mistakes as he did.
“Don’t ever tell your first lie, you cannot get out. Go to someone you trust and talk to them. I am living proof that it is not worth it,” Herman said.
Finishing his probation in January, he now lives a quiet life with just the bare necessities.
“Rebuilding a life at 64 is not easy,” Herman said. “But I have the love of my grandkids, my children and ultimately I’ve got God’s love and forgiveness and grace.”
In contact with his old baseball coach all these years later, Herman still makes light of his situation.
“I do have the honor of maybe being coach Bowyer’s first felon,” Herman said.
Herman told the IBE students how greed can get the best of anyone.
“Everyone in business is going to be faced with challenges, it is not just financial ones,” Herman said. “Their actions will always have consequences, and they have to be aware of those pitfalls and avoid them.”
What got him in that position was, ultimately, greed.
“We are becoming beholden to our income. Financial pressure can make you do things you wouldn’t normally do,” Herman said. “It’s only going to get worse. While the temptation is there and need to always have something greater, we will always be challenged.”
Header photo: Ty Herman speaks to this semester’s Integrated Business Experience program students. (Julia Lin/The Reporter)
Write to Julia Lin at firstname.lastname@example.org