As if the problems (mostly self inflicted) of Dan Frishberg and BizRadio staying on the air, and trying to continue a format that has come under intense scrutiny as of late, was not enough – now comes Rehan Siddiqi with a lawsuit claiming damages in excess of $18,000,000. As I state in my seminars – EVERY CHOICE HAS A CONSEQUENCE – and it would seem that Frishberg’s actions are producing some consequences that far reaching and have potentially negative financial implications.
The fundamental premise of the lawsuit is as follows (please note that this is an abbreviated report of the lawsuit):
- The lawsuit claims: breach of contract, fraud and misrepresentation, conspiracy claims, breach of fiduciary duty, conversion and theft, and many many others.
- Siddiqi CEO of Asia Vision claims he’s operated and broadcasts daily radio broadcasts in the Houston market for over 12 years. And, broadcasting generated substantial revenue and was Siddiqi’s core business without which, Siddiqi’s business would be decimated.
- Prior to November 2009 Frishberg et al approached Siddiqi about entering into a long term 5 year lease to broadcast on 1110 AM for $50,000 per month. On November 25, 2009 Siddiqi – Asia Vision, Inc. entered into said agreement. The agreement also provided Siddiqi a purchase option of 1110 AM for $3.5 million.
- Defendants (Frishberg et al) needing capital approached Siddiqi asking for 6 months lease in advance and agreed that if such sum were paid they would reduce the monthly lease amount to $30,000 per month requiring a payment of some $180,000. The agreement was signed on December 29, 2009 and Siddiqi, through a series of payments, paid and Defendants accepted the total of $180,000.
- As evidence of acceptance of said agreement, Frishberg and BizRadio began broadcasting on 1180 AM on January 1, 2010 and Siddiqi – Asia Vision moved to 1110 AM for the entire month of January 2010.
- Frishberg, unable to pay the deposit required by 1180 AM, removed Siddiqi from 1110 AM on February 2010 which resulted in the beginning of legal actions and the seeking of Temporary Restraining Orders – one of which Siddiqi won and the second round went to Frishberg.
From that simple background (none of which is new news) the lawsuit states:
Plaintiffs have contractual obligations that depend on their ability to broadcast and air their radio programming. As a direct and proximate result of Defendant’s actions, Plaintiffs have lost and continue to lose customers and clients. Plaintiffs reputation and standing in the commercial broadcast and radio programming business have been harmed and damaged, and will continue to suffer and incur injuries. Plaintiffs have other business interests that are directly and indirectly tied to their ability to broadcast their radio programs, which interests are now being jeopardized. Given the financial standing of the Defendants; their fraud and investment scams; their moving of funds and money to a number of related entities; their hiding of funds and assets; and the on-going Federal SEC proceedings, Plaintiffs injuries and damages appear to be, and are likely to remain, irreparable and uncompensable. Defendants have demonstrated a lack of sufficient funds to stay on radio station 1180 AM, and have shown that they lack the financial wherewithall to compensate Plaintiffs for the damages they have inflicted, and continue to inflict, on Plaintiffs. Asia Vision continues to lose advertising revenue and advertisers as each day goes by with Plaintiffs being defrauded by Defendants, and with Plaintiffs being unable to broadcast their radio programming. Siddiqi’s radio personality has been and continues to be severely damaged as a result of Defendants fraud, breaches and on-going conspiracy.
When I saw this hit…I made an effort to interview Rehan Siddiqi (not that I expected him to accept – considering the stonewall that I’ve felt from Frishberg, but delighted he did). The questions are listed in bold and Mr. Siddiqi’s responses are quoted in blue. The interview follows:
Mr. Siddiq, thank you for agreeing to this interview. I have several questions related to your lawsuit. I hope that you will consider candid answers, however, let me state up front, this will be published in my blog and, as such, do not share answers with me that you do not wish to have in the public domain. Are we clear?
Before we get to the content of your lawsuit, can you share with me your relationship prior to entering into this agreement with Mr. Frishberg and BizRadio?
Absolutely. Mr. Frishberg was introduced to me by a mutual friend…a friend of mine and also one of Mr. Frishberg’s investors in a fund, I think called Wallace Bajjali.
It looked like you were listed as a Vice-President with BizRadio sometime this past fall 2009. What was your position?
Being in the South Asian market, I come across a lot of national and local advertisers and I was asked by Mr. Al Kaleta to bring in some more business and talk with some of my current advertisers or advertisers that I know. They were struggling. They had a great format and perhaps some of these advertisers would want to target that market.
So you were offered commission to bring them advertisers?
And, how long did you hold that position?
Actually until the day they hijacked my frequency.
I’m confused. They reflected you on the web site as a VP of Marketing, but basically that was a commissioned sales position? You weren’t on the payroll as a salaried person?
No. I was basically on a project to project commission. And, to answer your question, I was not only listed on the web site, but was given business cards by Mr. Al Kaleta.
I’m sorry I missed that, but how long were you connected with BizRadio doing sales and so forth?
I was introduced to Mr. Kaleta and Mr. Frishberg some two years ago. Mr. Sargent Hussain suggested that he had invested with a company that owned a radio station and that I might want to know them.
You sound like a fairly young man and your suit states you’ve been broadcasting for some 12 years. How did you get into the broadcasting business?
I was one of the very first to initiate a 24/7 South Asian radio format. I’m from a market that’s a minority. There are some 300,000 or more South Asians in the market. Prior to the 24/7 format, I would broker time on stations to serve my market segment.
Let’s move on to the lawsuit. Did you approach Frishberg and Crider about leasing/buying 1110 AM or did they approach you?
Well actually Sargent Hussain told me that Mr. Kaleta would like to meet me and maybe there is a business deal that can be made out of 1110 AM. I met with Mr. Kaleta and we had about a 45 minute meeting. They were not happy with 1110 AM: (a) they felt that the broker ripped them off by selling them a station that was worth $3 to $3.5 million for $7.7 million; and (b) they were not happy with the coverage from the station. They said they would like to be on 1180 AM with 24/7 coverage and a strong signal.
About that time Mr. Frishberg walked into the room and says to Mr. Kaleta, “What ever deal you need to make with the radio station needs to be made through my CEO. We don’t know this business. If we knew this business well we wouldn’t have bought the station for $7.7. Now we have a radio man working for us and his name is Ron Crider.” Mr. Frishberg gave me Mr. Crider’s phone number and said he would be in town sometime next week.
When you were approached about leasing 1110 AM – do you think now that you were being scammed at the beginning or do you think they were serious?
No…I thought they were very serious. They had a good business plan. The reasons they gave me for why they needed to be on 1180 AM and why I needed to be on 1110 AM and how it was going to help them and how it was going to help me … it just completely made perfect sense.
In your opinion, do you think that the funds requested (that you paid) some $180,000 were requested so that BizRadio and Frishberg could pay 1180 AM the deposit they required?
Well, they desperately needed money. They were not getting their RIA at the time and needed cash flow. They did not have money to pay for their payroll. There money was with Fidelity and I was told they were going to be changing banks. There money (with that change) would start making their RIA again and starting January 15th (2010) things would get back to normal because they would begin again getting their commission. Apparently, that didn’t happen so they did not give 1180 AM the letter of credit and got kicked off the station.
Do you think that Frishberg truly wanted to broadcast BizRadio on 1180 AM? If so, how did he think he could do that considering the financial meltdown that seems to have been already started when you entered into the lease?
If Frishberg didn’t want to be on 1180 AM then why would he sign a contract and give them $75,000 to broadcast in January. I think he expected the financial maneuvering to work and he would be able to meeting the demands of 1180 AM. At that time Frishberg was, I think, on in Dallas and certainly on in San Antonio along with Crider’s other stations through his network. I think he got stuck with Fidelity cause they truly did not want to do business with him and he hoped the other company would quickly come in.
I had no reason to believe that Frishberg would be a problem. To be honest I had no reason to believe that Frishberg was a scam artist, a liar, or that there was a whole fraudulent thing going on with these investors until the day he surprised me in the court by perjuring himself by saying that Ron Crider was not the CEO.
You state in your lawsuit, that Daniel Frishberg has interfered, and continues to interfere, with your business and contractual relationships. How?
Number 1 – he took my station away. Number 2 – all the business that I had, all the contracts that I had I basically have lost. Plus since I had paid six months in advance, I felt that the money coming in from ad revenue would be positive cash flow that I could use to pay my loans and contracts. Now I will be forced to default on my obligations.
The radio business is about consistency. The contract that I have right now is a month to month contract. I don’t even have a contract for the month of April. I cannot sign a contract with my advertisers for April. I have lost sponsors and advertisers. I can’t provide a letter of credit to any station. Why? Frishberg took my money.
You state that Frishberg committed PERJURY in his testimony before the court? Give me an example of what you mean?
Frishberg stated that Ron Crider was not the CEO for BizRadio. Here’s what I believe. They introduced me to their CEO. Every meeting I’m in they either see me talking to him or are sitting with me in that meeting. The money that I gave them…they put that in their account. They send out press releases. They put it on their web site. They give me a business card. Ron Crider has a business card. Frishberg is in the meeting. Kaleta is in the meeting. The entire office staff is in the meeting. Flyers, advertising and radio promos were put together. I would never believe in the world that Frishberg was going to come in the court and say “Crider was never my CEO.”
He shocked me. Now I am going to rewind from the day I started talking to him. Everything this man said was a lie!
Likewise, you claim that Frishberg and BizRadio (the Defendants) stole money from you. In the lawsuit it is referred to as Conversion and Theft. Do you think that was there intent at the beginning or do you think that it was a result of the collapse of Frishberg’s financial position?
Once somebody lies to you, then when you look back you begin to think that all they told you was a lie. Was it set up on me from day one, I truly believe that now. He was trying to solve his issues, his problems and basically he did that with my money. He (Frishberg) decided to send me an email, late in the night, hours before he was going to take me over, to give me notice. I begged Mr. Kaleta at 1:00 o’clock in the morning, “Let me go on the air for one hour and say, hey guys there’s a problem there’s a situation, but we’re going to get that handled.” But NO! He was more concerned to impress his $300 million dollar investors – to let them know that Frishberg was still on the air.
He (Kaleta) decided to get me out of business.
GALLAGHER COMMENT: I am amazed by this revelation. I thought that Kaleta was to have NO CONTACT with investment advisers and since Frishberg and BizRadio had been enjoined by the SEC receiver – that seemed to be a gutsy – NO STUPID move.
You also claim CONSPIRACY. From what I’ve seen and read, Ron Crider was active with you in the negotiation of the lease purchase option for 1110 AM. Do you think Crider conspired as an agent of Frishberg?
No…I have nothing but respect for Ron Crider. Mr. Crider has treated me with respect and fairly.
When you paid the money to BizRadio who was involved?
Mr. Al Kaleta. He was the one who took the payment from me. Now the question is, Mr. Al Kaleta offices next to Mr. Frishberg gives this money to Mr. Frishberg who gives it to Entravision (1180 AM). So yes, they were using my money to pay for there other bills including the one month lease to 1180. Only $75,000 went to 1180. What happened to the rest of that money? It went to payroll, office rent, etc.
Now knowing that Mr. Kaleta was to have nothing to do with Frishberg and BizRadio, with the SEC review I think they are in more trouble that they ever thought they would be.
What do you think the outcome of this will be?
You know, I really don’t know what the outcome of this lawsuit will be. For all the fraud, scam and con artists these people appear to be, I would be glad if investors, that Mr. Frishberg is trying to get and scam, could see the facts and protect themselves and their investments.
BizRadio and Frishberg seems to lack funds to operate what they have, how do you think that you’ll gain financially if you are the victor in this lawsuit?
First, I need to be compensated for my loss, if that can truly happen. But, if I can save the millions and millions of dollars from future potential investors from being scammed then I will have success.
The story continues to unfold. What do I think about the Siddiqi lawsuit? While not an attorney, he damn sure has a case. Where there is smoke there is fire and I feel soon this one will be blazing.
- One, I know that the SEC receiver is looking in every nook and cranny to find funds to make who investors who have been defrauded.
- Two, I would not be surprised if the SEC investigation focused their white hot spotlight on Frishberg. My guess is it is there, but no one will admit to it.
- Three, if I were an investor, for any liquid asset I had, I would take it from Frishberg and invest elsewhere. Think about this…the folks who liquidated their investments with Bernie Madoff are likely better off than those who rode that sinking ship all the way into the ocean. Frishberg has too much baggage now to truly be effective.
- Four, I AM AMAZED that the criminal investigative arm of the SEC, FBI or IRS hasn’t yet jumped into the fray. Seems that Kaleta got a bit of a pass. Of course, the criminal side has a much longer statute of limitations to do their work than the civil side, so that might explain why civil first. God help Mr. Frishberg if he finds himself on the other end of criminal investigators as they usually get their man. Just ask “The Talented Mr. Madoff!”
As I’ve said in past blogs…MORE TO COME.
AND COMMENTS ARE WELCOME.