The Biz 880 a.m. – Miami welcome Dan Frishberg but Beware!

December 1, 2010

That’s right…in the land of sun and fun I’m sure that you can provide a great Miami welcome to one of the newest additions to South Florida business radio – The Money Man himself – Dan Frishberg!  Formally of BizRadio fame in Houston, Dallas and San Antonio – Dan Frishberg – self proclaimed Money Man has now found a new outlet in South Florida at The Biz 880 a.m.

But before the excitement sets in for the new morning drive time sensation, perhaps a few questions should be asked.

Referred to as the Pirate of the Airwaves – an interesting article appeared in the Houston Chronicle by reporter Loren Steffy.  The full article appears here.  For purposes of brevity and full disclosure let’s look at part of Loren’s article which I quote:

The BizRadio Network’s slogan is “the sound of your money growing,” but for about 50 investors, it’s sounding more like their money disappearing.

The AM radio network — which broadcasts investment advice and other business information in Houston, Dallas, San Antonio, Denver and Colorado Springs — received millions raised from investors under false pretenses, according to a lawsuit filed last week by the Securities and Exchange Commission.

The SEC claims that between December 2007 and August of this year, Albert Kaleta and his investment firm, Kaleta Capital Management, sold $10 million in promissory notes, telling investors the money would be loaned to small businesses at 12 percent to 14 percent interest. Instead, the SEC said, it went to the money-losing radio network and an affilated investment advisory firm, Daniel Frishberg Financial Services, also known as DFFS Capital Management.

Kaleta and Dan Frishberg, who appears on BizRadio as “The Money Man,” were among the network’s founders. Kaleta also was part owner and chief compliance officer for DFFS.

To my friends and followers in Miami – that is just the tip of the iceberg.  Dan “The Money Man” is under investigation by the SEC and, if my sources are correct, is likely to lose his license as a potential Registered Investment Adviser.

Interestingly enough, Dan Frishberg, in what appears to be an effort to preserve his income from his RIA – DFFS – sold the asset to Barrington Financial Services before the SEC Receiver Tom Taylor could get his hands on the asset.  Tom’s interest is to protect the defrauded investors and work to recover any assets that could be used to make them whole.  To date, Frishberg seems to have protected his income to the detriment of the defrauded – scammed investors.

Loren Steffy also wrote an interesting piece – Beware of those who say beware of Scams.  Here’s the piece for your to review.  What’s ironic and quite amazing is that Dan Frishberg and his cronies are up to their necks in lawsuits and claims of being scammed and perpetrating frauds, yet, Dan must have a teflon tailor in that he seems to slide right past the claims with no consequence.  Example, he’s now on the air in Miami bringing his radio show and skilled investment advice to a new crowd.

Here are two other links that might shed some light on this new morning radio sensation on The Biz 880 a.m. in Miami:

https://chuckgallagher.wordpress.com/2010/04/18/bizradio-dan-frishberg-several-tentacles-to-a-complex-story-every-choice-has-a-consequence/

https://chuckgallagher.wordpress.com/2010/03/03/dan-frishberg-and-bizradio-slapped-with-18-million-lawsuit-rehan-siddiqi-and-asia-vision-strike-back/

https://chuckgallagher.wordpress.com/2010/03/16/dan-frishberg-david-wallace-anatomy-of-an-investment-scam-laffer-frishberg-wallace-economic-opportunity-fund/

So here are some questions for well informed Miami listeners to consider:

  1. What motivated The Biz 880 a.m. to bring Dan Frishberg to the airwaves of Miami?
  2. Was the management team at The Biz 880 a.m. aware of Dan Frishberg’s past dealings and the allegations of fraud and wrongdoing or the SEC investigation?
  3. If they were aware, did they think that it was worth the exposure – that Dan would bring the ratings – or did they just not care?
  4. If they were not aware, then what do you think The Biz 880 a.m. management will do as they begin to see that their credibility is called into play by allowing someone under investigation by the SEC to potentially lure some unsuspecting person into a situation similar to those who were defrauded in Houston?

But here’s the real question – WHAT DO YOU THINK MIAMI?

Perhaps you should voice your opinion – do you want a person investigated for financial misdeeds by the SEC sharing his trade secrets during your morning drive time?

I’m just asking?  YOUR COMMENTS ARE WELCOME!


David Wallace – Proposed Downtown Master Developer Questioned by The Amarillo Independent

November 16, 2010

As many who have followed this blog know – Dan Frishberg, of failed BizRadio fame, along with Al Kaleta, who had his license as an investment advisor pulled by the SEC, were coupled with David Wallace as a interesting trio – whose clients, in large part, lost millions with respect to Wallace’s BizRadio funding investments from his other investment funds.

Today reporters from The Amarillo Independent called into question a proposed development that David Wallace is pitching to the City of Amarillo.  There article is reprinted below in full.

What’s it all about, Wallace?

By Gina Haschke, Greg Rohloff and George Schwarz
The Amarillo Independent

The principals in the development firm that the Amarillo City Commission is considering as the master developer for downtown revitalization are no strangers to litigation, with one of the firm’s showcase Houston area projects the subject of a foreclosure and lawsuit. And, those same principals, David G. Wallace, and Costa Bajjali, are on the periphery of an ongoing Securities and Exchange Commission fraud investigation.

Last Tuesday, Wallace, co-founder and chief executive officer of Wallace Bajjali Development Partners, L.P., impressed city commissioners and staff with a presentation touting his experience with developments in his hometown of Sugar Land, where he served as mayor until 2008. He also touted his firm’s developments in other cities, including Waco and the Houston area.

But at least one development has soured — the Creekmont Plaza mixed use commercial development in Fort Bend County.

According to a petition filed June 10, 2010, Frost National Bank foreclosed on the Creekmont Plaza Development in Missouri City.

The two men took out a loan of more than $1.9 million with Frost in August 2008 as the general and limited partners in Creekmont Plaza Partners, L.P. and personally guaranteed the loan.

“Despite demand for payment of the balance due, Mr. Wallace and Mr. Bajjali have failed to pay the balance due,” the petition alleges.

The petition states that the property was sold in a foreclosure sale in April at the Fort Bend County Courthouse. But the sale, which brought $1.1 million, was almost $820,000 short of the loan amount. At that time, taxes on the property were also overdue.

“The delinquent taxes for the years 2007 through 2009 were in the amount of $157,494 if paid in March of 2010, plus the 2010 taxes and the Defendants are jointly and severally liable to Plaintiff for the taxes plus interest thereon as allowed by law,” the petition alleges.

The petition asks for payment of the shortfall of the sale, interest, court costs and lawyer’s fees.

All the defendants have entered a general denial and, as of Monday, the case is set for trial in March 2011, according to Harris County District Court records.

A search of additional Harris County District Court records shows Wallace involved in several other lawsuits, including litigation in 1995 with Mark Thatcher, son of former British Prime Minister Margaret Thatcher and Wallace’s former business partner in several United States-based businesses.

How much Downtown Amarillo, Inc. is aware of all the court actions isn’t clear.

Melissa Dailey, executive director of Downtown Amarillo, Inc., said she had done “quite a bit” of background research on the firm. She said she had not looked into the Thatcher alliance in detail, but added, “I’m more interested in his development activities here in the United States.”

When asked about a Securities and Exchange Commission investigation, she said she was “aware of the situation.”

It has little negative reflection on Wallace Bajjali, Dailey said, adding, “In fact, it’s a positive.”

Daily wouldn’t discuss the matter further, saying instead Wallace would talk about it when he was in Amarillo in the next week or two “because he knows the details much more intimately than I do.”

Several calls and repeated messages left for Wallace for comment were not returned.

The SEC investigation focuses on Kaleta Capital Management, or KCM, and a Houston business known as BizRadio, and may yet reach Wallace and Bajjali or some of their business entities.

The year-old litigation — the SEC filed suit Nov. 13, 2009,— names Albert Kaleta and KCM as defendants in a claim that they defrauded investors of $10 million.

According to a July 2010 update on the receivership website, “Based upon the recent inclusion of BizRadio in the Receivership Estate, negotiations have now been commenced with respect to potential liability of the Wallace Bajjali entities and their principals with respect to investments by members of the public in BizRadio directly, and in other related investment vehicles. To date no agreements have been reached with respect to these matters.”

On Monday, Thomas L. Taylor III, the Houston attorney who is overseeing the SEC-ordered receivership of KCM, said neither Wallace nor Bajjali or their entities are yet named in any of the court papers but he would also neither confirm nor deny that they could be pulled into the federal investigation at a later time.

In negotiations with Taylor, Wallace has paid back $92,348 and Bajjali has paid back $45,550 to date, according to the publicly available information.

Taylor said negotiations are ongoing about further repayments by Wallace and Bajjali.

Nevertheless, DAI’s Dailey said Monday, “We have not come across anything negative. When we looked into it in detail, it all was positive.”

I find it interesting that a comment was made that “We have not come across anything negative.  When we looked into it in detail, it all was positive.”  Really?  Just gotta ask these questions:

  • If Frost National Bank foreclosed on the Creekmont Plaza Development in Missouri City and Mr. Wallace and Mr. Bajjali have failed to pay the balance due, how can that be positive?
  • If over 60% of the funds invested in the Laffer, Frishberg, Wallace fund were funneled into BizRadio which David Wallace has stated was a failed business, how can he be trusted to protect the assets of his investors (or the City of Amarillo’s assets) when due diligence would clearly be called into question?
  • Since David Wallace and Wallace Bajjali were integral in the financial operations of BizRadio and Al Kaleta has been busted by the SEC and Daniel Frishberg is being investigated – how can the City Fathers assume that the fingers of justice might move just a bit further to pull in David Wallace?

Wallace Bajjali might do a great job for the City of Amarillo.  However, to say that after looking into issues all looks good is like your finger in a pot of boiling water and then saying its cool.  Where there is smoke there is usually fire.

I’m just saying…

YOUR COMMENTS ARE WELCOME!


Ethics require Transparency – Dan Frishberg is caugh up in the Illusion of the Scam

September 21, 2010

They say it takes one to know one!  How many times do I wish that weren’t true, but in the case of Dan Frishberg and the BizRadio saga, I am uniquely qualified to report as I’ve (regrettably) been in his shoes and dealt with the consequence – federal prison.  Just last week, in doing a program for the US Navy, I was asked: “What did you learn in prison?”

Answer: “I learned three things: (1) every choice has a consequence! (2) often we get caught up in our own illusions and fail to see or acknowledge the truth; and (3) Success is measured by the impact we have on others, not by the stuff we acquire over our lifetimes.”

I freely acknowledge that I am not proud of my past choices from 1986 – 1989, but I have been honest in what I did, why and the lessons that were learned as a result.

So…where does this take us in the case of Dan Frishberg and BizRadio?

I was told by several folks that Dan has become frustrated at the publicity that he’s received.  When either BizRadio or Dan Frishberg is searched on the internet, articles (some mine) appear which shine a light of truth on what he, Al Kaleta and David Wallace have done to unsuspecting investors through their BizRadio scam. (Perhaps it didn’t start as a scam, but certainly became one by all accounts).

So what did Dan do?  Instead of looking at the truth of the matter, he’s continued his journey into the fog of illusion and enlisted the help of other bloggers to blog positively about him and the work that he does.  In other words, he’s trying to fill the media outlets with more illusion so that he counteracts his devious actions – currently being investigated by authorities.

One new blog by Mike Wazowski is a feeble attempt to shine a positive light on Dan.  Mike states the following regarding Dan Frishberg’s plight:

I have a feeling Dan “The Money Man” Frishberg knows just what Ray Donovan meant, even though his ordeal has been played out on a smaller field. Dan’s is a familiar voice on the radio and TV, where he has been a frequent commentator of Fox Business and CNBC, among others. If you want to see what caught my attention, take a look at this YOUTUBE VIDEO of The Money Man’s television appearances from 2008 and 2009.

Unfortunately for Frishberg, fame came with an opening for shady operators including a con artist who named himself CEO of Dan Frishberg’s radio enterprises and proceeded to try to sell the home station of his radio show, “The Money Man Report”. Also finding his way out of the woodwork is a blogging Lone Ranger who has spent more than a year on his lonely crusade against Frishberg’s reputation.

Let’s see – to be clear Dan does have commentary on YouTube, but then again anyone can have YouTube video.  What I notice is the total absence of Dan Frishberg as a guest of any legitimate media outlet since he’s come under the scrutiny and investigation of the SEC and his beloved radio station – BizRadio is effectively up for sale under the direction of an SEC Receiver.  Has Fox or CNBC had him on in 2010?  Sure would be interested to know if they did or perhaps they’re working on a new segment related to Dan on say – American Greed?  Just asking?

And, let me get this right – now Ron Crider is being implicated as a self appointed CEO “con artist” – hum…somehow I don’t think the fact bear out that claim.  But then again, I’m not yet sure that Mike is holding true to the title of his blog – Truth in Blogging.

Ah…but there’s more.  Mike now wishes to take a swipe at me.  Trust me, I’ve had many swipes, but this one is a bit comical.  Here goes Mikes comments:

Apparently a paid propagandist, he calls himself a “home grown journalist” and claims to be an Ethics Consultant. But his “reports” are nothing more than innuendo backed up by vague sources like “numerous phone calls and emails”, violating the first rule of the Society of Professional Journalists’ Code of Ethics. Of course, since he’s bucking the Mainstream Media by, alone among all the business reporters and editors in America, portraying Dan Frishberg as a villain and not a brilliant financial strategist, he may think he is not bound by “professional” ethics.

This deceptive blogger says he is a CPA, yet he is apparently also a convicted felon. I don’t understand how those go together, but in any event, he pretends not to understand the difference between capital and equity when he is straining to understand how an investment fund with more than $50 million in real estate could have also invested in BizRadio.

So for TRUTH IN BLOGGING – let’s set the record straight:

  1. I am not a paid propagandist – NO ONE PAYS ME TO WRITE WHAT I WRITE.  As you might notice, my blog is free and not used as a site for advertisers or sponsors.  So – Mike you’re wrong here.
  2. He calls himself a “home grown journalist” and claims to be an Ethics Consultant.  Well…I suppose I am a bit of a HOME GROWN JOURNALIST as are most bloggers, but to clarify, I also have been published in numerous national magazines, featured on numerous talk shows including but not limited to CNN, CBS and NPR radio as well as TV appearances.  AND I AM A PAID ETHICS AND FRAUD PREVENTION CONSULTANT.  Again, Mike you might wish to check your facts before you assume that I am not what I say or appear.
  3. His “reports” are nothing more than innuendo backed up by vague sources like “numerous phone calls and emails.” VAGUE SOURCES – hum, Judges orders, SEC Receiver reports, Written Documents and interviews by those who have been victimized by Dan Frishberg.  Wow…I guess those are insignificant in comparison to what Dan Frishberg says is true (ah…the fog of illusion).  Hum…I guess we’d never have had Watergate reported by Woodward and Bernstein if we could not report from “vague sources”.
  4. This deceptive blogger says he is a CPA, yet he is apparently also a convicted felon. – Mike you really miss the boat “Big Kid”…as you are apparently incapable of doing simple research?  I WAS A CPA – created a PONZI SCHEME and SERVED TIME IN FEDERAL PRISON.  Wow…there’s no NEWS HERE!  You report as if you’ve found something.  Sorry, but you didn’t.  Rather all you’ve done is show that I am exactly who I say I am – I am transparent.  Clearly, I’m not the one caught in the fog of ILLUSION.

So…to those who follow my reporting on Dan Frishberg, David Wallace, Al Kaleta and BizRadio … I will continue to do so and appreciate all the help I’ve been given along the way.  There’s an old Elvis song that says, “what you do in the dark, will be brought to the light” – and in Dan’s case that is true.

TRUTH:  “Keeping it real by bring you the truth!  Mike Wazowski” – Mike may be a real person (I honestly don’t know), but what is true is that it appears that Mike is no more than a mouthpiece for Dan Frishberg – spouting reports that are designed to counteract the light of truth that the Houston Chronicle, I and others have been shinning on Dan.   Nice try Mike…but in the future, call me and let’s discuss the truth…my number is published!


Daniel Frishberg and the Importance of Money Management – Irony in Deception!

August 8, 2010

A day or so ago a scammed investor lamenting his/her plight said that the word is Dan Frishberg is growing tired of the negative publicity he’s receiving on the web.  It has become worry some that the choices that he’s made are producing consequences that tarnish his reputation.

My immediate response is “Every choice has a consequence!”  In fact, I shared that if Dan had taken a different path early on most of what he’s experiencing today would be quite different.  For example – had Dan shared with his followers that he’d made mistakes in his vision of BizRadio, that BizRadio was in financial trouble and that he would open the revenue source from his RIA to provide a steady stream of repayment to those who were defrauded or scammed in one way or another, I suspect the outcome would have been much more positive.

Alas…Dan “The Money Man” did not.  Rather he is desperately trying to continue to put out the message that he is “The Money Man” through a series of NEW blogs touting his expertise.  There is IRONY here.  I call it the IRONY of DECEPTION and the likely outcome is that Dan is digging the hole deeper for his ultimate demise.

I am not going to link my blog to his – as that has the effect of drawing attention to his work.  I will, however, share part of his blog comments and, after some comments, ask YOU for yours.  Perhaps I am off base and I’m man enough to accept that – so if your comments reflect a different opinion of Dan and his choices – PLEASE SHARE.

DAN STATES THE FOLLOWING:

Today I’ll share with you two general systems of money management that will help you how complex you want to take your strategy for managing the money even if you do not all. Good management of working capital is necessary to reach a compromise between liquidity and profitability. It is widely believed that if you can not manage your life, you can not begin to manage your money.

Let me repeat his comment: “It is widely believed that if you can not manage your life, you can not begin to manage your money.”  Time after time from numerous emails and phone calls, I have been told that Dan was challenged in managing his life – at least his financial life.  It is not for me to judge, but one might easily come to the conclusion that money management is an issue for Dan considering that investors money funded BizRadio and BizRadio was the “loss leader” (Dan’s comments not mine) that propelled his RIA and earned him personally a reported $700,000 per quarter.  Financial success on Dan’s part or the trappings of a successful scam – using other people’s money to accomplish his personal objective leaving other people victims?

Dan further states:  “You must understand that leveraging your money with good management can turn a relatively low investment business situation / in a dynamic Moneymaker. Wise money management is essential for a balanced and happy life. gives practical advice for managing money among others for gambling and trading of the shares. money management can mean acquiring more control over expenditure and revenue, both personal and business perspective.”

Dan seemed to practice what he preaches here.  Sure enough he turned a low investment into a good business situation (for himself) at least for a time.  Where did the BizRadio money come from?  I suspect that investors (victims) could now come out of the woodwork and share their stories of how they were suckered into believing that Dan “The Money Man” was wise and all knowing – touting the vision and ILLUSION that BizRadio was a good investment for them.  Reality Check:  BizRadio was only good for Dan.

Financial stress resulting from low skills of money management may affect our ability to make good decisions, harm our relations on the physical and mental health, and ultimately to function well in life. Indeed, deficient money management is one of the main causes of bankruptcy among unseasoned traders. Management of financial assets is an effective way to manage financial assets, one that may take place in various forms. Management services for financial assets generally provide include but not limited to, Control services, credit cards, debit cards, margin loans, automatic transfers from one account to another, and same brokerage services.

LET ME ASK A QUESTION:  How many people in the Houston – Dallas markets are suffering (I mean truly suffering) financial stress due to the representations of Al Kaleta and Daniel Frishberg?  Both are shameful representatives of the financial community.  Dan, through his actions, has caused stress to both physical and mental health of many who have lost their life savings, believing that Dan Frishberg lived up to his self proclaimed status as “The Money Man.”  Now, Dan is desperately trying to save his reputation.  What Dan fails to realize is that his actions destroyed his reputation.  Dan is effectively nothing more than a con man who hasn’t yet realized that feeding his ego off of other people’s money is costing him everything.

The sad part is this could have been different.  But then the same could be said for Bernie Madoff.  Both Dan Frishberg and Bernie Maddoff have two things in common: (1) they are both intelligent and (2) they are both crooks.  The only difference – Bernie is in prison.  Dan hasn’t been charged.  YET…

YOUR COMMENTS ARE WELCOME.


BizRadio, Daniel Frishberg and Al Kaleta – the SEC saga continues with Receiver comments…

July 28, 2010

On July 22, 2010 the SEC Receiver posted the following update on KCM Receiver web site.  From what I’ve been told many who have been following this story either haven’t read the posting or are not connected to the fact that such a site exists… so the posting is reprinted below in it’s entirety.  Likewise, the web site url is show here – http://kcmreceivership.com/index.html

July 22, 2010

At the inception of the receivership, demands were made for repayment of all outstanding loans made by KCM to borrowers from proceeds of KCM’s note offerings to members of the public. To date, certain of the notes have been repaid in the following amounts:

Daniel Frishberg (personal)  $122,069.00
David Wallace (personal)  $ 92,348.00
Costa Bajjali (personal)  $ 45,550.00

In a series of poorly documented transactions, $300,000 in KCM funds was transferred to Masterpiece Investments in the form of a loan to Masterpiece, payment for a number of Masterpiece sculptures and payment for shares of common stock in Masterpiece. In settlement, Masterpiece has agreed to repay KCM the amount of $100,000 payable in installments over a six-month period of which, to date, $20,000 has been collected. In addition, as part of the settlement with Masterpiece, the shares of Masterpiece stock were cancelled and Masterpiece has agreed to re-sell the ten pieces of Masterpiece sculptures within the possession of the Receivership Estate in its gallery in Naples, Florida. Masterpiece will market those sculptures at no charge to the Estate and all proceeds from sale of the sculptures will be paid into the Receivership Estate. To date, no sales have been concluded.

Protechnik Inc. and its principal, Brian De Armas, have declined to make payment on their outstanding indebtedness to KCM in the amount of $160,937.50. Accordingly, on April 13, 2010 the Receiver initiated a civil action in the United States District Court (Thomas L. Taylor III, solely in his capacity as court-appointed Receiver for Kaleta Capital Management, Inc. v. Protechnik, Inc. and Brian De Armas, No. 4:10-cv-1189) against them. The Receiver will seek payment in full of the principal, along with interest, costs of suit and attorneys fees. Protechnik has filed an Answer, and the lawsuit has been consolidated with the main action before Judge Nancy Atlas.

Following demand for payment of all indebtedness to KCM, extensive settlement negotiations were conducted between the Receiver and Daniel Frishberg Financial Services, Inc. (“DFFS”) and Businessradio Network LP and affiliates (“BizRadio”). Loans to those entities represent the majority of the funds which were loaned from proceeds of the KCM note offerings. Negotiations did not prove fruitful with respect to those entities or their principals (other than as noted above). Accordingly on May 4, 2010 the Receiver moved the Court to include the DFFS and the BizRadio entities in the Receivership Estate. The Motion to extend the Receivership was based upon extensive commingling and conflation of KCM proceeds and assets with those entities. Following discovery and an initial hearing before the Court, the parties entered into an agreement pursuant to which those entities were voluntarily placed within the Receivership. The US District Court granted the Motion on Jun 17, 2010 and accordingly those entities are now within the Receivership Estate.

Extensive negotiations have also been conducted between the Receiver and Wallace Bajjali affiliated entities with respect to borrowings from KCM by those entities and their principals. To date, repayment arrangements have not been successfully concluded other than as noted above with respect to personal notes of Bajjali and Wallace. The indebtedness of the Wallace Bajjali entities to KCM, however, has been acknowledged albeit with no agreement concluded as to a repayment schedule.

Based upon the recent inclusion of BizRadio in the Receivership Estate, negotiations have now been commenced with respect to potential liability of the Wallace Bajjali entities and their principals with respect to investments by members of the public in BizRadio directly, and in other related investment vehicles. To date no agreements have been reached with respect to these matters.

Prior to the expansion of the Receivership to include the BizRadio entities, BizRadio had entered into an agreement with respect to the sale of its KTEK radio station license to Salem Communications Corporation. The Receiver is engaged in ongoing discussions with Salem concerning its purchase of the radio station under the changed circumstances implicated by the Receivership. Also prior to the inclusion of BizRadio in the Receivership Estate, litigation had been commenced by another potential purchaser of the station. In that litigation the Plaintiff asserted that it held the right to acquire the station in a prior transaction — which assertion was contested by BizRadio management. That litigation, pending in Harris County District Court is stayed as to BizRadio because of the present Receivership. The Receiver has also been approached by that potential purchaser with respect to an offer to purchase the radio station license.

Several BizRadio investors have inquired with respect to the status of 2009 tax information. The Receiver is attempting to ascertain the status of tax information processing but of this date we are unable to project when information will be processed and made available

What will investors, creditor and other get when the Receiver is finished?  That’s the $64,000 question or multi-million dollar question as the case may be.  While I have no inside track on the outcome, it seems clear that based on the convoluted quagmire of a tangled financial mess Frishberg and Kaleta made…it seems unlikely that substantial losses will be averted.  In other words…I’m thinking that if you invested, loaned, etc. you won’t get much money back.

I’m told that the economic downturn has had a major negative impact on David Wallace’s investments and, of course, we know that BizRadio is broke.  The only hope for a reasonable return is that Salem, Siddiqi or someone else will step up and pay a pretty penny for that small station 1110 a.m. and that the Receiver will be successful in getting his hands on the income generated from DFFS or Dan Frishberg’s RIA.  My guess, however, is that the investors have taken there money elsewhere – I would.

Hopefully we will hear soon about what position the SEC will take toward Frishberg.  I don’t think he will walk away with just a hand slap.  After all he used the media (radio) to promote his fraud and my guess is – like the folks I reported on just yesterday – a prison sentence might be the most just outcome.  Well…see.

YOUR COMMENTS ARE WELCOME!


Trevor Cook and Pat Kiley – Using Radio to promote the Scam – Does this remind you of BizRadio, Daniel Frishberg and Al Kaleta?

July 27, 2010

There are three component parts to a well run Ponzi scheme and in every case the victims fall prey and into the PIT.   PROMISE, ILLUSION and TRUST!

Over the past several months I’ve been reporting on BizRadio out of Houston and the scheme or scam (as I and many others see it) run, in part, by Daniel Frishberg and Al Kaleta.  Then just yesterday I clicked on a lengthy new report about another massive Ponzi scheme (makes BizRadio look like chump change) effected by Trevor Cook (who entered into a plea agreement) and Pat Kiley (Radio Host) who is reportedly the target of a criminal investigation.

The report was fascinating in that it – yet once again – clearly showed the three components of how victims become victimized.  First, before I explain – here’s the link to the CNN Money report.

http://money.cnn.com/video/news/2010/07/15/cook_kiley_long_pkg.cnnmoney/

So how did this mess come to be?  Three things:  PROMISE, ILLUSION and TRUST!

Step One:  Cook made the promise that this was a risk free investment.  As is often said, he (Cook) had a fool proof system.  Folks there is NO FOOL PROOF SYSTEM.

Step Two:  Cook created what looked (0perative word “LOOKED”) to be a high tech system that supported his claims.  He created the ILLUSION.  And, as part of that, he had (what appears to be) in his back pocket – Pat Kiley (Religious Radio Guru) whose mouth supported the Illusion that this was all real.  After all, it wasn’t just Cook who made his claim – he had a (my term here) co-conspirator to help with the Illusion.  Now whether Kiley was “in on the deal” or just too dumb to do due diligence on what he was promoting on the radio is for the legal system to decide, but either way – Kiley was instrumental in creating the Illusion.

Step Three:  Kiley’s brand – via his nationally syndicated radio show – created a large part of the TRUST needed to spread the message and seal the Ponzi scheme deal.  Not that this all fell on Kiley’s shoulders, Cook, too, played a large part in the Trust component by creating false statements giving investors an inaccurate view of their investment returns.

PROMISE, ILLUSION and TRUST.  These three are the foundations of how fraud becomes and creates victims.

See the SEC News Release on Trevor Cook – http://www.sec.gov/news/press/2010/2010-12.htm

See also SEC News on Pat Kiley – http://www.sec.gov/litigation/litreleases/2009/lr21313.htm

So…how does this relate to the story I’ve been following with BizRadio?  Seems that there are interesting correlations.  First, Al Kaleta was the one who seemingly was the point man for the money.  Perhaps it was best to say that Al Kaleta was the “promise keeper.”  Daniel Frishberg was the “radio personality” who had the name recognition to support the Illusion and create Trust.  Together, Frishberg and Kaleta, seemingly convinced many investors to (like in the case of Trevor Cook and Pat Kiley) put millions into venture(s) that turned out to be no more than a massive illusion designed to promote the personal gains of Daniel Frishberg and Al Kaleta.

Where from here?  Well, in the case of Cook – he’s entered into a plea deal for no more than 25 years in prison in exchange for his help in finding the money.  Good luck with that, as it appears that much of it has disappeared – gone as quickly as his illusion dissipated.  Kiley – well, that’s a function of where the criminal investigation goes.  Did he know and conspire or was he just that stupid?

In the other case of Al Kaleta and Daniel Frishberg – that is yet to be decided – other than an SEC Receiver has been appointed to take possession of what funds can be found so that investors can be made whole as much as possible.  More to come!

Meanwhile…YOUR COMMENTS ARE WELCOME!


BizRadio or Business 1110 (whatever it’s now know as) set to be sold…

July 22, 2010

It’s not new – most all who were following the story of Dan Frishberg “The Money Man” and BizRadio knew that the station was to be sold… the question however is now – TO WHOM?

My most recent blog entry on BizRadio centered around a recently filed lawsuit against Salem Communications, Daniel Frishberg, Elisea Frishberg and a host of other entities and folks related to the contract for purchase between Salem Communications and Daniel Frishberg for BizRadio.  The entry can be see here:  https://chuckgallagher.wordpress.com/2010/07/13/bizradio-to-salem-communications-business-1110-frishbergs-fraud-follies/

Now…I see that application has been filed with the FCC for the transfer of the station from BizRadio Houston Licensee, LLC to Thomas Taylor SEC Receiver.  The application can be seen here:  https://licensing.fcc.gov/cgi-bin/ws.exe/prod/cdbs/forms/prod/cdbsmenu.hts?context=25&appn=101390286&formid=316&fac_num=10827

THE IMPLICATION:

As previously reported, the assets of BizRadio are under the direction and control of Mr. Taylor (SEC Receiver) and as such this filing is appropriate as it clarifies the transfer of asset under the courts direction to the person authorized to act as it’s agent and effect the transfer of the station.  Perhaps simply stated – this action is a formality.

THE OUTCOME:

Well…eventually the station will be sold.  As many of you know, Salem made the following offer to Daniel Frishberg and which Daniel Frishberg accepted.

Salem Offer…

(1) Payment of $800,000 to Frishberg (this payment would be made at closing and that has not taken place – hence Daniel Frishberg has received no funds from this offer to date – to the best of my knowledge)

(2) Forgiveness of $1,260,000 of debt to Salem from their initial sale to Frishberg (in other words he had not yet paid them for his purchase in the first place).  Again, it appears that something blocks Salem from “foreclosing” and just taking the station back.  What?  I don’t know, but I keep asking…

(3) An agreement of $1,640,000 in air time for Frishberg to keep his program on the air.   Through this legal mess Dan has continued to broadcast his show on this station, so it could easily be assumed that he is drawing down on this free air time according to the original contract.

The BIG QUESTION is who will own the station and for what price?  On March 2, 2010 Rehan Siddiqi made an offer to exercise his option to purchase for $3.5 million cash.  Several days later Salem executed the agreement with Dan Frishberg to purchase the station for much less in cash and other terms listed above.  Then enter the Courts with Tom Taylor as Receiver whose role is to protect those who have “invested” or have a vested interest in BizRadio.  Mr. Taylor’s responsibility is liquidate the assets and provide the best outcome for those who have been harmed.

So…Mr. Taylor could (with Court approval):  (1) accept the Salem offer as is; (2) renegotiate the offer with Salem (perhaps by increasing the cash and removing the “free airtime”); (3) see if the Siddiqi offer is still valid which provides substantially more cash; or (4) open it to public bid and let the highest bidder win.  Either way…I suspect that the folks whom Mr. Taylor is charged with protecting will find that the sale will provide a greater benefit than the original agreement between Salem and Frishberg.

The only fly in the ointment – so to speak – is that the broadcast towers owned by the station (BizRadio) are physically located on real estate owned by Salem.  That – single fact – complicats the value to an outside buyer as Salem could demand an unreasonable rent requirement for the use of the land…  Bummer!

Likewise, the Siddiqi lawsuit against Frishberg and (more importantly) Salem claims tortuous interference which does not go away with the sale of the station by the SEC Receiver.  Perhaps, (and I’m not an attorney) but should Siddiqi reactivate his offer and that offer be accepted, it would minimize the damages claimed?

A QUESTION OF COMPATABILITY:

What I really don’t get is why Salem would want this (relatively insignificant) station?  Salem is known as a Christian Broadcaster and an organization of high moral standards…so why would they want to buy this back and get in bed with Daniel Frishberg.  By his actions, it would appear that Frishberg is almost the anthesis of what Salem stands for.   So free airtime as part of the purchase offer?  Go figure?

THE WEB OF FUNDS:

Now not being a radio guy…you follow me on this (an I’m REALLY open to comments and help here)…

  1. BizRadio still owns the station (seemingly currently under purchase contract with Salem)
  2. BizRadio or Business 1110 is still on the air and currently selling airtime to other programs (other than Dan Frishberg “The Money Man”)
  3. QUESTION: Who is getting the money for the airtime: (1) The SEC Receiver; (2) Salem Communications; or (3) Daniel Frishberg?
  4. QUESTION: Is Salem leasing the station from Daniel Frishberg currently?  If so for how much and who is receiving those funds? I would appear until the transfer to the SEC Receiver that Daniel Frishberg (BizRadio Houston Licensee, LLC) was – is still the owner.  In fact, the transfer documents would validate my assumption.
  5. Industry sources tell me that the station should be worth (leased air time) approximately $50,000 per month…so since approximately 5 months have passed who got the $250,000?
  6. Again, I am told that the weekend airtime was brokered for some agreed upon price – who is receiving the broker revenue?

WHERE FROM HERE?

Steve Miller’s song says – “Time keeps on ticking…ticking…ticking into the future” well in this case it is a bit of a ticking time bomb that I sense is soon set to explode!  Outcome prediction: (1) the station will be sold (and likely not for the original Salem agreement unless that’s the only offer on the table); (2) Daniel Frishberg will lose his license as part of an SEC finding and civil action; and (3) eventually both Al Kaleta and Daniel Frishberg will find themselves the subject of criminal indictment (although I don’t think that will be in 2010).  But…time will tell…!

YOUR COMMENTS WELCOME!


BizRadio to Salem Communications Business 1110 – Frishberg’s Fraud Follies?

July 13, 2010

Have you even awakened in the morning with breath so nasty that you had to brush your teeth before talking to anyone?  I mean “nasty breath” that would turn your dog against you?  Well…if I were a betting man, I would say that Salem Communications (purchaser of BizRadio 1110 am from Dan Frishberg) either has stinky breath today or is smelling it from their “good buddy” Dan Frishberg.

This story just keeps getting better.  I will say (for those who think I am jubilant about what’s happened to Dan) – I’m not!  In fact, frankly for Dan and his family it is sad.  Sad that Dan is so caught up in himself that he is digging a hole so deep that few could ever recover.  But…let’s look at what has happened so that those of you who are following can judge for yourself – whether you think Dan Frishberg is more focused on his well being than being ethical about his transactions and protecting the many who invested their savings only to find it lost.

UPDATE:

On July 12, 2010 Rehan Siddiqi and Asia Vision, Inc. brought suit against Dan Frishberg, Al Kaleta, Elisea Frishberg, Salem Communications, BizRadio and a host of related companies and individuals for tortuous interference, fraud, conspiracy, perjury, theft and a host of other claims. Now…I am not judge nor do I have any connection with the outcome of this claim by Siddiqi.  However, the case illuminates and illustrates patterns of behavior that I would judge to be unethical and probably fraudulent.  So…let’s look at what we do know and you be the judge.

BACKGROUND:

Sure seems like a long time ago, but in late 2009 Rehan Siddiqi (Asia Vision, Inc.) entered into an agreement with Dan Frishberg to lease – purchase – 1110 AM.  Siddiqi paid Frishberg a deposit and the lease in advance for six months – the sum – $180,000.  The agreement provided that Siddiqi would have the option to purchase the station for $3.5 million.  The agreement can be clicked on here.  Frishberg – Siddiqi – Biz Radio Purchase Agreement

No only was there the purchase agreement but the simple terms were listed on the agreement at the end of December 2009.  See here: BizRadio lease purchase agreement

Now why would Frishberg agree to sell his station to Siddiqi?  On the surface it seems clear: (1) Frishberg needed the money!; (2) Kaleta, Frishberg’s financial source of funding (from now some real unhappy investors) was busted by the SEC and Dan was broke; (3) if Dan could move to a more powerful station for just the cost of monthly lease…he might survive; and (4) Siddiqi was willing to provide a quick influx of cash that Frishberg desperately needed.  Understand now?

The announcement of this transaction is reflected here in an email announcement.  BizRadio Station Change Talk about spin…

Then it all falls to pieces.  Apparently Frishberg – seemingly happy with his new station – can’t pay or provide a letter of credit to continue and thereby is facing the loss of his show – the same show that is a feeder to his investment business – the business that feeds he and his family.  So what does he do?  What any self-respecting unethical person would do (sorry, but at times I have to share my feelings) – he screwed Rehan Siddiqi.  He kept Rehan’s money and kicked him off the station that he, just a month before, leased with an agreement to purchase.  See statement from Ron Crider.  Ron Crider Statement

Outcome…Rehan Siddiqi brings suit against Daniel Frishberg and BizRadio for $18 million and YES this is old news but it sets the stage for the rest of the story…

NEXT STEPS:

On March 2, 2010 Rehan Siddiqi filed notice with agent for Salem Broadcasting of his intention to exercise his option under the lease purchase agreement.  His exercise would have Siddiqi paying $3.5 million for 1110 AM.  The proceeds would have been a cash sale and represented a substantial inflow of cash to BizRadio and their respective investors – cash that would have been much needed to those who have lost literally millions.  See offer here.  Siddiqi Purchase Exercise

But according to the lawsuit there are several interesting twists!

INTERESTING TWIST ONE:

BusinessRadio Houston, LLC forfeited its charter to exist, operate and do business as of October 30, 2009.  WHAT?  That’s right…Dan Frishberg continued to operate and do business as if he had the protection of his LLC, but it appears that it lapsed and he was flying blind or “unprotected” if you will.  The BIG QUESTION this raises is – is Dan Frishberg now personally liable for the actions of BusinessRadio Houston, LLC – an entity that seemingly conducted business through at least part of March 2010?

Somehow I see more lawsuits being filed and perhaps the concept of “piercing the corporate veil” is effectively won.  This will be interesting to watch.

INTERESTING TWIST TWO:

Keep in mind the date of the Siddiqi offering – March 2, 2010.

Frishberg (perhaps realizing that his old corporation was nonexistent) filed to do business as BusinessRadio Houston Licensee, LLC on March 4, 2010.

O.K. so Siddiqi makes the offer on March 2nd and two days later Frishberg forms a new company in order to sell what his old company (remember the one that ceased to exist back in October 2009) could not sell.  Hum?

Now…I’m curious as to legally what happens to the license if the entity that holds it ceases to exist?  Who owns the station?  Who has access to the assets?  Who is liable for the actions of the station when the corporate enterprise or LLC fails or dies?  This is getting more twisted as each day passes.

THE SALE:

Oh my…now it gets interesting.  It is fairly common knowledge among those connected with Dan Frishberg and BizRadio that Salem and Dan were discussing the transfer of the station back to Salem back in February of 2010 even though Siddiqi had a purchase option agreement signed by Frishberg at the end of 2009.  So on March 5th – three days after Siddiqi exercised his purchase option for $3.5 million the station was sold FOR SUBSTANTIALLY LESS THAN THAT from Frishberg back to Salem.  Here’s the purchase agreement.  Salem Purchase Agreement

Terms:

(1) Payment of $800,000 to Frishberg

(2) Forgiveness of $1,260,000 of debt to Salem from their initial sale to Frishberg (in other words he had not yet paid them for his purchase in the first place).  Now why they didn’t foreclose and take it back I still, to this day, don’t know.  And…forgiveness of debt creates a taxable event, so I wonder what position the IRS will take on this or if Dan will ignore this and expose himself to tax fraud?

(3) An agreement of $1,640,000 in air time for Frishberg to keep his program on the air – again it would appear that this is a taxable transaction, but that’s Dan’s issue?

A MATTER OF ETHICS:

Let me get this straight…Dan Frishberg who said BizRadio was a loss leader: (a) sold his RIA or DFFS to Bill Heath (ostensibly to protect the quarterly income it generated) instead of having that income inure to the benefit of the BizRadio shareholders; (b) turned down a $3.5 million offer (again that would have benefited those who trusted Dan by investing in BizRadio); and (c) he structured a deal that clearly benefited him – so he could continue his show and remain the master of illusion.  Now is that in any way ETHICAL?

THE REST OF THE STORY (Thus Far):

Well…it appears that the SEC is taking a different look at this whole agreement between Salem and Frishberg (perhaps as a result of this new suit and the information it uncovers).  It looks like Siddiqi wasn’t just filing a lawsuit for the joy of creating a legal nightmare.  Rather, Siddiqi seems to have a legitimate claim.  Several things seem for sure:

  1. The SEC (according to my sources) seem to feel that Frishberg might have fraudulently conveyed the station for purposes of hiding assets and personal gain.  Keep in mind the SEC has no criminal authority, but the use of “fraudulently” might infer that others who do have criminal authority are waiting in the wings for Dan “The Money Man”.
  2. The SEC Receiver would appear to be interested in seeing if Siddiqi (or perhaps other parties) are interested in the station for a sum greater than $800,000 which (obviously) would give the SEC a greater pool of funds from which some form of “restitution” shall we say can be made.
  3. Salem is a substantial entity and while BizRadio is defunct – Salem’s pockets are deep – and one might assume that if Salem somehow “conspired” as the lawsuit alleges the outcome might be beneficial for those who invested in BizRadio.
  4. Likewise, if it is deemed that Salem “tortuously” interfered with Siddiqi’s agreement with Frishberg – again the pocket book might be open either to damages or a settlement – either of which changes the landscape of what seemed somewhat hopeless to date.

WHERE FROM HERE?

Dandy question!  The twist and turns seem, in the matter of BizRadio, to always bring a new challenge and varied and different outcomes.  But, if I were a betting man (and I am not) I would suggest that the following would be logical outcomes:

  1. The SEC Receiver will make dog gone sure that he gets his money for the defrauded shareholders of BizRadio…so the station will be sold for more than $800,000 (I think) and the SEC Receiver will get those funds.
  2. Salem Communication will clearly want to make this go away.  The publicity (and I understand that several media outlets are considering stories) will do no good for Salem.  In fact, I have had multiple inquiries asking why Salem wanted to get into bed with Frishberg considering all the baggage he brings with him?  Damn good question!
  3. Siddiqi will either end up with the station for some amount (likely less than $3.5 million) as it’s value and brand has diminished with all the negative publicity surrounding it or he will end up with a settlement for Frishberg and Salem’s interactions in deference to Siddiqi’s agreement.
  4. Frishberg continues to dig his hole deeper and, yet once again, has shown the SEC that he cares little for those who invested in his vision and cares mostly for Dan Frishberg.  The outcome – I predicted and continue to hold to the belief – the SEC will bust Frishberg and strip him of any investment license he might currently have.  That’s likely the most they can do.
  5. I believe the law enforcement community (at the Federal level) will indict Dan Frishberg and, perhaps, Al Kaleta for wire fraud, conspiracy and other crimes – especially if there is sufficient notoriety with this case.  Could be wrong here, but it’s hard to believe that the justice department will just let this one slide – especially since Frishberg has stayed on the air and continued the charade.

Stay tuned…there’s plenty more to come including an interview with Rehan Siddiqi.  IF you wish to read the Siddiqi lawsuit a copy is here.  Siddiqi Lawsuit July 2010

As always – YOUR COMMENTS WELCOME!


Dan Frishberg and BizRadio – The Calm Before the Storm – will it be CIVIL or CRIMINAL?

June 24, 2010

All seems quiet on the western front – well at least for Dan Frishberg in Houston that is – and BizRadio.  But don’t mistake quite for inactivity.  Sometimes what is done in quiet can have profound and very loud consequences.

So…for those who have been following here is an update.

  • On June 17, 2010 an order was filed in the US District Court effectively representing an agreement between the SEC Receiver and the Court.  In the agreement the assets of BizRadio and DFFS (Daniel Frishberg Financial Services) were brought under the control of the Receiver along with the Kaleta assets.  The Agreement in its entirety can be see here.  34
  • A couple of items related to this that are noteworthy:  (a) the Receiver initially was attempting to pierce the corporate veil and go after Frishberg personally.  That did not happen.  Instead the Receiver got to include directly the assets of the organizations that were first included in the SEC Receiver appointment for BizRadio and Frishberg.  (b) the order stipulates that DFFS owes Kaleta Capital Mgmt. $1.2 million.

WHAT ABOUT THE BANKRUPTCY?  It seems that since the primary assets from DFFS and BizRadio are now in the hands of the Receiver there is not practical reason to move forward with the bankruptcy.  That is over as best I can tell.  The Receivers role is to protect all people who have a vested interest in some form of monetary recovery and no sense in complicating that with another entity involved – namely a bankruptcy judge.

WHAT ABOUT THE LAWSUITS?  Now that is another matter.  I reported on a suit filed by Barbara Doreen House in an earlier blog.  On June 10, 2010 the following was issued effectively dismissing the suit since a bankruptcy action was pending.  But from what I understand from a conversation with the SEC Receiver – the bankruptcy is dismissed so what that means to Ms. House’s lawsuit and others – like the one for $18 million filed by Rehan Siddiqi I have no clue.  Here’s the paperwork from the House dismissal.  Fraud dismissal

WHAT ABOUT THE MONEY FROM THE RIA?  Ah…now that’s where the seemingly quite issue gets interesting.  Daniel Frishberg used BizRadio as his mouthpiece and voice to attract clients.  The clients trusted Dan “The Money Man” and it has been reported that Dan (at one time) was earning some $700,000 per quarter for his work with DFFS – his RIA.   Not a bad income for a suspected con artist like Dan.

Dan – realizing that he’s going down – works to preserve his income and sells his RIA to William Heath.  I have tried calling Bill Heath several times for an interview.  Surprisingly he’s never there.  Go figure.  But on May 25th, 2010 he was being deposed by the SEC Receiver so I’m sure that he knows far better than I the real truth behind the transfer.  But there is some controversy.  Between who you might ask?  Guess…  greedy Dan Frishberg who is trying to protect himself and the SEC Receiver – who is trying to protect those who have been victimized by Frishberg and Kaleta.

Frishberg says that the income from the “former” DFFS assets should go to him as he is a CONSULTANT and that the income was consulting fees.  The Receiver (and these are my words not his) would claim that the assets earned from the monies invested are assets of DFFS and therefore under his control and dominion.  Well…what would happen if Frishberg loses that argument?  UH…he’s have no income!  And I can hear many of you who read say – Rightly So!

We’ll see what happens with that battle…  Stay tuned!  (my bet is with the SEC)

WHAT ABOUT CIVIL OR CRIMINAL ISSUES?  First, (old news) Kaleta lost his license as an investment adviser and therefore has effectively been rendered impotent when it comes to a career in the investment adviser world he once roamed and played in.  I SUSPECT THE SAME WILL BE TRUE FOR FRISHBERG.  I do not have a crystal ball, but if I were a betting man I would say that soon (by the end of the summer) the SEC will rule against Frishberg and he will lose his license – the same as Kaleta.  When that happens Frishberg will be out of business.  No more license.  No more credibility.  No more inside track.  And, most of all – No more radio show to promote his scams.

Now…on the CRIMINAL SIDE.  That seems to be up for debate.  There are clearly two camps: (1) those that feel that the SEC civil is sufficient to protect the public; and (2) those who feel that Frishberg and his exploitation of the airwaves for gain should justify criminal prosecution.  The problem is – there are too many crimes out there to prosecute so the US Attorney’s office just might pass on this one.  Whether they do or don’t may, in part, be a function of whether there is sufficient public outcry for punishment beyond losing one’s license and livelihood.  WHAT ARE YOUR THOUGHTS…CIVIL ENOUGH OR SHOULD CRIMINAL FOLLOW?

As more comes to light I will be one of the first to report.  For now…all quite on the western front is a bit deceiving – cause take to the bank work is still be done to bring some right to this blatant WRONG.

YOUR COMMENTS ARE WELCOME!


BizRadio – Another day another Lawsuit! Daniel Frishberg’s legal issues continue…

June 2, 2010

When the flow of money stops the crash is deafening!  Just ask Bernie Madoff, Sir Robert Stanford, and a whole host of others who either have faced or are facing the long arm of the law for their fraudulent financial actions.  Daniel Frishberg is NO BERNIE MADOFF – he’s not that smart, but many who have contacted me over the course of the past six months have said that he is that crooked.  Guess…time and the federal government will ultimately be the judge of that.

What is certainly true is there is a long line of folks who just want their money back.  They did not wish to be scammed.  They did not wish to own a failing radio station.  They did not wish to have their investment savings manipulated by someone (or group) that had first and foremost in mind their own self interest.  All they really wanted was to invest their hard earned dollars into something that would give them a safe and secure return.  And, folks RADIO ain’t it!

Now comes Plaintiff – DRA CRT POST OAK, LP – the Landlord for the property formerly occupied by FRISHBERG FINANCIAL SERVICES, INC.  Seems that Frishberg leased the property located at 3050 Post Oak Blvd., Houston, TX starting on December 1, 2002 with an expiration date of May 31, 2011.

Oops…Daniel’s funds dried up.  Now that is no great surprise.  It started when Kaleta got in trouble with the SEC and hasn’t stopped yet.  Did Frishberg create a Ponzi scheme?  I’ve been asked that a number of times, both in emails and telephone calls.  Answer: well…kind of.  To me, it seems that Frishberg, Kaleta and others really created more of an investment scam.  I’d call it “investment adviser fraud” – in that, they sure enough sought investor dollars that – for the most part – funded their money losing business so that they could attract more investment dollars.  From that perspective, it is a type of Ponzi scheme, but in reality they just scammed folks by making them believe that they were investing in something that was low risk and, almost a sure thing!  Either way you cut it – it was a scam and clear self dealing.  But back to the lawsuit…

CAUSE OF ACTION ONE:  $90,035.59 left owing on the lease creating the suit against Frishberg Financial Services, Inc.  Demand has been made and according to the document, Frishberg Financial Services, Inc. refused and continues to fail and refuse to pay the amounts due and owing pursuant to the terms of the lease.

CAUSE OF ACTION TWO:  Claim amount of $286,321.87 for anticipatory breach of lease with Plaintiffs claiming they can prove the reasonable cash market value of the Leases Premises for the unexpired term of the lease.

CAUSE OF ACTION THREE:  Plaintiff claims pre-judgment interest at the rate of 18% per annum as allowed by the statues of the State of Texas.

CAUSE OF ACTION FOUR:  Plaintiff requests recovery of reasonable attorney’s fees.

Total request excluding attorney’s fees, court costs, pre-judgment and post-judgment interest, is $376,357.46.

THE QUESTION really is what effect the involuntary bankruptcy and request by the SEC Receiver will have on all these lawsuits?  Rehan Siddiqi sues for $18,000,000.  Several individual lawsuits have been filed and now the Landlord.  There seems to be no end to the claims against Frishberg.

BUT HERE’S HOW IT WILL END…  Daniel Frishberg will eventually lose his license as a Registered Investment Adviser and be admonished by the SEC just like Al Kaleta.  My guess is that will happen within the next three months as the SEC has less time to take action civilly than others do criminally.  Frishberg will effectively be banned from using his knowledge and talent to sway investors.  The radio run will be over and “the Money Man” will be no more.  Following that, I believe that criminal law enforcement entities will take issues with both Daniel Frishberg and Albert Kaleta into a different realm.  In fact, likely the investigation and work that the Receiver will continue to do will form the basis for a series of criminal charges that will be levied against Frishberg and Kaleta.  Based on other cases, it would be difficult not to convict Frishberg and/or Kaleta (I suspect both) on mail fraud, wire fraud and, perhaps, investment adviser fraud.

With all that is happening in the financial markets, Frishberg has far too much notoriety to avoid criminal prosecution with prison time that follows – least that’s the way it seems to me.


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