Jamie Smith's new book, indefinitely waiting for release, makes claims that old friends and foes say are exaggerated at best.
Jamie Smith's new book, indefinitely waiting for release, makes claims that old friends and foes say are exaggerated at best.
Jamie Smith's new book, indefinitely waiting for release, makes claims that old friends and foes say are exaggerated at best. (Outside Magazine)

The Spy Who Scammed Us?

Jamie Smith says he was recruited into the CIA as an undergraduate at Ole Miss, cofounded Blackwater, and has done clandestine intelligence work all over the world, operating out of a counterterrorism boot camp in the woods of north Mississippi. Plenty of people believed him, including the Air Force (which paid him $7 million to train personnel) and William Morrow, which signed him up to write his memoir. There's just one little question: How much of it is true?

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Some called it G.I. Joe Fantasy Camp, and for good reason. In the piney woods of north Mississippi, professionals and wannabes alike would come to the 60-acre compound of an outfit called SCG International to play war games, fire live weapons, conduct mock interrogations, and run around like kids, zinging paintball rounds across creeks and seeking cover in open fields.

But this was serious business, too. During SCG’s heyday, between 2008 and 2012, the U.S. government and local law-enforcement agencies paid a lot of money to get people trained so they could function capably in war zones, shoot-outs, and other dicey situations.

It was an exciting place to be, even for amateurs. If you displayed some talent, you might get a nod from one of SCG’s professional tough guys—lawmen and military veterans who could, if they wanted, find you a job with the company someday. If that happened, you were told, exciting work would follow: protecting a cargo shipment in the Middle East, say, or running special missions deep inside a war-torn African nation. The money was said to be very good.

The SCG compound was the hub for a major international operation that touted offices in London, Dubai, Islamabad, Buenos Aires, and Kabul. SCG’s creator and boss, Jamie Smith, was the main draw for most students who came: ex-CIA, Harvard educated, a cofounder of Blackwater, and an all-around world traveler and hired gun. Smith lectured at the camp wearing cool, snug-fit Crye combat gear and Wiley X shooter glasses. He was clean-cut, with perfect hair. He also talked a lot about his love for Jesus. His lessons on weaponry and interrogation were sprinkled with Bible verses.

If you were lucky, Smith might tell you about the time he was shot in Pakistan or how he became a decorated CIA officer during the Gulf War. Some of the men who came to train had seen him on CNN, Fox, or MSNBC, appearing as an expert on security and counterterrorism. If you paid the $1,200 to go through a one-week SCG course, you knew you were heading into an experience that would be authentic.

Many things about Smith—including his CIA past and his military background—appear to be elaborate fabrications.

Smith promised “real-world scenarios for real-world warriors.” Holly Springs, Mississippi, where SCG’s administrative offices were located, was the setting for the Democratic Republic of Krasnovikstan, a.k.a. the DROK, a make-believe Islamic country filled with terrorists, double agents, and an insane vigilante police force. While you pretended during exercises that the DROK’s dangers were real, you had to ignore the fact that Holly Springs was actually a quaint little town known for soul food, a 24/7 Elvis shrine called Graceland Too, and antebellum homes that survived Civil War occupation by Union troops. Smith owned one of them, a sprawling mansion called Crump Place.

The period between 2008 and 2010 were high times at SCG, when the company was awarded contracts from the Air Force that totaled $7.3 million. Working in conjunction with the military at Fort Dix, New Jersey, SCG experts trained personnel headed for Iraq and Afghanistan in combat and cultural skills.

During the training sessions down south, Smith often talked about SCG’s driving philosophy, lecturing students inside an old house trailer that had been turned into a classroom. He was cocky and sure-footed, citing the Moscow Rules, a vintage collection of Cold War maxims for doing battle with the KGB. One favorite: Use misdirection, illusion, and deception. Another: Never give up your cover story. Even when the bastards are onto you, stick with it.

As it turned out, these sayings were an apt description of how Smith often did business, because many things about him—including his CIA past, his military background, and parts of his education résumé—appear to be elaborate fabrications. In the wartime years after 9/11, Smith used these stories to build a small empire that he lost just as quickly when people, including his own staff, began to realize that he’d made much of it up, and that neither he nor anybody at SCG was doing much harrowing work overseas.

Smith’s staff and clients believed he was a decorated spook and battle-tested warrior. Based on this perception, Smith pulled down some $20 million, including $12.5 million that he took from a trusting couple in Pennsylvania, Craig and Mary Jo Sanford, who thought his international contacts qualified him to safeguard their money in an investment account. Getting his hands on that cash was crucial: without it, Smith never could have grown SCG, which he had founded in 2002 but had been unable to take to the level he dreamed of.

In 2010, Smith’s Pennsylvania victims sued to get their money back. They won, but they haven’t succeeded in getting him to pay up, partly because he left the country for much of the past two years and has been very hard to find. In 2011, after a Virginia civil-court jury said Smith defrauded the Sanfords, the Air Force banned SCG from obtaining contracts for three years. In addition, Smith was hired in 2009 to help in the effort to rescue Robert Levinson, a retired FBI agent who is believed to be a hostage in Iran. As we’ll see, that arrangement also led to nothing but frustration for Smith’s clients.

This fall was supposed to mark Smith’s return to glory. His memoir, Gray Work: Confessions of an American Paramilitary Spy, promised to tell the inside story of Smith’s amazing exploits—from the CIA to the dangerous front lines of military contracting. There would be a national book tour and maybe some high-profile media attention. But in August, a month before the scheduled September 9 release date, a promotional page for the book on publisher William Morrow’s website disappeared without explanation. “Sorry, this book is unavailable” is all it said.

It’s not clear when—or even if—Gray Work will be released, and this is the second delay since we started asking questions about Smith. It was originally slated for publication in May 2014 but was held up for what Morrow described to us as legal vetting. Smith says the CIA has been reviewing it, too, and that the process has taken months. This time, Morrow, an imprint of publishing giant HarperCollins, isn’t saying anything. We tried to contact them several times about future plans for the book, with no response.

Smith, who is now 44, grew up in a north Mississippi town called Batesville, a working-class community of 7,400 people, 63 miles south of Memphis, Tennessee, on I-55. Batesville has a Cracker Barrel, a Super Walmart, a coffin factory, and a hell of a good football team. The South Panola Tigers have the fifth-longest winning streak in high school history. Eighty-nine games.

Many people there remember Jamie: his dad ran Batesville’s biggest dry cleaners for years, and the family was active in the First Baptist Church. He was pretty popular, standing out for his obsession with martial arts. He also liked to pretend he was a cop. High school classmates recall that Jamie and his younger brother, Todd, bought a flashing blue light that they sometimes attached to the top of their car. Then they would roam the highways, pulling motorists over as a prank.

Such stunts were “the stuff you do in ninth and tenth grade that most people grow out of,” says Andy Yelton, who went to high school and college with Smith. “He wanted to be a ninja. But nobody wants to be a ninja as an adult. I guess Jamie just never stopped.”

After Smith graduated from high school in 1988, he enrolled at the University of Mississippi, in Oxford, along with his hometown friend Clay Fisher. Fisher has known Smith since kindergarten, and at Ole Miss they were roommates and, briefly, fraternity brothers. Fisher says his friend has told tall tales since childhood. “Jamie’s always lived his life in a comic book,” he says.

The CIA doesn’t usually tap untrained, 20-year-old undergrads to become agents. And during the time in the early 1990s when Smith says he was working as a CIA intelligence officer—and was decorated for service in the first Gulf War—Fisher says he and Smith were hanging out in an Ole Miss dorm room.

“If he was in the war, I guess I was, too,” Fisher says. “We were cutting up, eating Domino’s pizza, watching the coverage. His whole room looked like a war room. He was fascinated by war tactics.”

Smith’s claim that he was a CIA officer overseas is important, because it’s a major basis for his entire career. Though this claim likely isn’t true, he sticks to the Moscow Rules and stands by the story when pressed on it.

“I would put my hand on a stack of Bibles and say, ‘Absolutely, I was an officer at the Central Intelligence Agency at age 21,’ ” Smith told us during an interview in April. “I had a cover at the State Department’s Near East and Asia desk.”

The CIA declined to discuss Smith—officials there don’t usually talk about who has and hasn’t worked for the agency—so we asked an independent expert if his story sounded feasible.

“Horseshit,” says Larry Johnson, a former CIA officer and a State Department deputy director in the office on counterterrorism from 1989 to 1993. Johnson says there’s no way the CIA would have plucked a kid from Ole Miss and given him serious duties.

Smith also says he served in the National Guard during his youth, which is true: the Guard verifies it. But he exaggerates the experience, saying that he served for seven years starting in college, learning much of what he would later incorporate into the lesson plans of SCG.

In fact, Smith simultaneously enrolled in an Ole Miss ROTC program and the National Guard in the fall of 1992—meaning he joined up after the time he says he was a spook—but he dropped out in 1993, at which point the Guard discharged him. Letters between the Mississippi National Guard and his military-science professor at Ole Miss say that Smith “would not cooperate” and “had his own priorities.” He was cited with voluntary breach of contract because of a “willful evasion of training.”

When we asked a spokesman for the Guard why Smith wasn’t forced to honor his legal commitment, he said, “Looks like we didn’t want a problem child.”

A few years after Smith’s 1993 graduation from Ole Miss, he entered law school at Regent University in Virginia Beach, an institution created by televangelist Pat Robertson. He got his diploma from Regent in 2000 and then went to Boston University to pursue a graduate degree in tax law. Smith often claims he earned an LLM in taxation, even listing the degrees “BPA, JD, LLM” under his byline in old SCG newsletters, but in court Smith admitted that he never finished. Smith told us he completed the coursework but didn’t receive a degree because he didn’t attend graduation. At first, Smith agreed to grant us access to his BU records but later changed his mind. We were supposed to take him at his word.

So were his old friends back at South Panola. In 1998, unable to attend his class’s ten-year reunion, Smith sent a summary of his career to the reunion committee, and it was filled with dubious claims.

“Upon graduation, I enrolled at Ole Miss and involved myself with Republican politics,” he wrote. “I received the Gold Congressional Award from Senator Bob Dole and began working for the CIA. I served as an Intelligence Officer in the Counter Terrorism Division. During the Persian Gulf War, I received three awards—Distinguished Service, Outstanding Performance and Valor.”

He went on from there, saying he’d worked as a CIA instructor, assigned to teach “sniping and surveillance” to federal, state, and local law-enforcement agencies and for the State Department in the Middle East. None of this could be verified. We know for sure only that he worked as a Christian karate instructor while at Regent.

After his legal training ended, Smith took a job with a law firm in Jackson, Mississippi. He was hired as a tax specialist but left after a few months. He ended up working as a firearms instructor, post-9/11, at the controversial North Carolina–based paramilitary firm Blackwater. Much of Smith’s story centers on his role at Blackwater, which sent private soldiers to both Iraq and Afghanistan during the American occupations there. In 2002, as a Blackwater employee, Smith was part of a team completing a security contract for the CIA in Shkin, located near the Pakistani border, and Kabul. Sources at Blackwater say this was a 30-day posting, though Smith has said he was in the country for eight months.

“If he holds up ten fingers, I know there's really only two,” travel writer Robert Young Pelton once said of Smith. “He's just one of those guys that can't not embellish a story.”

The publisher’s description for Gray Work calls him a “cofounder” of the company. When pressed now, Smith says he was the founder of a “division” of it. One of his former bosses at the firm, Gary Jackson, describes Smith as a low-level administrator in the months following 9/11. Erik Prince, one of Blackwater’s founders and its CEO, wasn’t as kind.

“Gentlemen, any work by Jamie Smith can only be classified as pure fiction,” Prince said in an e-mail. “He was fired from BW for nonperformance, and most of all, habitual and constant lying. He has a history of fantasy and not paying his employees. If you’d like a list of aggrieved to interview it will take a while to get through them all. Do you get the idea?”

When we asked Smith about this, he said Prince was still angry because Prince’s former assistant had hit on him.

From the beginning, Smith wanted SCG International to be as successful as Blackwater. The trouble was that Smith needed money to raise the company’s profile. A lot of federal contracts were on the table in the mid-2000s, as the U.S. government carried out wars and security operations in Iraq and Afghanistan. A new paramilitary company like SCG, if established, could make a killing.

SCG had secured three small Navy contracts in 2005, but a seat at the big boys’ table required the kind of seed money necessary to hire serious people and build new facilities. Smith needed to find millions of dollars in working capital.

He started small, advertising personal-protection services for wealthy international travelers. It’s unknown how many people actually signed up. But by 2003, Smith had befriended Robert Young Pelton, the gonzo travel writer and host of The World’s Most Dangerous Places on the Travel Channel. Smith loved telling friends and potential clients the story of a mission he ran, which supposedly involved rescuing Pelton from a right-wing paramilitary group in Colombia.

jamie smith gray work robert young pelton bogota colombia
Smith on the go. The exact nature of many of his foreign escapades remains mysterious. (Robert Young Pelton)

Pelton, who seems to like Smith and says his claims usually contain a grain of truth, nonetheless describes some of his stories as “borderline delusional” and has characterized Smith’s account of the Colombia episode as patently false. For starters, Pelton had already been released, escorted away from his kidnappers by a Catholic priest. Smith didn’t arrive until the danger was over.

“I was having my first rest in a very nice Bogotá hotel and the phone rang and there was a Mr. Smith to see me,” Pelton later said in an interview with the Virginian Pilot. “He was in the lobby the next morning with another fellow, who I learned later was either his brother or his cousin or something, and he was there to rescue me. And I’m like, well, that’s nice, but I’m in a luxury hotel. So we walked around Bogotá, did some shopping, and we flew home.”

The newspaper asked Pelton how much of what Smith said could be believed. “If he holds up ten fingers, I know there’s really only two,” Pelton said. “He’s just one of those guys that can’t not embellish a story.”

Smith found the seed money he needed for SCG on a chilly morning in November 2007, when he rolled into Falls Township, in Bucks County, Pennsylvania, at the behest of a friend who introduced him to Craig Sanford. Craig was on hand to take part in a police dog-training exhibition being held behind the main office of a profitable business he ran with his wife, Mary Jo. Together they’d made millions through a medical-waste-disposal operation they’d created and grown.

Craig was at the exhibition with his prized Belgian Malinois, Pike, working with a K-9 instructor named Rocky Boudreau. Sanford knew and respected Boudreau, and he listened when Boudreau told him that someone special would be stopping by.

That morning, according to court documents, Smith drove up in a white Suburban loaded with suitcases, his wife, Allison, and three kids, two girls and a boy. He said they were en route to New York City, where there was an American Girl megastore that his daughters wanted to see. But he was happy to stop in and say hello to his old friend Boudreau and perhaps talk to local police about their training.

It’s not entirely clear what Boudreau’s role in all this was, and we were unable to reach him for comment. We know that he knew Smith from dog-training circles, received tens of thousands from Smith after he’d secured the Sanfords’ money, and later left the U.S. to live in Costa Rica, a country he’d done business in for years. During and after that first encounter in Pennsylvania, he assured the Sanfords that Smith was the real deal—a former CIA field man, Harvard educated, who had started his career as a Navy Seal.

Sanford was impressed. “He looked like a government guy,” he recalls, talking in a straight-ahead Philly accent. “He had a calm demeanor, like he knew things.”

To Sanford, Smith casually mentioned all the work he’d done in foreign countries, saying that he’d had experience carrying diplomatic pouches and working with foreign banks. At one point, Smith’s cell phone rang. Sanford recalled him turning away, saying, “Oh, I got to take this. It’s the number two guy for the FBI. I got a special case I’m working for them.”

“It was seamless,” Sanford says. “That was, you know, very convincing.”

Craig and Mary Jo had recently sold their company, netting $12.5 million after taxes from an operation that had been built on a lifetime of hard work. Mary Jo used to collect boxes loaded with needles, blood, and human tissue, while Craig would repair the collection trucks. When it came time for a buyout, the couple were ready for retirement.

“It was the so-called American dream,” Craig says. “There was no magic in what we built. We were here for 20-hour days.”

The Sanfords enjoyed their lives in Bucks County, but they had a couple of daunting problems. They had recently lost a judgment in a $3 million property dispute, and though their lawyer’s insurance company told the Sanfords they would be covered for the loss, it wouldn’t happen right away. Ultimately, the Sanfords didn’t have to pay anything, but in November 2007, they were worried that all their hard work, their retirement fund, and the money for their children could be ransacked by their opponents in the case. Their attorney suggested looking for a safe place to park it overseas.

Another issue was Craig’s health. Doctors had found malignant tumors on his aorta and thought he might not live another year.

At this point, in rode Jamie Smith with his government credentials. Sanford says he already seemed to be aware of their financial situation, and though Smith said he usually didn’t deal with such small amounts, he agreed to help. Sanford admits he wasn’t thinking clearly in those days, but it was a strange time, and everything happened fast.

After their initial meeting, Boudreau sent the Sanfords an e-mail endorsing Smith. “Jamie is a wizard,” he wrote. “So no worries there. He graduated Harvard with the highest honors. I trust him with my life … with my kids’ life.”

“So I figured this guy is real,” Sanford says. “This is the real thing. And he does this and he’s a CIA and all this. I had a lot of respect for the government and the system, and I figured, you know, this is it. We can trust this.”

A few days later, the Sanfords wrote two checks made out to SCG International, both for $6.25 million. Smith handed over a promissory note that said the money would be returned in 18 months, with interest.

It was all done so easily and with no risk. What could possibly go wrong?

The Sanfords never saw their money again.

There are a number of things Smith might have done with the Sanfords’ funds. He could have invested them—in some kind of overseas or domestic account—and taken a healthy fee before returning the money with interest, which is how the deal was supposed to work. He could have used the cash to build SCG into a sustainable business that earned consistent profits.

What he did instead was spend it on a combination of bad investments, personal luxuries, and the land, gear, and employees required to make SCG become big-time. To some extent, SCG became just that—it did business with clients and bagged major contracts—but the money SCG earned wasn’t enough to match Smith’s burn rate.

Smith’s initial move was to deposit both checks at Batesville’s First Security Bank. Before the Sanfords came along, he had only around $9,000 in his personal checking 
account. Now he was able to put $2.5 million in an SCG account and $10 million in a long-term investment fund. Later, the $10 million was transferred to an account that allowed Smith to invest it in new assets, including land and other necessities for SCG.

Smith next paid off tens of thousands of dollars in credit card debt. Then he asked for a $250,000 credit line and two new credit cards, one for him and one for Allison. After that he started buying things, paying $41,200 in cash for a Mercedes, $4,475 to upgrade Allison’s wedding ring, and $350 for tanning. (In testimony during the Sanfords’ civil suit against him, Smith told a judge that he needed to “darken up a little bit” when traveling in the Middle East.) There were pricey dinners, child-support payments for his brother, Todd (who later became SCG’s vice president), school tuition for Smith’s kids, and gun purchases. Smith bought a pile of expensive weapons, including several 
AR-15’s, a camo-colored .308 sniper rifle, Uzis, MAC-10’s, Glocks, and a stainless-steel assault rifle.

At least some of the money was invested, records show—sometimes wisely, sometimes not. Smith gave $200,000 to a low-budget film company called Southern Belle Productions, owned by a Los Angeles actress and director named Tammi Sutton, who was lauded in a fan magazine as “one of the B-movie industry’s bustiest ladies.” This was seed money for a World War II epic that never got made.

Smith also put money into real estate. To go along with the 4,385-square-foot house he bought for his family in 2006, in the posh Pungo section of Virginia Beach, he put down half a million on an oceanside place in Hawaii that he called his “vacation home.” In early 2008, he started building the SCG headquarters in Holly Springs, on a logged-out piece of red-clay land. In less than a year, $2.5 million had dwindled to $200,000.

The big new SCG compound was situated near the crossroads of Mississippi Highway 7 and U.S. Highway 78. It featured a shoot house built for teaching forced-entry tactics and “room clearing.” Smith had the land graded for a gun range and talked about bigger plans: kennels for Boudreau’s guard dogs, a helipad for quick travel to and fro, a gun shop for tactical weapons and gear, and even a replica Middle Eastern village for training.

SCG International 2-8-13-09
At the SCG compound in Holly Springs, Smith promised "real-world scenarios for real-world warriors." (David Crane)

During this period of expansion, Smith never contacted the Sanfords. And there is no evidence, according to former SCG employees, that the company did much beyond running its training camps and angling for more government contracts, which SCG had been competing for since 2005.

In a move that may have increased his chances of getting government business, Smith was falsely describing SCG as a “disabled veteran owned” company. According to Mike Rush, SCG’s former president and a onetime Navy SEAL, the company also hired a couple of impressive specialists—a logistics director and another former Navy Seal—who helped them beat out the competition in nailing down business.

Smith’s résumé and his claims were never part of the pitch for government contracts, Rush says. And from his perspective that was good, because it didn’t take him long to decide that a lot of what Smith said didn’t add up. “His tales of heroism and stuff like that were slightly embellished,” Rush says.


“Yeah, that’s an understatement.”

In the summer of 2009, Rush says, Smith came clean to him during a car ride from the compound to Holly Springs. He was never a covert agent, he admitted, but he insisted he’d worked for the CIA in some unspecified capacity. Robert Young Pelton thinks that, at best, Smith was an intern.

In an e-mail sent in February 2009, Smith demonstrates his tendency to take a kernel of truth and blow it up into something more. An accountant friend from Virginia, who knew he would be a fish out of water among all the tough guys at SCG, wanted to come to Holly Springs for training, and Jamie coached him on how to fit in.

“If anyone asks you what you do/where you’re from, just tell them you’re from up near Williamsburg (which is true) and you deal with a federal agency (which is true—the IRS),” he wrote. “This will cause people to wonder if you’re with the agency—never admit it or deny it when you’re there and deflect any questions as casually as you can. It’ll be fun.”

Mike Rush ended up having an ugly break with Smith, but in Smith’s defense he argues that the Air Force got its money’s worth, because SCG had hired legitimate people to do most of the instruction. Smith, Rush says, was “a real-life Walter Mitty” and was off doing other things most of the time. But for all his faults, Rush believes that Smith was “a good instructor. He has a knack for learning things and doing well at them.”

To further beef up the team, Smith hired a right-hand man named Dion DeLaurentis, who wore full-arm tattoos and a carefully groomed beard. DeLaurentis handled a lot of the Air Force training at Fort Dix. Smith also hired a blond personal assistant. She would sometimes play “hostage” at the Holly Springs shoot house, wearing ripped men’s shirts and theatrical makeup to look like she’d been beaten.

During the prime years of SCG, from 2008 to 2010, Smith put on seminars for local law enforcement and submitted more bids to the Pentagon. He also channeled energy into becoming well-known, hiring Lindsay Lohan’s publicist and hatching plans for an action-romance novel called Operation Andre. On July 3, 2009, he rappelled into the sanctuary of a Virginia megachurch as flags unfurled and “The Stars and Stripes Forever” played. He hit the ground with a crisp salute, was introduced as a former Navy Seal, and told a Christian Broadcasting Network reporter that a stunt like his “really energizes the congregation and emphasizes the risks being taken by servicemen and women around the world.”

“The thing about Jamie is that he was certain about everything,” says Charles Cusanno, a retired Pennsylvania state police officer and former SCG trainer. “He acted so sure of himself.”

“He made it a point to inject personal stories into his training,” says Art Watts, a north Mississippi sheriff’s deputy who was hired as a trainer by SCG. “He liked to tell one about being shot with an AK-47 in the shoulder. He said he was working with a team of other spec-ops guys. There was so much bullshit injected into these stories that sometimes I showed up in them.”

The story about getting shot appears to be true. Smith declined to discuss this episode with Outside, but Pelton verifies that Smith was wounded in 2004, when he was traveling near the border of Afghanistan and Pakistan. He wasn’t on a special-ops mission, though: he was working for a news organization that was trying to find Osama bin Laden.

According to Pelton, Smith told him he was shot in the left shoulder by two Taliban on a motorcycle. Smith said he returned fire and killed both his attackers.

Former SCG trainers like Cusanno and Watts says Smith loved action and loved the game-playing aspects of SCG most of all: the paintball fights, the secret meetings, the rescue missions in the shoot house. The trainers and trainees would drive from town to town in north Mississippi to pick up information crucial to the DROK. They’d meet at fried-chicken joints and Memphis bars and rescue hostages held in Conex containers. Men were shot. Plans were thwarted. And, in the end, everybody went home happy. That was key, former SCG employees say. Smith wanted every person who came to Holly Springs to feel like he’d received good training and, just as important, that he had something to offer the company and might be hired someday.

“It was a complete fantasy world,” says Cusanno. “He simulated meetings with arms dealers in bars and would speak with a fake Russian accent. He sounded like that guy from Despicable Me.”

Cusanno was paid $1,800 a week to train Air Force personnel. He says now that he should have noticed warning signs about his boss. “I’ve done undercover work myself,” Cusanno says. “There was something funny about the way he did it. I just never could take him seriously.”

The Sanfords were owed $12.5 million with interest. Instead, after many phone calls, they were told by a laywer of Smith's that the money had been lost in the stock market.

As for the Sanfords, it took a while, but they eventually realized there might be a problem. By May 2009, having made several attempts over the previous 18 months to reach Smith without success, they stepped up their efforts. The Sanfords were owed $12.5 million with interest. Instead, after many phone calls, they were told by a lawyer of Smith’s that the money had been lost in the stock market.

After roughly five dozen more unreturned phone calls, Craig Sanford informed Smith that he’d hired a lawyer. Smith fired back, having his lawyer, Jim Thurman, call and warn of a possible countersuit. Smith claimed that Sanford had threatened him and that he feared for his life. The situation was more than a little ironic. Jamie Smith—a man who would say under oath that he wrote the curriculum the Marines use “to protect generals and colonels” overseas—was apparently scared of a 55-year-old Pennsylvania mechanic with a heart condition.

In an e-mail sent on May 10, 2009, Smith detailed the precautions he thought were necessary to ensure his safety. Among other things, he began carrying a concealed weapon, bought an armored Suburban, and purchased a “protection dog” from Boudreau’s outfit, Baden K-9.

“I had to laugh,” Sanford said when he heard about these measures. “I never have owned a gun. My only military training was as an Eagle Scout.”

Smith’s chief cohort during the conflict that followed was a man named Troy Titus, a huckster who in December 2009 was sentenced to 30 years in prison for what a federal judge called “an absolutely massive fraud.” In September 2005, long before his December 2009 conviction, Titus had been disbarred for abusing client escrow accounts.

Big haired, charismatic, and a Regent University law grad like Smith, Titus took to organizing asset-protection seminars to lure investors. He promised to teach people insider tricks for making money in real estate and minimizing their tax burdens. Instead, he talked them into letting him handle their money. Investors signed promissory notes, but Titus never followed through by buying any properties. The money simply disappeared. His victims—many of them elderly or suffering from serious illnesses—lost more than $10 million.

Titus was an old pal of Smith’s who had helped him during some tough financial times. In 2009, Smith testified that he didn’t see anything wrong with hiring Titus at SCG just three weeks after Titus had been indicted on fraud charges. After all, his friend was innocent until proven guilty.

“I got to thinking, He’s smart, he’s got a law degree,” Smith testified during a hearing before Titus’s fraud trial, “he’s got way more experience at those types of things than I have, and I had some, you know, just some basic things that I needed done.…”

Two months after he hired Titus, Smith started referring to him as his general counsel in correspondence about the World War II movie. Titus had not been allowed to practice law for four years, but he did a lot of legal work for Smith anyway. The disbarred attorney set up companies that Smith used to hold and spend the Sanfords’ money.

Like Smith, Titus professed to be very religious. Titus advised Smith, in e-mails obtained by federal prosecutors, to play hardball with the Sanfords, often in the Lord’s name. In a series of messages dated May 13, 2009, two weeks before the Sanfords’ note was due, Titus told Smith that the Sanfords had “defamed you and your company and attempted to damage your business.”

“It is obvious that Sanford is not a nice person … and God has promised in his Word that he takes from whom he wishes and gives to whom he wishes,” Titus wrote. “Perhaps God is hardening Pharoah’s [sic] heart to glorify himself and bless his people. After all, the children of Israel were able to leave Egypt loaded with wealth due in large part because of Pharoah’s bad behavior. :)”

That bad behavior included the alleged threat Craig Sanford made against Smith. Smith could sue him for that, Titus said, and for defamation.

“You are in the catbird’s seat,” Titus wrote on the day the Sanfords’ money was due. “I have been saying it for some time now. You have the cash, he doesn’t. You have two [possible] civil claims worth much more than his civil claim against you.”

Smith responded about an hour later: “Sounds like a first shot over the bow to me that we should take.”

As of February 2009, Smith’s accounts still held $2.6 million of the Sanfords’ original $12.5 million. Had Smith let it stand, he could have returned something to them, likely enough for them to continue with their retirement plans. But in the e-mail exchanges with Titus, the $12.5 million is never described as belonging to the Sanfords. Neither Smith nor Titus describe the money as lost, either.

“I know God has honored your faith and compassion in this situation and I am confident that He will continue to do so,” Titus wrote in June 2009, several weeks after the note was due. “He gave you $12.5M for a reason, and He is now giving you a huge increase … for a reason, and I firmly believe it is because of your long-standing commitment to your relationship with Him and the furtherance of His Kingdom.”

After Titus was convicted, the FBI looked at Smith, but the investigation didn’t go far—even later, when jurors in civil court found that Smith had defrauded the Sanfords.

“Did Jamie rip them off? Ultimately, he did,” says retired FBI special agent Tom Tierney, who had investigated Titus and also Smith. But Tierney says federal prosecutors decided there wasn’t sufficient evidence to put in front of a grand jury for a criminal charge. In a case with only one victim, the Sanfords, it can be difficult to get a grand jury past the point of a he-said-she-said stalemate.

The Sanfords weren’t the only people who say they were taken in. In 2009, SCG was hired to work on behalf of Robert Levinson, a retired FBI agent who disappeared in Iran in 2007. Smith submitted an invoice with inflated charges. The Levinson family’s representatives—one of them a former FBI agent—said they refused to pay for Smith’s visits to luxury hotels and restaurants in London. Smith also offered to set up a fundraising website for the family, who needed money to underwrite efforts to bring Levinson home. The site was managed by indicted swindler Titus, and the family say they never saw a dime of any proceeds it may have generated. (Smith did not respond to requests for comment about this episode.)

By 2010, a lot of SCG employees were beginning to doubt Smith for a very tangible reason: checks had started bouncing. After depositing an SCG paycheck that summer, Charles Cusanno took his family to Disney World, only to come home to massive overdraft notices. Not long after that, Smith arrived at an Air Force training session in Fort Dix, still driving his big Mercedes.

Cusanno was angry. Later he was told by Todd Smith, who handled SCG’s books, that Jamie owed a lot of people money but he couldn’t be reached. Smith said he was overseas, doing dangerous work for the company. According to credit card statements released during the Sanford case, Smith was spending a lot of his time and money in Hawaii during this period.

Smith appeared on several cable news shows as a counterterrorism and security expert.
Smith appeared on several cable news shows as a counterterrorism and security expert.

In 2010, Smith kept working to broaden his public reach, and he briefly became a fixture on cable news, appearing as a talking-head expert on counterterrorism and security. Walter Morgan, a classmate of Smith’s in high school and at Ole Miss, recalls spotting Smith on Fox News one morning and nearly falling out of his chair. Morgan often played golf with the brother of Fox News anchor Shepard Smith. Morgan says he made one call and Jamie never appeared on Fox again.

As for the Air Force training, it’s unclear who exactly went through it. The Air Force won’t talk about Smith or SCG with us, and our attempt to find answers through a Freedom of Information Act request yielded only copies of contracts, the details of which, except for payment amounts and course dates, had all been redacted.

Rush maintains that, even though Smith’s backstory didn’t hold up, the services SCG provided to its clients and the Air Force were legit: student reviews and official assessments were consistently positive, he says.

Even so, Rush says that by early 2010, the entire operation was running in the red. Smith had hired him in 2009 to manage the business, but not long after his tenure SCG was already starting to have trouble meeting payroll, and it fell behind on payments to contractors fixing up the Holly Springs training center.

The final break between Smith and Rush came in July 2010, when Smith fired him abruptly. Rush says Smith “didn’t have the balls to do it. He sent a lawyer in one morning with a letter.” Rush called an impromptu staff meeting to let his colleagues know, packed his things, and walked out.

In August of 2011, Smith’s troubles compounded rapidly when he was called to testify in the Sanfords’ fraud suit against him, which was heard in federal court in Virginia Beach. On the stand, he insisted that he’d never met, called, or written Craig Sanford, though some of his staff may have. He claimed to have no memory of an e-mail sent from his own account that said: “Craig, it was good to meet you last week and I’m excited about the investment arrangement we discussed and agreed to on Wednesday of that week.”

Sanford, he claimed, essentially sent $12.5 million to a total stranger.

Jurors didn’t buy it. After two days of testimony, they awarded the Sanfords $9.8 million in damages. Smith represented himself in an appeal to the Fourth Circuit Court, but in November 2012, it ruled in favor of the Sanfords. To date, though, aside from the transfer of a few minor assets, none of that money has been repaid.

In spite of such setbacks, Jamie Smith kept plowing forward.

The Arab Spring that had made world headlines in early 2011 prompted uprisings in several Middle Eastern and North African countries, and Smith, sensing an opportunity, went to Washington looking for new business. He arranged meetings on Capitol Hill, trying to line up support to go into Libya to coordinate better communications among the rebels opposed to Muammar Qaddafi.

He turned for help to congresswoman Sue Myrick, a North Carolina Republican who sat on the House Intelligence Committee. Former Myrick aide Andy Polk sat down with Smith for a two-hour breakfast meeting in the spring of 2011—a few weeks into the uprising. He expected Smith to tell him about existing, successful projects in the region as a way to establish credibility, but that never happened. “It was clear that this guy didn’t really have any projects going on,” Polk says. “If he got this going, he could parlay that into more projects.”

In a deposition given nine months later as part of separate real estate litigation, Smith said he had nothing left. He hadn’t received a paycheck in ten months. He didn’t even have a personal checking account. No car. Asked how he got around, he said, “My wife.”

But that’s not what he told Polk and -others whom he courted for business. On February 15, 2011, Smith sent an e-mail to an open account at Stratfor, an Austin, Texas, intelligence and consulting firm. The e-mail wound up among the millions of hacked government documents given to WikiLeaks, which published them a year later. In it, Smith addressed his correspondence to founder George Friedman and “Stratfor Team.”

“My background is CIA,” he wrote, “and our company is comprised of former DOD, CIA and former law enforcement personnel. We provide services for those same groups in the form of training, security, and information collection.”

The e-mail worked: Smith established communications with Stratfor officials. In December 2011, he reported to company vice president of intelligence Fred Burton that he was “getting air cover from Congresswoman Myrick to engage Syrian opposition in Turkey (non-MB and non-Qatari) on a fact finding mission for Congress.” Burton relayed the information to a Stratfor colleague in another e-mail, also later leaked. “The true mission is how they can help in regime change,” Burton wrote. “Source intends to offer his services to help protect the opposition members, like he had underway in Libya.”

Polk says Smith’s message misrepresented Myrick’s level of interest: during the entire time Polk worked for her, she never did anything to help Smith. According to Smith’s own account in the Stratfor e-mails, he got over there anyway. He said he was in Libya in September and October of 2011, working with the opposition to Qaddafi.

The death blow for SCG came in an August 29, 2012, letter from acting deputy Air Force general counsel David Robbins. The Air Force intended to “debar”—ban—Smith and SCG from any new contracts for three years. It cited the judgment in the Sanford lawsuit as the reason.

SCG had a right to protest the move, but it never replied, and the ban took effect on October 17, 2012. Robbins wrote that a “preponderance of the evidence establishes … SCG has failed to demonstrate its present responsibility; and debarment is in the public interest and necessary to protect the Government’s interests.” Word of the Sanford fraud judgment spread. SCG was done, and Smith really did go undercover, all but disappearing for the next two years.

During that time, some people thought Smith was in Africa, others Texas. The SCG International compound shut its gates. Crump Place, the mansion in Holly Springs, went on the market with peeling paint and an unkempt lawn.

Former SCG employees later found themselves online, featured in a training video for a new company called Gray Solutions. The wording in Gray’s press releases is taken nearly verbatim from old SCG materials. “We never lost a client,” Gray’s new website reads, “something not many can say.”

Gray Solutions, which does not seem to have done much before March 2014, is described as a company that “actively supports and assists high net worth individuals and institutional investors seeking to diversify their holdings, secure their investments, and source acquisition opportunities in alternative assets.” Smith denied he had anything to do with Gray when we spoke to him in April, although the e-mails he sent Stratfor came through the company’s website.

Smith was initially friendly when we interviewed him last spring, and he talked over the phone in a good-natured way. He said he’d spent most of the past two years in Libya and Syria but had now settled in D.C., where he hoped to spend more time with his family.

“I went over basically to do some digging around for a government organization in the U.S.—in Libya and in Syria as well,” he said. “I can’t get into that, because it’s part of the book, and the agency’s still reviewing that.”

The jacket copy of Gray Work claims that Smith performed covert ops in Afghanistan, Iraq, Iran, Libya, and Syria. In 2013, Smith tweeted a shirtless selfie (since removed) with a location stamp of Dubai.

After the book was delayed the second time, we again tried to contact Smith about his overseas work. He did not respond.

Asked earlier about the book’s contents, Smith said he couldn’t say anything until it’s published. Then he flipped the questioning. “Let me ask you guys something before we get off into this,” he said. “What is the interest in little me when the book’s not even out yet, by Outside magazine? I mean, who’s the guy or the girl behind you guys digging into me like I’m, you know, Oliver Stone?”

Asked about the Sanfords, Smith stuck to his story that he never met Craig Sanford before he received their money. He denied his friendship and business relationship with Troy Titus and said that the millions paid by the Defense Department to SCG was money well spent. “We did a great job,” he said, “everyone was happy.”

When asked how he managed to become a government spy only two years out of South Panola high, he said, “That’s in the book. They had a special program where people… They had about three different programs for undergrads. And that’s what I get into in the first five chapters, really.”

A former deputy director of the CIA’s National Clandestine Service, who asked not to be named, told us he’d “never heard of any program within the DO/NCS”—the Directorate of Operations/National Clandestine Service*—“that allowed for an undergraduate to go undercover.”

Throughout his interview with us, Smith was contentious as he stood by the main elements of his story. At the end, he apologized for that, sounding almost resigned. “You can beat me up all you want to,” he said. “I’ve been beat up for four, five years. One more article isn’t going to hurt.”

Before Jamie Smith came along, Craig Sanford, who’s now 60, had been looking forward to completing his vacation house out on a lake the Sanfords love called Wallenpaupack. Instead, he and Mary Jo are trying to rebuild their retirement fund. Craig, whose cancer is in remission, works seven days a week at his garage, fixing trucks. Mary Jo had to take a job with the company that bought them out, consolidating reports of medical-waste pickup along the East Coast.

“One would only hope that Jamie has to go through half the hell that we went through,” Craig says now. “We worked and sweated for years to build that company.” Losing their money to Smith, he says, has “put a strain on my relationship with my wife and kids. There’s not a day that goes by without thinking of his face.”

Mary Jo says the whole ordeal has changed them. “You don’t trust people,” she says. “You can’t trust anybody.” They’ve particularly lost faith in the FBI, the IRS, and the justice system. They won a battle in federal court, but that doesn’t mean much. “We won,” Mary Jo says. “Woohoo. Won what? Where are the assets?”

As for Smith, he was rumored to be in Batesville earlier this year, riding his motorcycle. He told friends at the First Baptist Church that he’ll soon be going on a book tour. Gray Work will launch his comeback.

His college roommate Clay Fisher believes it’s just more of the same old comic-book adventure. But he’s not surprised. Fisher says he recalls seeing a letter Smith had got published in the local paper in which he talked about being a decorated spy in the Gulf War. When Fisher had called him on it, Smith just laughed it off.

This wasn’t the first time Fisher had confronted his friend. Just a few years out of Ole Miss, Fisher attended a summertime service at a Memphis megachurch, where he saw Jamie and Todd Smith. When the pastor wanted to recognize those who’d served in Operation Desert Storm, both brothers stood. Fisher couldn’t help but laugh that Jamie would lie about something so important. When he stared down Jamie among the flags and the hymnals, Jamie just smiled and put a finger to his lips. Shhh

Ace Atkins is a journalist and novelist in Oxford, Mississippi. Michael Fechter, who lives in Tampa, Florida, is a former investigative reporter for the Tampa Tribune.

*The print version of this story incorrectly referred to the National Clandestine Service as the National Security Service. Outside regrets the error.

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