I Embezzled $7 Million: Gambling, Prison & Redemption | Recovery Vow Podcast

In this gripping episode of The Recovery Vow Podcast, Eric sits down with Jonathan, a former high-profile business manager who represented stars like Linkin Park, Halsey, and Matthew McConaughey. Jonathan opens up about the "pseudo self" he created to hide a dark secret: a severe gambling addiction that led him to embezzle $7 million from the very clients who trusted him as a friend.

Jonathan courageously details his six-year double life, the delusion of "borrowing" money he couldn't pay back, and the rock bottom moment where he used cocaine hoping to induce a heart attack to escape the shame. He shares his journey through federal prison, the humility of being fired from a fast-food job after managing millions, and how he found a new calling as a therapist helping others.

This conversation is a raw look at the destructive power of addiction, the weight of accountability, and the incredible truth that no matter how far you fall, you can rebuild a life of service and integrity.

On This Episode:
• Managing millions for celebrities while living a double life
• The psychology of the "Pseudo Self" and hiding trauma
• How a gambling addiction spiraled into $7 million in theft
• The rock bottom: Suicidal ideation and heart disease
• Life in federal prison and the difficulty of re-entering society
• Getting fired from Dunkin' Donuts: A lesson in humility
• Making amends when you can't speak to the victims
• Finding true purpose as a therapist and program director


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• Transcript

  Hey, thanks so much for joining me on the Recovery Valve podcast. Today we're doing a Riverside interview uh conversation with Jonathan Schwarz in Los Angeles. Now, Jonathan is an influential man uh with people like Alonas Morset and Beyonce, and all that is is awesome. You know, you hear these kind of names, but the name that he found was himself. And I think that it's important for us to just sit and listen to a story like his. He talks about his gambling addiction. He talks about his drug addiction, but he talks about his redemption. Um, and he talks about his time in jail. And I just want you to hear this. Uh, this is a type of process addiction. Um, and then this is also just good, clean recovery. And I hope that you enjoy this conversation that I have with John. Jonathan, thank you so much for being on the Recovery B podcast. If if you would just take us through your story. Now, I I see some big names here. You mentioned representing football players, but um the love of my life, Alana Smoreset. I saw that name on there. Saw Beyonce and all that's great. It shows that you are a very influential person. But what's on the other side of that influential person? What got you to where you are? Uh because I read about a maybe a gambling addiction and just different issues that Jonathan had, the real Jonathan. So take us through what life was like. So the real Jonathan is today. But that the period of my life I was living in my pseudo self. I wasn't um authentic, transparent. Um I was hiding dark secret of gambling and drugs for over a six-year period. Um, I was insecure, low self-esteem, but had to put up this facade to the outer world, particularly the entertainment space, my clients and the and others, professionals within the entertainment space, to my friends in the community, to to everyone. I just never dealt with my unresolved trauma, which was suppressed inside me for about 46 years. I'm 56 today. Um, not today literally, but I'm 56 as we're here today. Um, and so those suppressed emotions just made me feel like I needed to default to gambling and use of substances to escape reality, my reality. Um, I was immature. Uh, I should have asked for help. Uh, I didn't have the courage to ask for help. Um, today I believe courage is one of the biggest gifts we can give ourselves in recovery. But for me in that period there was uh I I was in my mind I was Superman and invincible and in denial. And so you know I knew every day for 6 years when I looked in a mirror that I was violating my fiduciary responsibility to the clients I represented in the capacity as their business manager. Um, I knew inevitably I was going to get caught, but you know, I thought that I could just take my I don't know why I start I started embezzling money from a handful of clients and I could have taken it from my own account, but I didn't want my wife or others to see that I was taking out money cuz then I it would have stopped my gambling. What a shocker. And so um I kept violating this responsibility that I had to them until the demise came when Atlantis in 2015 fourth quarter fired me. Um I had a foundation. So in February of every year I started a a foundation to help those with uh heart disease get a particular test called coronary CT scan angiogram. and Atlantis actually played at the first of five of my nonprofit events as other clients did as well for the other remaining ones. And what's sad is in so in February of of 2016, I text her like, "Hey, I haven't heard a reply from you." And um that's when I knew that uh she may have discovered um that I was embezzling from her. She was the largest victim of my crime. uh she didn't deserve it at all. She's an incredible woman. Nor did the other four or so clients deserve it either. And frankly, the clients that I didn't take money from didn't deserve the embarrassment that I caused within the uproar of the entertainment industry. So, my poor choices hurt a lot of people and um you know, I choose not to live in my past today, but I don't forget it. So, yeah, I appreciate you sharing that. Um, so I've got a couple questions that come up right away. Is Jonathan, how do you get in this field of work? And then, um, when you talk about a process addiction like gambling, was the gamble that you're talking about, the embezzlement, or was it horse track, casino, you know, where did it go? Where did it take you? So, does that make sense? Yeah. So, the gambling for me became a real problem in 2009 or 10. And uh I gambled every day for almost a six-year period on sports with a bookie. Um so the embezzlement money was rather, as I said earlier, taking the money from myself, which I had. Um I decided to have this horrific idea, let me just quote unquote borrow it in week one and I'll just pay it back the next week. Well, then week two came, week 12 came, 6 months came, years came, and I never paid it back. So now I'm chasing. I never actually really enjoyed gambling, but I'm chasing so that I don't get caught because, you know, if I chase and have this grandiosity, which is the mindset of a a gam compulsive gambler, you know, living in not reality, but a fantasy world, you know, I'll just win $7 million back one weekend and I'll pay all my clients off and no one will know. And $7 million? Yeah, I embezzled $7 million. Okay, I need to breathe for a second. I've never seen that kind of money. Yeah, the sad part is I had it and I should have paid it and uh from my own funds, but again, I I just made poor I continued to make poor choices. That was the pattern of me in my six-year addiction run, just constantly making poor choices. Um, you know, I don't know that person anymore. Um, but in in those times, I frankly didn't even know myself as well. But I don't use excuses. I don't use my trauma as an excuse that contributed to addiction. Even though there's clinical evidence that supports that, aces and trauma. And the truth is, I own it. I'm a very big advocate for personal accountability and taking full responsibility for poor choices. Uh I try to model that with the clients I I work with and see in uh in the treatment center that I work at. And um you know it it the thank god the clients got paid back in full because if they didn't I don't know that I' I'd be present or on this earth anymore cuz that would have really taken me over the edge. So not to minimize the impact that this had but it is I am grateful that they were all paid back in full. Oh absolutely. to get into this work you were doing. Is that something you wanted to do when you first started your career? Like I want to work with celebrities or were you already just in that that life? So that's a good question. So I I was not really a great academic student in high school or college, but accounting was something that I was very good at. And so I had seven CPAs in my family. One of them was within the uh pre, you know, he was pretty much a preeminent entertainment business manager in the in the music business and he was my mentor and I knew that I was destined to work for him at some point. So when I graduated college and I called him up and said, "Cuz as you know, I know you said I can come work for you. I'm ready." He said, "No, you're not. You're immature. You need to go hone your analytical skills and go work, you know, for a CPA firm." So, I worked for three and a half years in the financial district of San Francisco. Um, honed my skills and then one day I received a call from him and he said, "You're ready to come down." So, at that point in my life, I had one of my three beautiful sons and so my wife at the time and oldest son, we drove down to LA. We lived in a small apartment. Um, I didn't make a lot of money then. Um, but it was like going to grad school, learning from my cousin, and I didn't want the word nepatism associated with me. So, I was the first one in the office, the last one to leave. In 1999, his firm was acquired by Chase Manhattan Bank, now known as JP Morgan. And he asked me if I wanted to get into family uh wealth management, investment banking. I said, "Cuz I love you, but no thank you. I'm enjoying working, you know, in this space." and you know with your blessing I'd like to take a small book of business and join another firm. He gave me his blessing. I took a small book of business to the firm that ultimately I became a partner in called GSO Business Management. Great partners, great people. Uh they certainly didn't deserve what I did as well. Um it caused them a lot of emotional and financial stress. Um but I started my career there in February of of 2000. Um, it was a beautiful It was I was never enamored by the celebrities. That wasn't the attraction at all. Um, to me, they're just like you or I, you know, they put on their shoes the same way you and I put on our shoes. So, I think that helped me succeed and and being able to earn the trust from the clients and earn their respect in my pre-addictive years, of course. Um, and so that was how I got into this business. Um, it was a phony business. I never I didn't really sch smoo or socialize too much. Um, I just wanted to focus on my clients and my family. Um, I did attend obviously events, you know, when clients were at the events and invited us to come. But, you know, at the end of the day, clients really don't want a business manager hanging out with them. You know, we're their person that handles their finances. It's uh not not we don't ma manage their portfolios but all other finances we are responsible for whether it's paying bills, collecting the income, you know, reviewing, publishing, songwriting, royalties, helping them create budgets for their personal lives and professional lives, touring or other areas. And um that was fun. That part was fun. It would have been fun if it was people outside of the industry. just doing the analytics is what got me excited. You know, giving them, you know, quality documentation to support whatever it is they're we're talking about in a particular meeting. Um, until until I started gambling and then things changed a lot. But when we talk about your level of influence in that group of people, Hollywood music, give us um a snapshot of some of the folks you've worked with. so that people get an idea of when you say they're important, but I'm I don't have to be important to them. I want I want people to see that your past and who you were affiliated with, but it that affiliation didn't change who you were at the end. So, give us an idea who who's some of the people you work with. Yeah. And and just I just want your audience to realize I'm not name dropping, you know, there's no more ego in Jonathan, you know. Um, so to respond to your question, I represented an array of clients. So on the music it was, as you mentioned earlier, Lannis, Beyonce, Lincoln Park, um, Chance the Rapper and many other beautiful Holly, beautiful artist today. Um, I represented Gwenth Paltro, Matthew McConna, I represented many athletes, you know, David Justice, CJ Spiller, Brandon Jackson, Terrell Suggs, and so on. Um, it was great. You know, the sad part is I was friends with all of those clients. Many of those clients came to my house for barbecues. Many of them came to my children's bar mitzvah. Um, and those were all pre-addiction. And so, you know, when I said earlier that we as business managers, I want to elaborate, we're not in the entertainment space. We're just professionals that work with clients that are in the entertainment space. and my peers and and colleagues in the community often felt that they were in that space and I knew I wasn't and I learned how to set boundaries and I think that's important for business managers. I think it's important um for the clients, they want you to be conservative. They don't want you to be a hanger on person um just to take advantage of their ability to get to a restaurant. You know, just being a business manager, you have access to to places on your own. But I really didn't like to smoo with the clients because my responsibility was to handle their money and I stayed in my lane. Whenever you um talk about them being just real people, I mean, I get that. I've I've met celebrities before and you know they like you said they put their shoes on just like we do. But when you think about uh you now Jonathan, did you go back and clear the air or make amends with anybody? So that's a great question. So I was sentenced to federal prison for embezzling the money. I was sentenced to six years in federal prison on May 3rd, 2017. I surrendered to Sheridan, Oregon, a federal prison camp on July 11th, 2017. And uh once I was sentenced, I was prohibited from speaking to any of my former partners or employees or clients. It was part of the conditions of of my sentence. And so um I spent 34 months incarcerated, returned home during COVID in 2020 because of um I have heart disease and so I was immune compromised and so I was put on 16 months of home confinement with an ankle monitor and from there I had to complete 3 years of supervised probation. Um during that period I was also prohibited from reaching out to my former partners to make amends to my clients that I owe amends to. And again, the direct and indirect victims deserve an amends for me. But like once my probation was over, I spoke with my sponsor. I'll be 10 years sober on May 9th of 26. Um congratulations, man. Thank you. It's it's something I take great pride in. It's uh daily, as you know. It's a it's progress most days. It's one day at a time. But it's going back to the amends. Uh when I spoke to my sponsor, he said, you know, when you make amends, there are people you're not going to make amends to because it can cause that person harm. And in the case of Atlantis, to bring up all the trauma that she has as a result of my poor choices, it was decided that it wasn't wise to make an amends to her. Would I like to make amends to her? Yes. Would I like to make amends the other four or so clients? Yes. Would I like to make amends to my former partners? Yes. But right now I have some ongoing litigation with them and so I can't. Um so it's been tough for me not to make amends, but I know that my heart's in the right place that when I'm able to I will. Uh that's very important to me. uh you know when you make amends also you have no expectations about how the recipient's going to receive the amends and I'm okay with that because pre-active addiction I was a people pleaser where I stand today is um I I know how to set boundaries with people what I model for the clients I see in therapy sessions um I have a quality inner circle today I'm not trying to seek a lot of people in my life I call myself a nerd today I'm riskad adverse. Um, I try and do the next right action. Um, I'm not perfect, far from it, but I love the progress that I've made. I love who I've become. I often say that I'm uh, you know, I'm proud of who I am today and who I'm becoming. Well, that's what you got to be. You've got to be acceptant of who you are and and be proud of the things you've done. And I think it's important because in our addiction, we weren't that. You weren't proud of any of it. You're you're chasing that $7 million repair. You mentioned being in sobriety for 10 years. Is that from the gambling or there was a certain drug that mixed in there with it. So towards this end of like six seven months as my six-year run was was ending I had a lot of suicidal ideation and um if not for my kids I probably wouldn't be here today because I was just couldn't believe I didn't sleep for 6 years. I couldn't believe every night if I would hear a siren that I was had fear of getting caught or I couldn't believe that inevitably I was going to rupture my family's dynamics and my hurt my kids and hurt my wife and ultimately I unfortunately did. So I did start cocaine use every day now for 20 24/7. Um and with heart disease I would wake up with my heart pounding. I wasn't, you know, I was really harming myself and that was the method that ultimately I was going to use to off myself and um thankfully overdose on cocaine. I was Yeah, I was trying to do that. Yes, I was excessively using it. I would wake up sweating like most people do, sheets soaked, but with my heart disease, it wasn't very wise at all. And um I'm just grateful that I'm here today because I'm still trying to earn back trust with some of my loved ones. But that trust, as I tell clients and I model for them as well, is doesn't come out of the words from this mouth anymore because most people when they hear my, you know, from the old days, you know, they're going to still think I'm manipulative, I'm dishonest, I still have an ego. And so the way to earn it back is through my actions. If someone's willing to see my my behaviors today that are congruent with pro-reovery behavior, perhaps they'll let me back in their lives. And most importantly, my my kids and and my ex-wife and my mom and my stepfather, you know, those and my brother, those some of those people I'm still earning back trust from. Yeah. And it takes time. It takes time. It doesn't happen on our timeline either. That's right. And you you brought up family, so let's talk about family. Um we we talked about the addiction and some of the dark stuff. transition for us and tell us how important life is to you now. Um, what kind of relationship you have with your kids. Um, and because you had all of that success with the celebrities, I think people need to hear that that's just cool, but it's not real life. Real life is what you just talked about. Your children, your spouse, your parents. So, kind of elaborate on that. What what's some proud moments you got going on in the last 10 years? I think coming out of prison um entering society was a challenge. I took a job uh I came out with humility, but I needed more humility. I took a job at Dunkin Donuts, got fired after 2 months cuz I wasn't mopping the floors and cleaning the countertops well. I took another job. It didn't work out for me because I'm a felon and I accept that. Um, so my higher power gave me a message after that second job. Um, I couldn't work at anymore. And the message was, you know what, Jonathan, it's time for you to be of service to your brothers and sisters in the program. I want you to go to addiction study school, get your KAK. I want you to go to grad school and get your marriage and family therapist license. And I want you to specialize in addiction and trauma so people don't make the same mistakes that you make. That was that was the onset of the one of the proudest moments I've had in sobriety. You know, listening to the message from my higher power, following through with my commitment. And today I get great joy. I make very little money today. But back then in the entertainment space, money didn't buy me happiness then. Today happiness doesn't. My success isn't defined by my small bank account or even 15 20 years ago my big bank account. My success is defined as when I look in the mirror today, are my behaviors adhering to the principles of the program. Am I conducting myself in a way that is congruent with the program? And am I being of service to people? And am I also being compassionate to myself? And uh and am I taking accountability and responsibility for those choices and the ripple effect it had? My hope today, my biggest dream today is that all three of my beautiful sons will be with me one day to have a barbecue. And my mom's Why wouldn't they now? So, I have a really strong relationship with my youngest son. He's 22. We speak multiple times a day. He's in his last semester of college. My middle son has been traumatized by my behavior and he's not ready yet to have a relationship which I respect because I hurt him very I hurt all of them but I hurt specifically has been most affect impacted by my choices of the past and but he knows I love him. Um and my older son and I we do see each other about four times a year. We go grab a b um lunch or dinner. Um, we it used to be more superficial like very surface like conversations. He didn't call me dad, he called me Jonathan. Again, another consequence of of my past. But we just recently had an amazing lunch. Um, and I feel like that's the onset the onset, excuse me, of possibly, you know, having a stronger relationship with each other. But I accept that. And I also um I pray every day to my higher power that they'll come back in my life when they're ready. It's not on my timeline. And again, I accept I I live in a lot of acceptance. And this is another area where I choose to accept. They were my best friends. Um until they weren't. Um so that's difficult for me. Yeah. I'm I'm proud of you, Jonathan, for at least, you know, doing the work and and giving them the space to do it in their time. That's hard. Yes. It's really hard. You you did mention ex-wife. So, I have to ask um are you guys not together because of the issues that you went through? Yes, we we're not together. So, I did make amends to her when I came home. So, when you're on home confinement, you have to have like a landline. So, I first called her from my cell phone and she wouldn't take my call. So, I then waited a couple days, called her from the house line, apartment that I had. Um, and she stayed on the phone and allowed me the space to make amends. And since then, we have never talked. It's been it's been, you know, long time, over 10 years. She's now engaged. I wish her nothing but success. I was not a great husband. I committed infidelity and then all the other things that I did. She deserved better. You know, I didn't value the importance of being emotionally present. um in active addiction. I was physically present. I thought I was a good father. I thought I was a decent husband. But the reality was I was not emotionally present. I was too consumed all consumed with gambling and drugs. And you know that's again I keep saying the consequences of those choices that I I chose to make. And so she's a wonderful woman. I didn't recognize that in our marriage toward the tail end. We were married for 23 years. I was a terrible husband. Um, I I'll say I was still a good father, but I could have been a better father. Um, and you know, I wish her the best. Um, my mother is battling stage four lung cancer since I entered prison. She's my rock today along with my children. Even though I don't speak to them, they're always going to be my rock except my youngest son, uh, who is my rock. Um, and I get a great deal of joy calling her every day for 30 seconds and saying, "I love you." because tomorrow she may not be here. You mentioned the work that you went or that you're doing now. Tell me about how are you helping people. So I am a therapist and a program director at a six-baded luxury detox and residential in in Cino, California called Altus Rehab. I also do teleaotherapy with uh the Kabad treatment center which is a nonprofit uh medical facility in LA. And so the greatest joy of my day is when I walk in here early in the morning um and I get to see the clients and ask them how they're doing. Did they sleep well? How can I support you today? Looking forward to facilitating some of the groups today on the calendar. Uh hey, we have a we have a therapy appointment at 1:00 today. I can't wait to see you. And just being there and just being of service is like the most meaningful and powerful and rewarding action I take on a daily basis. And again, I'm a human being. When I say on a daily basis, it's not every day. Um, and I'm not helping everybody every day. I'm human. You know, I have bad days, I have good days, but my bad days today are like very minimal because I know how to I've rewired my subconscious mind. Uh, which is what I help clients do. Like, you know, as you probably know, from birth to 7 years old, our subconscious mind is formed. Many of us go into fight, flight, survival mode during our addiction years and catastrophize negative thing future trip. And for me, it's letting it's helping them rewire that um you know that subconscious mind and change the catastrophizing and negative thinking to positive reality based self-t talk and so many other great interventions I won't bore your audience with that we work very hard with the clients and um that this is I live for this. I live for coming in here. This is what keeps me motivated. Being on podcast keeps me motivated to spread my message. Ultimately, you know, I want to tour the world and be the male version of Bnee Brown and help men become vulnerable and have the courage to open up and be honest and take responsibility for your poor choices. Own them, stop judging people. Who are who am I to judge anybody? The answer is I'm nobody to do that. And um to seek knowledge and to better themselves, to do a lot of reflection. Prison actually really helped me. It gave me an opportunity to do something I never did in my life, which is like a step 10. I just reflected on all of my past. And that reflection really helped me connect with emotions. And those emotions are something I never felt, good, bad, and indifferent. I love to cry today. I think crying is incredibly cathartic. And I hope men can start to accept that and just be, you know, and and today I can ask for help. Today I have the courage to ask for help. I mean, even though I'm very strong in the Los Angeles inner group, Gamblers Anonymous, and I go to my meeting and I'm secretaries and this or that, and I take commitments, I have a sponsor as well. You know, I I need people to talk to, you know, I have a quality inner circle today, not quantity. I have very few people in there by choice. and I enjoy being alone. I have a beautiful girlfriend today. She's got a beautiful heart, a beautiful soul. We communicate well. Um, not totally available. Um, because I work long hours and I enjoy going home and reading a book. I I'm comfortable being by myself today. And that's what recovery has given me. There was no way in pre-addiction that I would sit at a Starbucks by myself because I would feel that everyone's judging me, thinking I'm a loser. Today, I love being by myself and I don't care if I go to a movie by myself or sit at Starbucks by myself. And frankly, I really don't care what people think about me today. I'm not seeking external validation. I love that you said that. I thought it was just age for me, like I'm getting mid-40s, like I don't care what you do or what you're thinking of me, but it's a part of the recovery process, too. One thing that you said that um really stuck out was that you're you're serving people in this this work that you're doing. I have a connection to a group in Orange County called Laguna Shores and I would love to continue this conversation with you after the podcast and see how we can be of service to each other. Recovery Bow is a nonprofit and so I've got, you know, the book and these different resources that I would love to just tell you about. Thank you. I would love to hear and I'd love to hear what you're doing and how we can be of service. Thank you. Absolutely. I'd love to share. Is there anything that I missed that you would want the listeners of this podcast to hear? No, I think we said a lot of the nuggets, right? Like, please ask for help if you're struggling. You know, you could DM me on my Instagram, any one of your listeners, and I will try my best to help them if they need the help and they ask for the help. um trying, you know, don't you don't have to pretend you're someone you're not like I did. Be your authentic self, you know, be kind to your spouse. Be kind to your friends. Find forgiveness in yourself. Don't carry resentments. Like, you know, just just be who you really are. You don't have to be anybody else. Well, if you want to send me Alanis's cell phone number, I'll send her this and help you start the amends process. If you want to send me Beyonce's number, I'll do the same. Um, just wherever you feel led for me to serve. Of course. Of course. You got it. But I do want to say that I am very very proud of you. you know, we we have people that come on this and and they share all kinds of uh addictions, but for you to talk about, you know, something as heavy as embezzlement and and gambling addiction that led to jail and trying to overdose on cocaine. Um, I mean, that's heavy. So, thank you for so so just being transparent this morning. Yes. Thank you. Thank you for allowing me to be transparent. And um I'd love to have you back on the p on the pod the podcast not podcast um if you'd be willing to do that. Absolutely. I enjoy this very much. I really do. Anytime I'll come back. Thank you for asking.