Sramana Mitra: What happened next?
Ferren Rajput: This is late 90s. I started my first mortgage company in 1997. Money was starting to come in real good. I ended up getting married in 2001. My mortgage company really flourished.
As an entrepreneur, I was always pushing the envelope. I got into a position where I ended up with an IRS situation. It was about a million dollars’ worth of IRS debt from 2000 to 2002.
I ended up playing this game of borrowing the government’s money instead of paying them. I started to build a full million dollar custom home. I was in this silly boat of trying to impress my wife and got carried away. It was a $1.2 million debt. I started paying them and started working with a negotiation plan with them.
However, after having an attorney help me, IRS ended up turning us over from a civil to a criminal case. Before they did that, they rejected my payment plan even though I was voluntarily paying them. I had already paid down to $800,000. They were not willing to give me a payment plan.
The million dollars I had taken from them was put into a home that was non-refundable. You don’t get the escrows back in real estate. They pushed me to the limits to where my attorney ended up recognizing that this was a case of discrimination. This revenue officer just had it out for me.
We ended up suing the IRS in Federal court. Within less than a week of putting out a lawsuit with the civil division, the criminal division came out and opened an investigation case against me. It started in 2003. My first son was born in 2004. This case continued until 2006.
My wife was pregnant with my second son. I took this to some attorneys. They looked at the case. They wanted to take my case, but the chances of me losing were still there. The chance of me getting a prison sentence of five to six years was not something I was willing to do.
I ended up pleading with them for a one-year case instead of me fighting the case. I went to a prison camp for 10.5 months. I came back in the middle of 2008. That, to me, was my true turning point in life.
Not to say that I feel one way or another about my case, but it gave me the opportunity to think about where my life was heading and why I was involved with the financial world. I had already done my deed and understood how the financial world worked. It gave me a year’s worth of thinking while I was at the camp.
There was something that had been brewing within the private jet industry for many years. That was this thing called empty legs where a plane goes out with a client and it comes back home empty. Looking at all those numbers, almost 40% of flights were flying empty. The industry has always known it as a situation that can never be fixed.
I started putting plans together. I was stuck with anything I could do to put food on the table for my family. The plan was, I was going to launch a private jet company. In the middle of 2010, I had my plans put together and I ended up launching. The first flight was on December 14, 2010.