CEO Entrepreneur lands in wrong prison- Aaron Duncan

A St. Louis Kid Who Took a Hard Left Out of Baseball

When I talked with Aaron Duncan on the podcast, he started where every St. Louis story starts. The high school question. He went to McCluer North, finished junior high at Cross Keys, and before that he was a kid in Ferguson learning how to fight because, as he put it, a lot of those kids were “picking on the little white guy.” His dad worked at McDonnell Douglas and pushed sports hard. Aaron played varsity baseball, football, and wrestled, all four years. Shortstop. Good glove, decent bat, and by his junior year scouts were watching him pitch.

Then, his senior year, he had to walk into his dad’s life and tell him he was done with baseball. Which meant he was done with college. “I think he disowned me,” Aaron told me. “He had three sons and then there were two.” His dad had earned a master’s degree at night while coaching Little League and working full-time. That’s the bar Aaron grew up under, and he was telling that man he was walking away from the scholarship offers.

What he walked into instead was Southwest Airlines at 19, loading luggage on the ramp in the St. Louis summer. Brutal work. He mentioned that guys who started with him back then just retired from Southwest last year. He thinks about that sometimes.

From the Ramp to the Internet

Aaron and his wife got married young, right out of high school. They moved into youth ministry for seven years, working with kids from about 13 to 19, trying to keep them off the things that were already eating up their generation. He liked the work. It was a weekend gig, though, so he kept hunting.

He saw an ad in the St. Louis Post-Dispatch in the 90s. TWA wanted to be the first airline to sell tickets through a website. Aaron admits he lied his way through the interview. He had airline experience, technically. Loading bags counts, right? They stuck him in a closet with a small budget and told him to build it.

He built it. Four years at TWA headquarters in downtown St. Louis, and his team was the first to pull it off. Then the executives told him to double the revenue. Twenty-something kids being asked to find $300 million. They locked themselves away for a week and decided to partner with hotel chains, rental car companies, and travel brands to bundle everything into one package. They called them dot-com deals. Fly St. Louis to Los Angeles, your rental car ready, your hotel booked, all of it under one purchase. For four years they hit the number.

Then Carl Icahn took over TWA. Aaron’s whole team got let go. No severance. He drove home to a wife and a two-month-old daughter and had to say there was no health insurance, no income, and no check coming in two weeks.

Becoming an Entrepreneur Before That Was a Word

Aaron went for a drive, came back a couple of hours later, and told his wife he was going to be an entrepreneur. “She’s like, what the hell is an entrepreneur,” he said. In the 90s, nobody used the word the way people use it now. He meant he was starting a marketing agency. He called the hotel and rental car contacts he’d built at TWA, and some of them became his first clients.

They struggled for three or four years. Then some seed money came back from small investments he’d made in old TWA teammates whose companies were now going public, the Travelocity and Expedia generation that was eating the model TWA had pioneered. He put that money into his marketing company and a few years later he sold it.

Then came 2008. Aaron partnered with a childhood friend who was a real estate guy. Aaron handled marketing. The friend handled the properties. Aaron eventually noticed money missing, took the financials to his accountant, and got the answer he didn’t want. His childhood friend was embezzling.

When Aaron drove over to confront him, he opened a closed office door he probably shouldn’t have. The friend was in there with his secretary. Aaron told me, “that answered that question.” Instead of suing or pressing charges, he just took the company back and walked away. Same year, he found out his national sales director, also a friend, had been embezzling too. Two hits in less than a year. And he was going through a divorce.

The Duncan Group

Missouri is a 50-50 state, so half his net worth went one direction and his ex-wife got the house and the cars. Child support was heavy. He needed to rebuild fast, and he kept thinking about the real estate strategy that first friend had used. He liked the model enough to adopt it. He started his own real estate company and named it the Duncan Group. After himself. He wants people to remember that detail.

The model was flipping properties in St. Louis, Dallas, and other markets, partnering with companies that needed to dump foreclosures, rehabbing them and selling them. It was working. Someone suggested bringing in outside investors so other people could share the upside, and Aaron liked that idea. His outside law firms taught him about accredited versus non-accredited investors, how to vet people, how to structure the paperwork. When an investor came in, their name went on the deed of the property. That was the collateral.

To cut legal costs, he brought on an in-house attorney who’d been a friend from the club scene. The attorney’s own mother invested in the Duncan Group, and the attorney earned a commission for bringing her in.

Then 2008 hit. Aaron described it like waking up to a different world. A property they’d bought for $100,000, for easy math, was worth $50,000 the next morning. They had promissory notes out to short-term investors, some on 120-day timelines, expecting their money back plus a return. Around 70-plus investors total, including Aaron’s parents, his brother, his grandparents, and most of his executive team.

He ran weekly conference calls. He told investors the truth. His plan was to ask long-term investors, the ones in for 10, 20, or 30 years, if their capital could be used to pay off the short-term investors and fend off lawsuits, then restructure and keep going. Bankruptcy was brought up. He didn’t want it. As soon as it was, his in-house attorney went to the feds.

When the Federal Government Knocks

Aaron came back from a trip and his secretary told him the in-house attorney had been in his office copying every document he could. When Aaron checked the file on the attorney’s mother, the original documents were gone.

First came a cease and desist from the state of Missouri. Aaron couldn’t sell a single property, couldn’t make payroll, couldn’t move. He hoped it was temporary. Then he heard the Securities and Exchange Commission named, and then a notice arrived with a federal seal asking for documents on disc inside three or four days. Everyone who worked for him was already gone, out looking for jobs. He was doing it alone.

He described the feeling using an analogy someone had given him recently. You fall into a dark hole. At first you can grab the sides, but each time you try, the hole gets wider. Eventually you realize you’re just spinning at the bottom in the dark. “That’s how it felt,” Aaron said.

Finding an attorney was its own problem. The good ones were expensive. Friends he reached out to kept hitting conflict-of-interest walls. He eventually landed with a criminal defense attorney who was also a forensic accountant, which is the combination he needed. The agreement was that Aaron would turn himself in. That isn’t how it played out.

The Knock at His Parents’ Door

Aaron had lost everything and moved back in with his parents. About 6:30 one morning, his dad answered the door. His mom came upstairs and said someone was there to see him. When Aaron came down, his dad’s face was white. A female FBI agent was on the front porch, vest on, weapon drawn. By Aaron’s count, 9, 10, or 11 agents had surrounded his parents’ home.

They handcuffed him, drove him to the federal building, put him in a holding cell for three hours, then took him up to a magistrate. The indictment was around 17 counts. Wire fraud. Mail fraud. The kind of stack that, on paper, totals more than a thousand years before sentencing guidelines bring it back to earth.

Aaron is clear about how he sees it. He named the company after his own last name. He had family invested. He had divisions and employees. He ran weekly calls with investors when the market crashed. “To say that that was a Ponzi scheme is, is so wrong in every way,” he told me.

Today Aaron runs Elevate Media, working in communications and reputation management with people walking into their own indictments and crises. He’s using what he learned the hard way to help people who are right where he was the morning his dad opened that door. That’s where his story is now, and that’s the part he wants people to know.