The swindler known as the "Wolf of Wall Street" taught me how to pull off his boiler-room fraud, down to the smallest details. Movie director Martin Scorsese's lurid version of the tale now showing in multiplexes doesn't capture how the scams really worked.

In early 2000, Jordan Belfort and Danny Porush (renamed Donnie Azoff in the movie) were under house arrest. Faced with overwhelming evidence, they had cut deals with the government to reduce their jail sentences by ratting on their friends. One such friend was...