By Frank Parlato
THE INFORMANT SERIES
How James D. Clark Cheated Retirees, Dodged a Federal Fraud Investigation, and Bought His Freedom With Leo Grillo
PART ONE: THE TRADE
It is not often that we get inside the FBI to see how its informants work.
Happily, we have that view in the case of James D. Clark of Phoenix, Arizona.
In June 2024, Clark filed for bankruptcy for his company, Midas Gold Group. The trustee suspected fraud and subpoenaed three and a half years of the company’s bank records.
The issue was that 118 people had paid Clark’s company for gold, only to discover he never delivered it to the vaults of the gold storage companies. Creditors, mostly older people who had invested with Clark as part of their retirement plans, claimed more than $6 million in undelivered gold.
It drew the FBI’s attention. Clark found he was under an active investigation. Facing the possibility of decades in federal prison, Clark made a deduction.
Federal prosecutors can offer deals to people who cooperate. There are no guarantees, and nothing is put in writing. But the understanding is to deliver something valuable, and the FBI will consider leniency in your case. The more dramatic the delivery, the better the consideration.
A fraud case involving unfilled gold orders and missing investor funds is a financial crime. Important to the victims. Not the kind of thing that generates a press conference or a television camera outside a courthouse.
A kidnapping is different.
Clark needed a target, someone desperate enough, angry enough, and vulnerable enough to be led toward conduct that could be charged as a federal crime.
The target need not be a criminal. He had to be someone who could be led into conduct that could be charged as one.
The swindler of the elderly, James Clark, knew Leo Grillo. He had already stolen from him in a currency exchange deal. He knew Grillo was 77, financially threatened by a civil verdict he believed was rigged, and watching the animal sanctuary he had built over 45 years collapsing around him.
Grillo was not a criminal. He was a desperate old man who loved his animals.
Clark flew from Arizona to California.
What the FBI got in return for overlooking Clark’s fraud was an attempted kidnapping case against a 77-year-old with no criminal record — a case in which no kidnapping took place, no one was seized, the photograph of the alleged victims was fabricated by federal agents, and the target of the kidnapping plot was sitting safely at home in Lancaster, California.
A footnote buried in the FBI’s affidavit for Grillo’s arrest states: “CW1 is the target of a separate FBI investigation into alleged fraud. CW1 is working with law enforcement in hopes of receiving favorable consideration in connection with that investigation.”
CW1 is James Clark
The FBI knew Clark had cheated retirees out of millions. They knew he was under investigation for fraud. They knew the bankruptcy trustee was forcing him under oath and subpoenaing his bank records. They used him anyway.
There is an old Hans Christian Andersen story about a man who traded a horse for a cow, the cow for a sheep, the sheep for a goose, and kept trading down until he ended up with a bag of rotten apples. His wife thought he had done wonderfully. Everyone else thought he was a fool.
The FBI had a bonanza in Clark. They traded it for a headline.
Leo Grillo, 77, has a heart condition. He has been held without bail since March 3, 2026, in a federal detention center, sleeping in a cell with career criminals, drinking coffee from a jalapeño jar, and unable to get his heart medication. He has no prior criminal record. He has never been arrested. He spent 45 years building the world’s largest no-kill care-for-life animal sanctuary.
The man who cheated him and 118 retirees is free.
The man who built the animal sanctuary is not.
Next: The family business — and the pattern Clark learned from his father and his father’s convicted partner.
ARTVOICE ART
See also:
Feds Indict Grillo: DELTA Rescue Founder Faces Kidnapping Charge Based on Fraudster’s Entrapment
LA Times Got the Grillo Kidnap Story Wrong
1,000 Dogs Will Die If the FBI Wins This Case
FBI Setup? DELTA Rescue’s Founder Arrested
