Talking about twists and turns – this whole BizRadio, Al Kaleta, Daniel Frishberg mess gets more amazing by the day. At times I’ve wondered if the “fraud” (labeled by the SEC Receiver) was blatant or if these guys were just plain stupid. Quickly I’m coming to believe the answer is just “greedily” blatant!
A small part of the SEC Receiver’s document to the District Court stated the following:
Kaleta made similar misrepresentations concerning Masterpiece sculptures purchased with KCM assets. When asked by the Receiver to turn over the four sculptures identified by Kaleta, the Receiver was informed that the sculptures had been moved from the KCM/BizRadio/DFFS offices to Kaleta’s home. Kaleta agreed to return the four sculptures to the KCM/DFFS/BizRadio office for collection. Kaleta assured the Receiver through counsel that there were no other sculptures that remained undisclosed. The Receiver’s repeated requests for confirmation were met with repeated assurances that there were only four sculptures and that they had already been turned over to the Receiver. This was false.
The facts were uncovered during the Receiver’s telephonic collection efforts to note holders. He contacted Masterpiece to demand repayment of it’s $100,000 note to KCM. Masterpiece’s principal referenced a number of other sculptures purchased by KCM but delivered to or picked up by Kaleta. When asked to provide supplemental information, Masterpiece delivered to the Receiver detail regarding sculptures in Kaleta’s possession that had not been disclosed. In response to the Receiver’s subpoena and already confronted with evidence that the Receiver had received from Masterpiece, Kaleta admitted possession of the sculptures and agreed to deliver them to the Receiver.
So Kaleta lied! Caught in the web of his own deceit Kaleta is busted when it comes to credibility in light of an ongoing SEC investigation. NOT GOOD! When the criminal aspects of this take hold – and rest assured they will take hold – the outcome is likely not going to be pretty for Al Kaleta – the man who bragged about getting fellow comrades incarcerated since they crossed him.
But, how does this tie into the whole BizRadio – Daniel Frishberg thing? See the agreement below. Perhaps that might shed some light on the subject:
Reciprocal Trade Agreement
Date: August 2, 2009
The following, when signed by you, Mark Ghiglieri and Masterpiece Investments (COMPANY) and Biz Radio Network, will constitute our reciprocal trade agreement relative to an exchange of radio advertising time on station BizRadio KTEK 1110 AM – Houston, KVCE 1160 AM—Dallas, KTMR 1130AM—San Antonio.
We hereby agree to furnish Company, broadcast time on BizRadio KTEK 1110 AM – Houston, for commercial announcements to advertise fine arts and sculptures.
- Time shall be accorded you in the amount of $100,000.00 computed according to our rate card in effect at the time the commercial announcements are placed on the station. House talent and regular production are included in rate. It is agreed that no agency commission is payable, such commission having been included in the dollar value of the time to be furnished you hereunder.
- Any request for specific talent, announcer or special production in connection with said announcements, shall be paid for, in cash, by you upon receipt of the invoice. Such charges shall not be included in computing the dollar value of the broadcast time furnished by station(s) to you hereunder.
- In exchange, you agree to furnish us with the following merchandise, as sole payment to the Biz Radio Network: The BizRadio Sculptures (TBD) worth $100,000.00.
- BizRadio agrees to reimburse COMPANY, the hard costs on all sculptures that are sold, at an agreed upon price up front, registered by serial number, after each sale, with the net proceeds going to BizRadio.
- You agree to furnish Biz Radio Network with serial numbers to be used for the purpose of accounting and fulfillment records for the aforementioned scrip.
- All announcements hereunder shall be subject to the terms and conditions of Station’s Standard Contract for Local Broadcasting.
- Advertiser will indemnify and hold harmless the Agent and the Station from and against all claims, demands, debts, obligations or charges (including reasonable attorney fees and disbursements) which arise of or result from the broadcast and/ or website advertising schedule. The provisions of this paragraph shall survive the termination or expiration of this agreement.
- Announcements provided for above shall be broadcast run of station (ROS) between start of station broadcast day and end of station broadcast day (Monday-Sunday) and are subject to availability. The Station(s) shall have the right to capture any time periods offered hereunder for any reason whatsoever. Charges will be made only for spots actually broadcast, and for which affidavits of performance showing the exact times are furnished. Schedule must run within one year of date of this agreement unless a prior arrangement is made and agreed to by station.
- This Station does not discriminate in the sale of advertising time and will accept no advertising which is placed with intent to discriminate on the basis of race, gender, or ethnicity. Advertiser hereby certifies that it is not buying broadcast air time under this advertising sales agreement for a discriminatory purpose, including but not limited to decisions not to place advertising on particular stations on the basis of race, gender, national origin or ancestry.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered effective as of the date first written above.
BusinessRadio Network, LP
Doug Roach – General Manager
Account Executive: _________________________________
Jack Warkenthien—VP of Sales
ACCEPTED AND AGREED:
COMMENTS: It’s 2009 and as evidenced by this agreement, again BizRadio agrees to provide (shall we say) “advertising” in exchange for sculptures that somehow end up at Al Kaleta’s residence. The company is barely making payroll and yet the business of the day – advertising for art. IF THIS IS AN EXAMPLE OF BUSINESS ETHICS – well… I throw my hands up…fraud is fraud and it sure seems that the BizRadio folks were more than knee deep in it. Personally, I feel for the investors and hope they are able to get something back. Perhaps their best hope is the actual sale of the station… For now, only time will tell.
As always – YOUR COMMENTS ARE WELCOME!