few weeks ago we heard from Jed Morris, who lost his business and has since connected with dozens of other searchers with bad outcomes. A key finding from those conversations is that seller dishonesty is the number one reason for acquisitions gone wrong.

Today's story is a case in point.

Jason Jackson learned during transition, from an offhand comment by one of the employees, that the business he just bought was being audited for its Medicaid claims.

As he pulled the thread, he learned that the business was defrauding Medicaid and was actually losing money if you stripped out all the fraudulent revenue.

Imagine that:

You think you're acquiring a $1.5m SDE business; instead it's an organization in the red, engaging in fraud.

Today's interview is the 6-year journey to turn it all around.

And there are gems aplenty.

Listen for:

• How Jason and his partner corrected a corroded culture.
• How they worked every nontechnical position to learn it (and because they were short-staffed).
• The math that one of their investors used to persuade them to stop litigating the seller and instead focus on building.
• And my favorite moment, why this same investor's reaction to the bad news of the fraud moved Jason to tears.
• The value of pattern recognition.
• And finally, the decision to exit the business, which after 6 years was showing a lot of potential.

Ultimately Jason & his partner actually generated a return for their investors, who thought they'd only get 10 cents back on the dollar.

As evidence of their appreciation of this performance, Jason now works alongside those investors as a partner in their fund.

Here he is, Jason Jackson of Futaleufu Partners.