No one starts of to be a fraudster. Well I suppose there are a few bad seeds, but most people whose names are in the headlines – people who have been linked with financial failure and investor fraud, don’t start off their career thinking, “Wonder who I can scam today?”. Al Kaleta didn’t start that way. David Wallace didn’t start that way. And, certainly, Daniel Frishberg didn’t intend, at least not at first, to defraud.
So what happened?
I wasn’t there. So, there are those who will say that I am only speculating and that’s something I should not do. Yet, daily I’m getting confirmations via email and phone saying that what has been written thus far is dead on point. One person, humorously said, “Are you sure you haven’t lived here or worked in the past for BizRadio, cause you seem to have an uncanny insight.” To be clear – NO and NO. Perhaps the reason I’m on point is I’ve been there before. I understand what’s happened cause I’ve lived it and know how it happens and, more importantly, what happens when the fraud or scam collapses. It’s not pretty!
So let me speculate (and yes, speculate is the operative word).
Dan Frishberg – as a young man – worked in and around the financial services industry. He learned about the market, traded and found (that as a smart man) he had the aptitude for financial services type work. If Wikipedia is accurate, Frishberg worked for the financial services division at Prudential in San Antonio and later did radio advertising for the company; he appeared frequently on air. Radio station KTSA hired him to do a financial program. After the show gained popularity, Frishberg formed the BizRadio Network in Houston.
My guess is “radio” for Dan was a bit of a drug. He had the skill and moxey to put him self out there and found out quickly that being on the air created a bit of celebrity. His voice beamed out over the airwave and not long thereafter Dan tagged himself “The Money Man”. Dan became the go to guy – the person who had an opinion and was glad to share it. And, for anyone involved in talk radio, when others listened or, even better, sought your opinion – you are more than willing to talk.
Now, Houston is not an insignificant market. So if you’re in a major market then it becomes a bit easier to gain attention and attention is what Dan got. Interviewed on Fox and CNBC (seen here and here), and having published (his self published book) “Escape from the Herd,” Dan found that getting attention wasn’t all that hard. By then, he had formed BizRadio and I believe had visions of grandeur – Frishberg could be the next “Jim Cramer.”
From Americandreaminabox.com – Daniel Frishberg has become one of the most sought after financial faces on national TV, appearing several times each week on CNBC, Fox, and the Canadian Business News Network. His commentary is also carried on a rapidly growing number of local TV stations all over the country, while his weekly series “Where Genius Meets Street Smarts” is by far the most downloaded financial podcast on the BizRadio Network.
How do I know this…well some of this is speculation – intuitive speculation – and the rest has been pieced together from interviews from investors who have been scammed. But, from a personal perspective, I was approached by a BizRadio representative asking if I didn’t want to air a show on their station in Dallas. Simply put – what they offered was PAY to PLAY. I would pay dearly for time on their weak station just so I could be associated with BizRadio – the show that tapped into the business movers and shakers – the show that tapped into folks with money!
I TURNED THEM DOWN. Their offering just made no practical business sense. As best I could determine, Frishberg just wanted to broker time in order to fund his station and radio addiction. He was creating the illusion that he was “the man” and needed money to perpetuate the business.
Well…on with my speculative story… As 2008 drew to a close and 2009 began, Dan found that expanding his air time presence was growing increasing easy and that supported his brand – BizRadio. The only problem was – BizRadio had never made money, in fact, it was a great money sucking machine that only benefited Dan’s dream. There is zero doubt that Dan saw BizRadio as a brand that, once took hold, could be no different than “The Street” or any other major syndicated talk show program that becomes worth millions. Gosh, if Dave Ramsey could do it, if Jim Cramer could do it, if Rush Limbaugh could do it – Dan Frishberg could do it.
But, in my opinion, here’s where the problem really surfaced. Dan Frishberg seems to have a problem (as smart as he is) in distinguishing between illusion and reality. Reality was – his radio station was a losing proposition and had been from the start. Reality was, Dan – while touting investment advice – was not adept at the art of running a business, especially a radio station for profit. Reality was, Dan should have branded himself and not attempted to sell the “dream” of the station. But, Dan didn’t then get reality and, frankly, I’m not sure if he’s connected to reality yet today. Dan was living an ILLUSION. He created the illusion, the believed in the illusion. In fact, the Illusion became his life, at least from all I’ve been told.
So what do you do when you have a losing business that requires substantial capital and the failure of your business means your personal failure?
When I talk about fraud, I often cite three factors in creating a fraud or scam: NEED, OPPORTUNITY and RATIONALIZATION.
So let’s look at Dan’s devastating disaster and see how the pieces fit. ONE – Dan needed money. He was poor at selling advertising (and probably if the truth were known didn’t like the day to day operation of a radio station) and as time moved on and his ego in broadcasting grew, he began to believe his own bulls__t. He became a pain to deal with as he was caught up in his own self-importance. NEED that one is easy!
OPPORTUNITY – Dan had one major asset to help him solve his money problem – he had branded himself as “The Money Man.” So, on the radio daily, featured from time to time on FOX and CNBC, Dan was able to grow an effective illusion so he could attract investors. The real question to me is who scammed whom? Dan needed fund and others like Al Kaleta and David Wallace did too. They came to the table with an investor base believing that Dan could help them expand their base and hence their access to cash. On the other hand, Dan knew that they had access to cash and he needed that badly. Dan sold them on the BizRadio dream. I can hear it now…I have a dream that one day I’ll be as big as Jim Cramer (just not as wild) and BizRadio will be sold to a major player and we’ll all walk away with more wealth than we can imagine! Dan needed them – they needed Dan – oh is this a marriage made in heaven or what?
RATIONALIZATION – So…investors invest with Kaleta, David Wallace, and others well known names under one pretense only now to find that their money was invested (or some say stolen) by BizRadio to support the extremely capital intensive and draining operation. But didn’t Dan know what he was doing? Now, that’s a great question. My answer – NO! Dan was so caught up in his ILLUSION that he became incapable of distinguishing illusion from reality. And, that’s the way it goes…till…
The SEC stepped in and Kaleta was busted. While I can’t confirm an SEC investigation (I don’t know that for a fact), I do know that if there isn’t one they are sure missing a golden opportunity to stop this madness. The card has been pulled from this house of cards, the only thing left is to watch them collapse.
Dan Frishberg is a smart man, talented, articulate. But, Dan’s dynamic dream is becoming a devastating disaster…and we are witnessing it’s collapse now. It’s sad for the defrauded investors and it’s sad for Dan. But, every choice has a consequence and I believe that Dan’s consequences will be far greater than he could ever imagine. When a massive ILLUSION collapses the REALITY that follows can be profound! As much as I find displeasure in my next words – I predict that Dan Frishberg will have time to evaluate REALITY in PRISON and he may not be alone.
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