Rich Dad Poor Dad Ethics on the line – Robert T. Kiyosaki files for Bankruptcy. Choices Consequences and an Ethical Challenge!

October 18, 2012

Just a few days ago it was reported that Robert Kiyosaki of “Rich Dad, Poor Dad” fame filed for corporate bankruptcy through Rich Global LLC – one of his many companies.  Rich Global LLC filed for Chapter 7 bankruptcy protection on Aug. 20 in a Wyoming bankruptcy court.  The New York Post reported the following:

Robert Kiyosaki

After a long, lucrative career writing financial self-help books and giving seminars, “Rich Dad Poor Dad” author Robert Kiyosaki has filed for bankruptcy for one of his companies after losing a $24 million court judgment.

Kiyosaki’s Rich Global LLC filed for bankruptcy after being ordered to pay nearly $24 million to the Learning Annex and its founder and chairman, Bill Zanker.

US District Judge Shira A. Scheindlin in April ordered Rich Global to pay up $23,687,957.21 after a jury ruled Kiyosaki must give the Learning Annex a percentage of his profits after using their platform for speaking engagements, including a 2002 gig at Madison Square Garden.

The challenge here, at least for me, is not the bankruptcy filing – rather it’s the ethical implication related to the filing.  The short version is that there was an agreement with the Learning Annex to promote Kiyosaki and his brand for a percentage.  By all accounts they did their part.  The challenge is they claim that Kiyosaki didn’t do his.  In other words he didn’t pay up.  Again the New York Post states:

Zanker told us, “I took Kiyosaki’s brand and made it bigger. The deal was I would get a percentage, and he reneged. We had a signed letter of intent. The Learning Annex is the greatest promoter. We put his ‘Rich Dad’ brand on a stage. We truly prepared him for great fame and riches. But when it was time for him to pay up, he said ‘no.’ ” This has taken years in court. I won even more money than I asked for from the jury, then he declared corporate bankruptcy. Oprah believed in him, and Will Smith believed in him, but he didn’t keep his promise to us.”

Mike Sullivan, CEO of Kiyosaki’s Rich Dad Co., told us that Kiyosaki, said to be worth $80 million, was still doing very well thanks to investments in other companies: “The dealings we had with Learning Annex were with a company that hasn’t been in business for a number of years . . . I am not surprised Learning Annex is upset and angry, the money doesn’t exist in that company, and we can’t bring money out of the group.

The core question – If a jury in a court of law says that you failed to honor your contract with a service provider and they establish an award as punishment, compensation, or justice for the failure that they found existed, is it ethical to use the legal system to avoid the consequence?

“Robert and [wife] Kim are not paying out of personal assets. We have a few million dollars in this company, but not 16 or 20. I can’t do anything about a $20 million judgment . . . We got hit for what we think is a completely outlandish figure.”

Reportedly work some $80 million, it would seem that Kiyosaki’s ethical limit is defined by money.  But is that right?  Certainly many would argue that the legal system is designed to protect one from unfair or unjust circumstances much like what I suspect Kiyosaki feels he received.  Yet, others would argue that justice was served at the hand of the jury and that Kiyosaki has an ethical moral obligation to honor the award and pay up.

But what if we take this to a higher plain.  Is it possible that short of paying up based on the idea that it is moral, ethical and founded in integrity, that failure to do so will create the desired outcome anyway?  Is it possible that when one violates, what to some is simple ethics, that reality is karma takes over and delivers the outcome or consequence anyway?

It is not up to me to judge – rather I am interested in the ethical questions and what you think.  YOUR COMMENTS ARE WELCOME!

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Russell E. Mackert, Brent Oncale, David White, Eric M. Kruz, and Tomme Bromseth sentenced to significant prison sentences for $100 million fraud scheme!

August 1, 2011

Five employees for A&O Resource Management Ltd. and various related entities – including two executives – were sentenced recently for their roles in a $100 million fraud scheme with more than 800 victims across the United States and Canada.

The sentences were announced by U.S. Attorney for the Eastern District of Virginia Neil H. MacBride and Assistant Attorney General Lanny A. Breuer of the Criminal Division.

The five individuals were sentenced by U.S. District Judge Robert E. Payne.  Russell E. Mackert, 52, general counsel for A&O, was sentenced to 188 months in prison; Brent Oncale, 36, former owner and founder of A&O, was sentenced to 120 months in prison; David White, 41, the former president of A&O, was sentenced to 60 months in prison; Eric M. Kurz, 47, a wholesaler of A&O investment products, was sentenced to 60 months in prison; and Tomme Bromseth, 69, an A&O sales agent in the Richmond area, was sentenced to 36 months in prison.

“The impact of this massive fraud on many of A&O’s investor victims has been disastrous,” said U.S. Attorney MacBride.  “Hundreds of elderly investors invested their life savings with A&O and saw it all vanish in an instant.  These investors were not looking for quick cash, just a safe alternative to invest their retirement funds.  The safety, security, and no-risk nature of the investment was critical to the sales pitch, and it was all a big fat lie.”

“Brent Oncale and his co-conspirators operated a sham investment company that turned fraud and deceit into a business model,” said Assistant Attorney General Breuer.  “They stole millions from hundreds of unsuspecting investors, pocketing huge sums for themselves. Today’s sentences reflect the severity of these cowardly and costly crimes.”

All five men pleaded guilty in the fall of 2010 and early 2011 for their roles in the fraud scheme at A&O, which falsely marketed life settlement products to investors, many of whom were elderly.  The conspirators at A&O defrauded investors by making misrepresentations about A&O’s prior success, its size and office locations, its number of employees, the risks of its investment offerings, and its safekeeping and use of investor funds.

When state regulators began to scrutinize A&O’s investment products, conspirators manufactured a sham sales transaction to “sell” A&O to an offshore shell corporate entity named Blue Dymond and later to another offshore shell corporate entity named Physician’s Trust.  However, A&O and Physician’s Trust was still secretly controlled by A&O principals and their conspirators.

It was a bold scheme that saw Mackert, 52, create sham companies, make up the name “R.J. Stephenson” as a fictional representative, hire an actor who pretended to do due diligence on a sale, and slip $10 million in cashier’s checks past customs in Fort Lauderdale to deposit in a secret trust account in Nevis.

On June 6, 2011, the hedge fund manager of A&O, Adley H. Abdulwahab, 35, of Houston, was convicted by a jury in Richmond, Va., of one count of conspiracy to commit mail fraud, five counts of mail fraud, one count of conspiracy to commit money laundering, five counts of money laundering and three counts of securities fraud.   A founder of A&O, Christian Allmendinger, 39, was convicted by a jury on March 23, 2011, of one count of conspiracy to commit mail fraud, two counts of mail fraud, one count of conspiracy to commit money laundering, two counts of money laundering and one count of securities fraud.  Abdulwahab is scheduled to be sentenced on Sept. 28, 2011, and Allmendinger is scheduled to be sentenced on Aug. 14, 2011.  They face up to 20 years in prison on each count except the securities fraud counts, on which they face up to five years in prison.


Dr. Lillian Glass vs Marsha Petrie Sue – Does being found liable of “Copyright Infringement” equal an NSA Ethics Violation? Part 2 of 2

January 15, 2011

As I began the first part of this series, which oddly enough began as an exploration of NSA’s code of ethical conduct, I raised questions related to Martha Petrie Sue’s being found liable of “Copyright Infringement” and the ethical impact it might have related to her membership and designation within NSA (the National Speakers Association).

As part of my work, I felt that since I had reached out to Dr. Lillian Glass to gain her perspective – much of which she would not allow me to publish as she stood by her news release – it was appropriate to provide the same opportunity to extend the same to a fellow speaker and NSA colleague.  In the interest of fairness, I did find Dr. Glass to be open in her expressions related to the case and I felt that, while the win was limited in scope to two lists, my interpretation was that Dr. Glass felt that not only had she stood up for her intellectual property, but in doing so struck a victory for others demonstrating that those who copies another’s intellectual property would experience consequences.  For those that follow my work you know that I open each presentation on ethics with the phrase – “Every Choice has a Consequence.”  I believe in the power of choice and the inevitability of consequence!

But, (I know you never start a sentence with ‘but’)…but – when I reached out to Marsha Petrie Sue, I, too, found a person who was very open to sharing her side of the story – and we all know that every story has two sides.  Below you will see the questions I posed to Marsha Petrie Sue and her responses verbatim.  Beyond her comments, from time to time you will find my own and I will do my best to make sure that mine are clearly noted so as not to be confused with Marsha’s words.


1.     In December 2010 you were found liable, by a jury in Federal Court, of “Copyright Infringement”.  Were you surprised by the verdict?

“Shocked because I did nothing wrong.  I prevailed on the majority of the lawsuit.  See below!”

2.     Assuming you were (if not skip this question), before this ever got to Federal Court, what attempts did you make to settle the dispute that arose between you and Dr. Glass?

“Yes – many.  See PDF 154-24.  We tried mediation and Glass would not even be in the same room as me.  Finally she agreed and would not shake my hand or even recognize that I was there except when she yelled abusive and vile comments at me.  Her lack of maturity and hate for me, for whatever reason, were very apparent.”

3.     Did Dr. Glass – when (I assume) she raised the issue at the beginning of copyrighted material request a non-court settlement?  And if so, what were her demands?

“Partly, but her settlement requests were ridiculous.  For example, in the original claim she said that she coined “Sticks and Stones will break my bones and names will never hurt me” and that I had stolen that from her books.  I believe it was Rudyard Kipling.  She said I should never be allowed to use that statement again.”

4.     According to published media reports, you had material (two lists) in your book, “Toxic People” that was previously included in Dr. Glass’s book – “He Says, She Says.”  How did you come about that material?

“Many years ago, as people often do, I was sent two lists with very generic information concerning men and women in the workplace. I asked the person if I could use their information and they said yes. The language was so common and the information so generic, containing 132 words that I didn’t think there was an original author and that the person that approved this was the originator. Being a professional speaker and author people often send me quotes, quips, lists and other information they deem of interest. I’ve even had people pass me notes after a presentation. Glass’s He Says, She Says, where the lists originally printed is a full chapter, Paragraph style and over 1900 words.  So they are NOT exact.”

5.     Were you aware of Dr. Glass’s book – “Toxic People” – before you penned your book?

“No and I never heard of her either.  I began writing “Toxic People” in 2004 and Google searching was not something I did.  My original submission to Wiley had the title of “Decontaminate Toxic People” and they changed the name to “Toxic People.””

6.     Based on your earlier email (Chuck’s voice here – I had sent an email requesting an interview) in which you said or inferred that the lists were sent to you by a connection, did you make any attempt to search the wording to find out if it was copied from another source?

“The lists are VERY generic.  I knew many people had come up with similar information.  They were too common to search.”

CHUCK’S VOICE  – There are ways to scrub your material to compare it to copyrighted material and/or to evaluate whether it might be subject to a claim of plagiarism.  Apparently this is how many in the academic community are now being discredited with respect to former writing.  Years back technology was not available to scrub material in the same way it is today.  Was it available in 2004/2005?  I don’t know, but I would assume that publishers would protect themselves and their authors by using such technology.  Perhaps they don’t!

7.     As you know from the Dr. Lillian Glass website – Stanford University Professor Robert I. Sutton accused Marsha Petrie Sue, an Arizona professional speaker, of “plagiarism” – what comments do you have regarding the Sutton allegation?

“I’ve never heard of him, and don’t know who he is.  He never contacted me. You might also find interesting

8.     NSA has specific rules related to “intellectual property” and being found liable in Federal Court of “Copyright Infringement” would seem to fly in the face of those rules.  As a CSP and respected NSA member, what comments would you make regarding your conviction and the NSA position on “intellectual property”?

“I have done nothing wrong.  I have no control over a vindictive person who in the summary judgment had all issues thrown out except for the 132 words in the list.  The case is not finished.  Please also refer to below information re: details of the case – and I have more.”

9.     Likewise, NSA has specific ethics rules that we (NSA members) are held accountable to follow.  Some would say that you violated Article 4 – Intellectual Property.  What would you say in defense of that ethics violation claim (please note I am aware that no such claim has yet been made – however some at NSA feel that a formal complaint will be forthcoming)?

“Gosh – and this is the first I’ve heard of it.  I guess my colleagues and friends would rather solve this problem behind my back.  No. I have done nothing wrong.”

CHUCK’S VOICE:  I regret the manner in which the question was asked as it inferred I had some inside information with NSA and I do not!  Rather, I have heard from a number of NSA leading speakers that they expected that a formal complaint would be filed since a finding of being liable of  “Copyright Infringement” would almost certainly be deemed by most to be a clear ethics violation, especially since that is directly connected to “intellectual property” and NSA has taken a clear stand on such issues.  I accept responsibility for my poorly worded question and apologize to Marsha and NSA if I inferred something inaccurate.

10.  From a different ethics perspective, it seems that Dr. Glass has gone to extraordinary lengths to expose your being found liable including material front and center on her website, notices on Facebook and a make shirt blog on WordPress.  What do you make of all the public and national attention this case seems to have received?

“I believe Glass is trying “ruin” me because she is jealous and vicious. Also believe that she is trying to sell her own books creating a platform from my visibility. I think she should be pitied.”

11.   I have been told your book – “Toxic People” – can now NOT be sold since it contains “Copyright Infringement” material – is that accurate?

“Not true.  She settled with Wiley with no monetary exchange.  They still sell the book on all outlets (Amazon, B&N, etc.)  The book is still there and I am still selling.”

12.  Do you plan on revising the book to remove the offensive content and then reissue?

“The content was not offensive nor copied. This is Wiley’s call not mine.

Here are my lists – and her list was over 1900 words and set as an entire chapter – and in paragraphs.

What women need to do in the business world when working with men:

1.     Do not minimize your accomplishments at work.

2.     Keep discussions to job-related issues or news events.

3.     Lower the pitch of your voice.

4.     Get to the point and include who, what, when, where and how.

5.     Do not use tag endings, such as “isn’t it?” or “right?”

6.     Drop your tone down to make a declarative statement.

7.     Monitor your head-nodding and smiles.

8.     Do not apologize unless you are wrong.

What men need to do in the business world when working with women:

1.     Use more terms of politeness like “Please” and “Thank you.”

2.     Do not be afraid to ask for help – forget about your ego.

3.     Provide more facial and verbal feedback.

4.     Make more polite requests instead of barking out commands.

5.     Control your temper and handle yourself in a professional manner.

6.     Be aware of addressing women with condescending terms like honey, sweetheart, babe or dear.

7.     Do not interrupt or monopolize conversations. “

13.  According to your website – the publisher was John Wiley and Sons, the publisher of record – wouldn’t they “scrub” the book for content and compare it to other material so any issues of plagiarism or “copyright infringement” would be discovered in advance of printing?

“The material is so generic that is would be very, very difficult to “scrub” – see above comment.”

14.   If you were on the NSA Ethics review board (it may not be called that) – as a CSP – if this came up for another member and you were to judge whether an ethics violation had occurred – what would your opinion be?  And, what outcome do you feel would be appropriate considering all the facts and circumstances?

“I would want to fully understand out members side and why this has come about.  She sued Wiley and me in New York – and the case was thrown out (maybe not the right term) Her attorneys work on contingency and I believe this round of attorneys is her third group. And with a settlement of $31,000 – they and she lost a considerable about of money.

Pat the member on the back for not stooping to Glass’s level of vile attack and upholding the character and professionalism of NSA.”


Glass was not the prevailing party because there can only be one “prevailing party” and Glass was not such a party. Glass alleged that I infringed copyrights to four of Plaintiff’s books: Say It Right; The

Complete Idiot’s Guide to Understanding Men and Women; Toxic People: 10 Ways to Deal with People Who Make Your Life Miserable; and He Says, She Says. This Court granted Ms. Petrie Sue’s motion for summary adjudication on first three of those books. Although Glass prevailed at Trial on the fourth book, that is not enough to overcome the fact that her copyright claim as to three of her books had no merit as a matter of law.

A plaintiff who prevails on one copyright claim, but loses on even more copyright claims (as well as all of her non-copyright claims), see Riffer Decl. ~~ 2-4, is not “the” prevailing party.

Glass’s motion which cites 24 cases, does not even address the dispositive fact for this motion — that she lost more copyright claims than she won. This is further evidence (as explained below) that

Glass’s counsel looked at this case as creating a billing opportunity.

Glass had no interest in resolving her dispute with me in a reasonable manner. She wanted a Trial, irrespective of the value of her case or the cost of litigation. She retained her attorneys on a contingency, so cost did not matter to her; her attorneys viewed the case as an opportunity for an attorney fee award, so the higher the cost, the better. She viewed the Trial as a publicity event that could generate stories about her to help her sell her books. Her final settlement demand ($233,000) was more – about $85,000 more — than the maximum a jury could award her ($150,000) for statutory damages.! The $85,000 figure was no coincidence either.

Her counsel candidly admitted that she really wants to go to trial – again publicity stunt material. I believe her counsel’s motivation was to create a billing opportunity. Her motivation was to generate publicity to help her sell her books.  Taking the energy and resources needed to tear me down could have been used to sell her latest books – and even the old ones.

Why would I pay more to settle than it risked even if lost a Trial, especially after such I had prevailed on all the other (copyright and non-copyright) claims in the case?

So, Glass received her wish. She had her Trial.  She so she claims to have ‘won’, even though she:

~ lost on three of her four copyright claims; ~ lost on every other claim in the case; and ~received a jury verdict of $31,000 when her last settlement demand, made only a few days before Trial, was $233,000.

Obviously, anyone who is “very happy” with such “results” had her own agenda, which was not to resolve the case in a reasonable manner, but rather to generate publicity to sell her other books.

REMOVED COMMENT  due to factual dispute… Couple that with her counsel having their own agenda as well. Obviously, anyone who represents to a Federal Court that the outcome of this case — a $31,000 jury verdict on one claim after losing all other claims — was “exceptional,” “very successful” and an “excellent result” had his own agenda, which was not resolving the case in a reasonable manner.


I guess I now need to retake the content control and say – WOW!  My intent was to open the door to an ethics discussion and I think I got a bit more than I bargained for.  While I am sure both parties will take offense to my next comment I suspect that those who care to read will agree…this is a bit of a cat fight!

Dr. Lillian Glass, who I will admit handled herself professionally in my interview of her, clearly had a strong emotional charge to the outcome and the fact that (whether Petrie Sue likes it or not) Glass won in a federal court.  Whether you win one count, four or forty…being convicted is being convicted!  Based on my personal experience, and I’ve had personal experience in Federal Court, if you’re found guilty – a good dose of humility and reflection is in order.

Marsha Petrie Sue, on the other hand, is (in my opinion) in defensive mode related to her conviction.  That is common when someone finds that they are in unfamiliar territory and for most, being convicted in Federal Court is unfamiliar territory.

Rather than making a judgment on Dr. Lillian Glass’s or Marsha Peterie Sue’s actions – pre or post jury decision, I’d rather quote from my book as I leave the issue of an ethics violation to NSA and you – the readers.

Every choice we make in life will have either a negative consequence or a positive result. The outcome we receive is directly connected to the choices we make. As we live our outcomes, the more aware we become of how our choices impact the results we live, the greater power we have to produce the outcomes we desire.  Choices made without self-integrity or ethics result in negative results, while choices made with self-integrity result in positive results. My life demonstrates both extremes. –

from SECOND CHANCES: Transforming Adversity into Opportunity – by Chuck Gallagher

Perhaps it’s time for both Glass and Petrie Sue to look in the mirror and ask the more significant question – what choices am I making today that reflect self-integrity and will be deemed to empower and benefit others?

Meanwhile…is it possible that one can become the title of one’s book?


This is just NUN sense…A Sister arrested for stealing $1.2 million. Isn’t that like a Biblical no no Sister Marie E. Thornton?

December 13, 2010

Sometimes the choices we make just don’t add up.   Take the case of Sister Marie E. Thornton, a former vice president of finance for Iona College and a nun.  Sister Thornton was recently arrested on charges of embezzling more than $1.2-million from the Roman Catholic college over the course of 10 years.

What?  Yep…that’s right.  Arrested for embezzlement.  According to published reports, Federal prosecutors collaborated with the Department of Education in bringing the charges, which were announced by the U.S. Attorney’s Office in Manhattan in a news release.

According to the news release, Sister Thornton allegedly diverted college funds for her own use by turning in false vendor invoices for reimbursement and submitting credit-card bills for personal expenses to the college.

Iona College, in a statement, disputed the size of the theft, calling the $1.2-million figure “significantly inaccurate.”  Sorry, but I have to ask, is this just another attempt at a cover up by the Catholic organization?  In my personal experience, rarely have I seen the US Attorney’s office dramatically inflate the size of a crime.  But this might just be a bunch of nun sense anyway…

The college, located in New Rochelle, N.Y., had previously disclosed that it had fired an unidentified employee for misappropriating approximately $80,000 a year over a decade. Another employee thought to have been involved in covering up the fraud was also fired.

Iona said that it had taken immediate action after discovering a year and a half ago that an employee had misappropriated funds, and that it had conducted a follow-up investigation and put preventive procedures in place. The college also said it had recovered most of the missing money but declined to comment further.

Sister Thornton served as Iona’s vice president for finance and administration for roughly a decade, and she previously was assistant to the president for five years, according to the college’s financial documents. She holds a doctorate in educational administration from Fordham University and previously spent time as a teacher, a principal, and a deputy school superintendent.


With credentials out the wazoo…what do you suppose would motivate Sister Thornton to take such actions?  And, how do you suppose she was able to rationalize her behavior?

If you know Sister Thornton – please comment and lets establish a dialogue related to my questions above.


Burqa ban vs. Christian Flag ban – Where do you fall on the ethics of the Governmental decisions?

October 7, 2010

O.K. – I know that this is a controversial subject, but at times it is worth taking the time to explore choices, consequences and opinions.

Earlier today a report came out in Fox News of – what they referred to as – a Holy War in a little town in NC (the state of my residence).  The article stated the following:

A holy war is brewing in a small North Carolina city, where the Christian flag seems to be flying everywhere.

A meeting of the King, N.C., City Council was packed on Monday with dozens of citizens who asked city officials to put the Christian flag back up at the local Veterans War Memorial. The council had voted to take down the flag rather than spend the estimated $200,000 to $300,000 it would cost to fight the American Civil Liberties Union in a First Amendment lawsuit.

“The city received inquiries from the ACLU and the Americans United for the Separation of Church and State suggesting that the Christian flag flying over the Veterans Memorial at Central Park violates the Establishment Clause of the First Amendment to the U.S. Constitution,” City Manager John Cater said. “At the advice of the city attorney, the City Council voted to take down the Christian flag at last night’s City Council meeting, citing the enormous cost associated with fighting a potential lawsuit on the issue.”

Katy Parker of the ACLU in North Carolina told, “The city council did the right thing to take down the flag because it was endorsed by the city as part of a public monument. Now, if private citizens want to hold the flags, it is absolutely their right to do so.”

As an ethics speaker and author, I often pose questions that seem to illustrate the conflict between law and what many would call ethical behavior.   If you define ETHICS as “that branch of philosophy dealing with values relating to human conduct, with respect to the rightness and wrongness of certain actions and to the goodness and badness of the motives and ends of such actions,” one might easily say that the values of this community – their human conduct – represents the ethics and values that they hold fast to and to remove (as is the case here) the Christian Flag from a public display lack ethics, values and does not represent the code of human conduct that is pervasive in this tiny North Carolina town.

QUESTION: When testing the outcome of an action (the removal of the flag in this case) between the ethical beliefs of the community in contrast to the law – which should win?

Should the offense of one or two outweigh the desires of the many?


Today, according to a CNN report, top constitutional authorities in France approve the banning of the burqa and other Islamic face coverings.  The report states the following:

France’s plan to ban the burqa and other Islamic face coverings in public places is legal, top constitutional authorities in France ruled Thursday, so the law goes into effect immediately.

In September the French senate approved the law – making France the first European country to nationally impose such a measure. The legislation was overwhelmingly approved by the lower house of parliament in July.

French people back the ban by a margin of more than four to one, the Pew Global Attitudes Project found in a survey earlier this year.

In this case the question, like the one above, rests on the law vs. the ethical choices of a group or religious beliefs of a group and popular legislative beliefs and actions.  Female members of the Islamic faith in France are faced with a real conundrum.  Do they comply with Islamic law or expectations or do they comply with the law of the land in which they reside?

QUESTION:  Is it ethical for a government to take an action that addresses the ability of an individual to practice their religion when the interests of the population is take away that religious compliance option?

It is not my intent to express an opinion one way or the other, rather, my hope is that we raise the discussion regarding religious desire, practice, compliance, law and ethics.


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.


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.


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…


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!


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.


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.


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


(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?


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?


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.


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


Fair Finance – Seems that beneath the surface it was anything but FAIR!

May 18, 2010

Fair Finance.  When I first heard that name I was confused.  I thought it might be a non-profit organization – left leaning perhaps – that fought for or advocated “fair finance” for the underprivileged.  Man…isn’t if funny what’s in a name.  Was I sure wrong!

Below is an article written by By Jim Mackinnon – Beacon Journal business writer.  Turns out Fair Finance was nothing more than massive Ponzi scheme. Read the great article by Mr. Mackinnon and you’ll get a clearer picture of what “Fair Finance” really was all about.

The court-appointed trustee for Fair Finance Co. has his eyes on lots of fancy cars and artwork that he believes were purchased with money from the under-investigation Akron finance and loan business.

There are three Bentleys, an antique Duesenberg, Mercedes and Jaguar cars, even a Lamborghini. The possible value is in the millions — same thing for the art, primarily paintings purchased by Fair Finance co-owner Timothy Durham, said the trustee, Cleveland attorney Brian Bash.

Bash on Tuesday said he is looking into the sale of more than $1 million in antique and exotic cars by an affiliated company in Indiana, Diamond Investments LLC, as he works to preserve assets for the bankrupt Akron business.

Bash said he is placing liens on perhaps as many as 100 vehicles listed under Diamond, which does business as Diamond Auto Sales. The business is owned by Durham.

”These are pretty fancy cars,” Bash said. Most of the vehicles are in storage, while the Duesenberg and three Bentleys were among vehicles sold recently in Indiana, he said. The vehicles were not ”on the books” of Fair Finance, he said.

Bash talked about the cars and artwork during a monthly status report in federal bankruptcy court in downtown Akron.

”Those are unique assets,” said Marilyn Shea-Stonum, chief judge of U.S. Bankruptcy Court for the Northern District of Ohio, who is overseeing the Chapter 7 liquidation process.

Of the more than $1 million from the car sale proceeds, ”it looks like a number of law firms were paid over $908,000,” Bash said. ”We’re going to be investigating that.”

Bash gave his report over a telephone conference call in open court; just six Fair Finance certificate holders attended. Bash’s monthly update took place less than a week before he will hold a creditors meeting at 1 p.m. Monday at Akron City Centre Hotel, 20 W. Mill St. in downtown Akron. Bash booked the hotel’s Salon A ballroom because he said he anticipates a large turnout.

More than 5,300 people and organizations that include churches bought investment certificates totaling about $200 million from Fair Finance, a small investment and loan company founded decades ago in Akron. The Fair family sold it to Durham and Jim Cochran, two Indiana-based businessmen, in 2002. Most of the certificate holders are in the greater Akron area.

The FBI in late November raided Fair Finance and a related business in Indiana, with court records showing investigators suspected the business was being operated as a Ponzi scheme. Then some investors earlier this year forced Fair Finance into bankruptcy as means to recover assets. The investment certificates, which promised to pay high interest rates, were not government insured.

Bash said he and the team he has assembled continue to look for Fair Finance assets.

Besides the cars, Bash told Shea-Stonum that he is in discussions to have ”a number of pieces of artwork” turned over to him.

Afterward, Bash said Durham had estimated the value of his art collection in the millions of dollars.

The pieces that he does have are ”secured, stored and insured” but he wants the entire collection, Bash said.

”I don’t even have half of it,” he said. ”I’m hopeful they will start cooperating more.”

There also might be as much as $5 million in Fair Finance equity in accounts overseen by two firms, Fortress Investment Group LLC and Duvera Financial, that did business with Fair Finance, Bash said. He said he has asked for an accounting of the money and that the two firms said the information is in more than 80,000 pages of documents.

And in what would be a significant move in the bankruptcy proceeding, Bash said he also expects to shortly have all the assets of Fair Holdings, which is Fair Finance’s Ohio corporate parent, and those of DC Investments — the Indiana corporate parent — assigned over.

”My view right now is, I’ve heard them [Fair Holdings and DCI’s representatives] wanting to cooperate but I haven’t seen the actions follow the words,” Bash said.

The FBI is continuing to scan Fair Finance documents, Bash said. ”My accountant goes out to Indianapolis to review those records,” he said.

It does not look as if any former Fair Finance employees will testify or answer questions at Monday’s creditors’ meeting, Bash said.

”It’s my understanding none of the individuals are willing to testify because of the ongoing investigation by the FBI,” he said.

In addition, the Indianapolis law firm representing Fair Finance, Taft Stettinus & Hollister, told Bash in writing and the judge during the conference call that it intends to withdraw as Fair Finance’s counsel. The firm did not give a reason.

Shea-Stonum said investment certificate holders and other creditors who have questions about the case need to go online and review court documents. She said the bankruptcy court clerk’s office is not in a position to respond to questions about the case.

The judge also said certificate holders need to guard themselves from scam artists who claim that they can recover their money from Fair Finance. Scam artists have taken advantage of people in other cases, she said.

”It appears to me the certificate holders in this case have been the victims of what appears to be, well, I’m not going to characterize it. People have been parted from their money,” she said. ”I do not want to see this case become a hotbed for scam artists.”

Shea-Stonum asked Bash to use the trustee’s Fair Finance Web site to post information on how creditors can legitimately find ways to recover assets.

The trustee status report is available online at

Here’s another link to Fair Finance articles.

One more time it seems that we see the reality behind the Ponzi scheme…fancy living, fast cars, a lifestyle that cannot be supported by a real business enterprise.  Sadly, what started out as a legitimate business enterprise that helped many, became a vehicle for fraud.  And while I have not been following this active investigation it appears that I sure should be…so look for more information to come.


BizRadio is DEAD! Frishberg, Kaleta, et al effectively accused of FRAUD. Prediction Criminal prosecution to follow.

May 6, 2010

First, I find no joy in reporting that once what appeared to be a viable business enterprise is dead.  There are investors who have lost thousands, if not hundreds of thousands of dollars, and had no clue that their investment was at risk.  There are investment advisers who, despite their best efforts, have been sucked into the murky swamp of a scam that will be known as BizRadio or Frishberg’s folly.  It is all very unfortunate.

Today, in fact, likely by the time this is posted there will be a hearing seeking, to put it simply (cause that’s the way I think), to consolidate the SEC receiver’s power to protect investors beyond Al Kaleta and Kaleta Capital Management (KCM) to include Daniel Frishberg, Daniel Frishberg Financial Services (DFFS – his RIA), BizRadio, BizMedia and other “shadow” companies named – Frishberg Global Investments, LLC and Portnoy, LLC.

In the filing the SEC receiver states (in part) the following in the motion to the court:

  • Daniel Frishberg and Defendant Al Kaleta created a network of companies (KCM, DFFS, BizRadio, BizMedia, FGI and Portnoy) (the “FK affiliates”) – all owned and controlled by Frishberg and Kaleta
  • DFFS and F&K were investment advisory firms through which Frishberg and Kaleta developed a substantial client base.
  • A number of investment advisory clients of these entities became victims of the KCM promissory note fraud which is at the center of the present action.
  • All of the entities and individuals sought to be included in the KCM Receivership by this Motion are inextricably intertwined with both KCM, the Dependant presently in receivership, and Defendant Kaleta, against whom disgorgement – in an amount to be determined – has already been ordered by this Court’s Judgement dated December 2, 2009.
  • The Commission charged that, in fact, KCM and Kaleta had induced investors to purchase KCM promissory notes using the proceeds to finance businesses owned and controlled by Kaleta, Frishberg and others – businesses that were anything but creditworthy.
  • More than half of the KCM investors’ funds, were loaned to Relief Defendant BizRadio.  Perpetrating a blatant, intentional fraud, Kaleta and Frishberg failed to disclose to KCM investors that all of BizRadio’s tangible assets had purportedly been “pledged” to third parties which would potentially leave the KCM investors little more than BizRadio’s dubious prospects for future income and – as it turns out – fraud and other claims against the entities and their principals.
  • The Receiver requests that this Court exercise its equity jurisdiction to place BizRadio, its affiliates and its two principles (Kaleta and Frishberg) within the pending receivership so that the claims of KCM investors can be pursued in an orderly manner.
  • At all relevant times, DFFS was owned and controlled by defendant Kaleta and Frishberg.  Kaleta and Frishberg caused KCM to loan DFFS amounts aggregating approximately $1,280,000 from the KCM note offering.  These “loans” were not legitimate arms-length transactions.  The KCM loans to DFFS were, in substance, a misappropriation of KCM investor funds.
  • The Receiver is informed that Barrington Financial, a registered investment advisor, has entered into an agreement with DFFS, acting through Frishberg pursuant to which it acquired the asset base of DFFS yielding to DFFS (or Frishberg himself) a substantial share of future revenues generated by the asset base.  The Receiver served Barrington’s Chief Executive Officer and Director of Compliance with the Order Appointing Receiver on February 17, 2010.
  • It is the Receiver’s understanding that DFFS, still owned and controlled by Frishberg, is a going concern with cash flow from which to respond in the present action and assets that might satisfy an order for disgorgement of the proceeds of the KCM note offering.
  • The Receiver seeks a modification of the Order Appointing a Receiver to include Frishberg, Kaleta, KCM, DFFS, F&K, BizRadio, Biz Media, FGI and Portnoy within the Receivership on the grounds that they are related to, affiliated with, and under common control with Defendant KCM.
  • The Receiver seeks a modification of the Order on the further ground that Frishberg and Kaleta are the alter egos of KCM, DFFS, F&K, BizRadio, Biz Media, FGI and Portnoy.
  • In support of the Receiver’s request to pierce the corporate veil and reach Frishberg and Kaleta in their individual capacities, the Receiver will demonstrate that each individual participate in a course of conduct constituting an abuse of corporate privilege and that recognizing the existence of a separate corporate existence would bring about an inequitable result to defrauded investors.
  • The Receiver also requests on an emergency basis a freeze of assets pending this Court’s determination of The Motion to Modify the Receivership Order.  An asset freeze is necessary to prevent further dissipation of the KCM investor’s funds and to preserve assets that could be used to pay disgorgement and civil penalties.

COMMENTS – When an SEC appointed Receiver takes the action that will be heard in court today (May 6, 2010) using words like “blatant, intentional fraud” you know that more is coming and likely that more is criminal.

To be clear, the Receiver’s role is to identify and attach assets that could be used to make whole defrauded investors and to pay civil penalties.  Since I’m not an attorney, I candidly state that I don’t know who gets what when – in other words – I don’t know the pecking order for claims that have been or will be made.  What is clear is that the Receiver is taking the position that a unified collection effort under the supervision of the Receiver (Court) is better than a disjointed effort among different investors, shareholders, or (Southern way of looking at it) folks – who think that Daniel and Albert own them for their losses.

The Receiver goes on to make the following statements (presented in part):

  • Frishberg and Kaleta own and control a group of corporate affiliates that operated from a shared location, utilizing the services of the same employees and freely manipulating the accounting to reflect whatever result they required.
  • A daisy chain of loans by and among, KCM, Frishberg, Kaleta, BizRadio, DFFS, F&K, and other related parties made the accounting function little more than a creative exercise.
  • The books and records make clear that Frishberg and Kaleta have regularly used KCM assets for their personal benefit.
  • Every dollar transferred from KCM to the FK Affiliates came from defrauded investors.
  • KCM is left with no liquid assets and almost $10 million in liabilities to defrauded investors.
  • In records reviewed by the Receiver, Frishberg referred to KCM as a “Credit Line” to BizRadio.

Many of the Receivers comments were referenced by various email correspondence – likely some of which have been seen in my blog over the past several months.

The Receiver goes on (comments presented in brief):

  • The books and records of KCM reflect serial loans to BizRadio in varying amounts beginning in April 2007.  It appears that BizRadio utilized KCM as a credit line or an automatic teller, with up to nine promissory notes in one month, and notes ranging in size from a few hundred dollars to $800,000 at a time.
  • The evidence of improper transfers – not at arm’s length – from KCM to BizRadio is indisputable.
  • The books and records reflect KCM loans to BizRadio as of the third quarter 2009 in amounts exceeding $5,000,000.
  • Mr. Frishberg has asserted – falsely – that the F&K and DFFS notes do not come due until 2013.
  • Abandoning all pretense of legitimacy, Frishberg accessed the proceeds of the KCM note offering for the purchase of his personal residence.  The note was repaid with interest to the Receiver in the amount of $122,068.56 on January 14, 2010.  This payment is the only amount which has been repaid by Frishberg or Frishberg controlled entities and was made, no doubt, in recognition that the transaction would not have been considered lawful by anyone’s reckoning.
  • An analysis prepared by the SEC staff related to Kaleta’s personal expenditures on KCM credit cards suggests that Kaleta owed KCM upwards of $1.5 million.
  • Disturbingly, Kaleta’s counsel – former KCM counsel – recently indicated to the Receiver that Kaleta does not have funds sufficient to pay any form of disgorgement, let along funds sufficient to cover the shortfall in recovery sustained by KCM investors.
  • Statement published by Frishberg clearly state that Kaleta recently sold his interest in DFFS to Frishberg.  Nothwithstanding the substantial indebtedness of DFFS to KCM, Kaleta personally has accepted repayment from DFFS for a series of “personal loans” he purportedly made to his affiliate.  Kaleta arranged that the purported “repayment” be directed to the Fidelity account of his son, instead of into his own.
  • On March 13, 2010, without notice to the Receiver or to this Court, a Chapter 7 Involuntary Bankruptcy petition was filed on behalf of three BizRadio investors.  Since BizRadio is an existing Relief Defendant in the current action and at least one of the BizRadio investors petitioning for its involuntary bankruptcy is also a KCM investor, the Receiver urges this Court to retain jurisdiction over BizRadio and that it be brought within the Receivership estate.

COMMENT:  It is clear that the Receiver (an rightly so) is seeking to capture all assets so that an equitable distribution and/or liquidation can take place.  Makes sense to me, although I doubt all parties concerned want to be placed in the same bucket together.  From my conversations over the past several months, many of them labor under the illusion that what they received from Al Kaleta was legitimate and that they have a superior right.  Personally, I doubt that is true.

The Receiver’s comments continue:

  • Frishberg testified before the SEC that Barrington Financial, a registered investment advisor, has entered into an agreement with DFFS, acting through Frishberg, pursuant to which it acquired the asset base of DFFS for a substantial share of future revenues generated by the asset base.  This transfer of the existing asset base would leave DFFS with the KCM debt, but without a revenue stream from which to repay it.  Frishberg, on the other hand anticipates being paid by Barrington a percentage of the assets transferred to it.
  • DFFS and Frishberg should be placed within the KCM Receivership so that any cash flow from Barrington to DFFS (or Frishberg personally) is preserved for the benefit of the KCM investors.

COMMENT:  Somehow with all this turmoil…I have the suspicion that any reasonable man would take his/her assets out from under the management of Barrington (or anyone remotely connected with Frishberg) and place them elsewhere.  However, that action would mean that the income from DFFS or Barrington would diminish and there would be less for defrauded investors to claim.

Receiver comments continue:

  • The FK Affiliates are the alter egos of their principal, Frishberg and Kaleta and are the alter egos of each other.  The Receiver seeks to disregard the corporate entities and reach all FK Affiliates and both Frishberg and Kaleta individually.

The full filing by the Receiver is attached here:  Notice Of Related Filing 5-5-10

CONCLUSION:  Likely as I write this entry…the Receiver is in court in Houston being heard by a Judge.  The Receiver has intimate knowledge of what has taken place and the SEC certainly has the authority to conduct a thorough investigation.  That is being done…too…as we speak.  What will be the outcome?  With remorse I wish I could say better, but it don’t look good (as us Southern boys would say).

I have said early on that I thought that Dan Frishberg would face time in prison.  Many who have read my writings have suggested that I’ve been too harsh, that I haven’t respected “innocent till proven guilty.”  Well…(with slight modification) like Forest Gump said, “I many not be a smart man, but I know what fraud is!”

The outcome will be that:

  • Most, if not all the investors, who have been defrauded will lose most, if not all of their money.  Sure there will be some return, but it won’t be nearly enough to satisfy what they thought they would receive when promised the moon by, what I will now call, scam artists.
  • Rehan Siddiqi will likely fail in his lawsuit as there are just too many people in line with, likely, superior claims.  He was screwed just like many many more who read this blog.
  • The sale to Salem…well that one has me baffled.  Since it was part cash and part air time, I suspect that Frishberg will soon be off the air and Salem will have to put up more cash to acquire the station or it will be put out to the highest bidder (for cash).  Perhaps that’s the best asset that BizRadio has to be liquidated.
  • There is no doubt that branches of the federal government that have a criminal prosecution arm are preparing their case to prosecute Frishberg and Kaleta criminally.  The question is who is indicted?  Frishberg, Kaleta, spouses, other employees (for conspiracy)?
  • The involvement of David Wallace with Frishberg and Kaleta may not have put him out of business, but it may have harmed his credibility and, while I personally like David, I wonder if his failure to take action to protect his investors places him in the line of fire for a conspiracy charge.  I hope not.
  • Finally, Frishberg and Kaleta will spend time in federal prison (and based on the sentences being handed out today) I suspect that if my prediction is right, it will be for a substantial period of time.

Every choice has a consequence and today…well, let’s see what the court says are the consequences.


Tim Masters Finds Justice – at least $4.1 million of it! How do we answer the question now – Victim or Victor?

February 16, 2010

Almost one year ago I wrote the following related to a story that caught national headlines.  Tim Masters – wrongly imprisoned was angry and bitter.  Then I wrote:

As I rose this a.m. – checking e-mail, CNN – just checking in with the world I was faced with another article on Tim Masters – the Fort Collins, Colorado man who was wrongly imprisoned for 9 years.  This must have been an eternity, especially for an innocent man.  Having spent time in federal prison (justly deserved – as I was guilty), I know that prison can change you.  But, as a business ethics and fraud prevention speaker, it wasn’t the wrongful imprisonment that caught my attention, it was the lead line of the article.

CNN’s writer states:  “Tim Masters squarely blames Fort Collins, Colorado, police and prosecutors for his inability to land gainful employment and for his not having a wife and kids at this stage in his life.”  The full CNN article can be found here.

Today, February 16, 2010 – some 10 days short of a year – CNN reports that Tim Masters may never get his life back (not completely), but $4.1 million as a settlement of a suit for wrongful imprisonment helps.  CNN reports:

It won’t make up for almost a decade of imprisonment, but a $4.1 million settlement is a “good start,” one of Tim Masters’ attorneys said Tuesday.

The Larimer County, Colorado, Board of Commissioners voted earlier Tuesday to settle a lawsuit that Masters filed after a judge exonerated him on a murder charge that put him behind bars in 1999.

“There’s no dollar figure that’s going to give him back his 10 years,” said David Wymore, one of the attorneys who represented Masters in the case. “Tim just wishes this never happened to him, but it did.”

Masters’ co-counsel David Lane emphasized there is still a lawsuit pending against the city and that Tuesday’s settlement represented only a “good start” to compensating a man who was “framed for a crime he did not commit.”

One year ago I wrote – Every choice has a consequence.  There must have been reasons that Tim was considered a suspect in the first place.  Not that it was his fault, but evaluating those actions (way back then) might prove to be powerful lessons to youth today.    Tim has a powerful story.  He can have an impact.  He will be heard.  The power to reach out to others and help them discover what and/or who they are and how their choices can shape their life is powerful.

I hope that as the issues with his suits against those involved in his wrongful imprisonment wind down that Tim can find some peace and channel his energy into using his experience to help others.  Tim has been a victim of a judicial system gone bad.  Yet, Tim has also emerged victorious in that truth came to light and (in a sense) he’s having his day in court.  No…money cannot replace the time lost, but then was it lost or has his experience created a foundation for him that can help others?

Tim…are you a victim or a victor?  Money aside…which is it?


Jailhouse Lawyer strikes again! Michael Ray has former inmate client case gain national attention

February 12, 2010


A now-famous “Jailhouse Lawyer” who gained national attention in 2008 when he took a fellow inmate’s case all the way to the United States Supreme Court has had lightning strike again in the legal arena.

Michael Ray, of Myrtle Beach, South Carolina, who was nearly charged in 2008 with an “unauthorized practice of law” violation by South Carolina Attorney General Henry McMaster for his participation in the Supreme Court case, has had yet another of his former inmate clients’ cases gain national attention.

In 2009 the Fourth Circuit Court of Appeals in Richmond decided to consider the appeal of Timothy Rice of Greenville, South Carolina who was charged in a drug and gun conspiracy indictment in 1990. After several U.S. Supreme Court rulings relating to what defined “the use of a firearm” in relation to a drug trafficking crime, Ray petitioned the South Carolina District Court in 2008 to reduce Rice’s sentence, based on the fact that Rice did not “use” the weapon which was in his home at the time of his arrest. The U.S. Attorney’s Office in Greenville supported Ray’s argument on Rice’s behalf when they agreed with Rice’s claims at the District Court level, and moved to vacate his sentence and have him re-sentenced.

Much to the amazement of the litigants, Rice’s original trial judge, the Hon. G. Ross Anderson of Greenville found against Rice and opined that his original finding was correct when he found that Rice did “use the weapon” in relation to the drug crime.

Rice appealed and the Fourth Circuit then appointed Professors Sean Andrussier and James Coleman, Jr. of the Duke University School of Law, along with their fourth-year law students to usher the appeal through their Court. Andrussier has maintained contact with Ray while briefing Rice’s case and the Court has set oral arguments for March 23rd. Ray hopes to be in attendance in the Richmond courtroom when the case is heard.

Ray was notified late last year that the American Bar Association will be featuring him in an upcoming article series in their ABA Journal publication based on his prior accomplishments as a “Jailhouse Lawyer.” In 2008, Ray was the first non-attorney to author a successful certiorari petition in the U.S. Supreme Court since 1969. As a result of the feat, he received worldwide media attention, including coverage by CNN, the BBC and the Washington Post. The ensuing press coverage caught the attention of Attorney General McMaster in South Carolina, and he investigated Ray’s legal activities, but was dismayed to eventually learn that Ray was permitted under federal law and Bureau of Prison’s regulations to assist and prepare the fellow inmate’s certiorari petition.

Upon his release from federal prison in 2008 Ray vowed that he had “officially retired” from his criminal ways, and to date he has remained crime-free and is working to complete his five-year term of post-release supervision.