Dan Frishberg apparently in violation of SEC order not to offer Investment Advice. Will there ever be Justice in this case?

November 6, 2012

Hello everyone Dan, here. How often do you hear yourself saying “no I haven’t looked at that yet, but I’ve been meaning to?”

Thus began an email written to my by none other than Dan Frishberg.  Yes, Dan Frishberg of disgraced BizRadio fame, the same Dan Frishberg that is banned from the SEC in offering investment advice…not that it seems the SEC has any teeth when it comes to Dan and his continued radio commentary.

I just read yet another email from a frustrated trader telling me that the trading techniques, the pattern recognition software, or the black box strategies that he believed in are simply not working.

Wow…again I’m confused.  You received “yet another email from a frustrated trader” – but Dan you’re not supposed to be offering investment advice so why would you be receiving any emails from traders?  What am I missing here?

Brokers are telling their customers to ignore their losses and hang on, but that’s what they always say. Sometimes that advice works, but it has also resulted in some of the biggest losses in the past twenty years.

Oh my…”some of the biggest losses in the past twenty years” – wonder if that isn’t exactly what happened to people – good folks who couldn’t afford to lose – when they listened to your line about BizRadio and why they should invest in you.  Dan tell me – if they lost in you, why should they now listen to you – especially when you’re not supposed to be offering investment advice?  Damn this perplexes me!

One listener said he has finally realized technical analysis doesn’t work. This isn’t true, the current price is unquestionably a key part of the story but this is only part of it.

Only part of the story…seems that’s a mantra for you.  Has anyone who invested with you in BizRadio ever gotten the truth – the full story or even as much as an apology?

The paradox of investing is – it’s easy to make money when you stop searching for the easy answer.

Yet you and Al Kaleta offered “easy answers” to investors who by all accounts were defrauded.  Have you made restitution?  Have you made it easy for them to recover their monies?

Instead, get an update on what’s working now — the most up to the minute insight into the trends, turning points, and my best stock and option trade ideas in my all new newsletter, Whats Working Now.

You do have a big set of (whatever)…get “my best stock and option trade ideas” – good lord is that not in direct violation of the SEC requirement that you not offer investment advice?  Justice?  Doesn’t seem to be any here!

CLICK HERE – (I disabled this link as I’m not giving Dan Frishberg a link from my blog)

DANIEL FRISHBERG
THE MONEYMAN REPORT
themoneyman.com

YOUR COMMENTS ARE WELCOME!


Victimized by a Ponzi Scheme – Thomas Mitchell sentenced to 9 years in prison, but what about the Victims?

August 19, 2011

What is the impact when a fraud is perpetrated and the possibility of recovery is dismal?  How do people deal with the emotional impact of distrust created when scammed?  Those questions are central in the recent sentencing of Thomas Mitchell who ran a 15 year Ponzi scheme targeting 150 retired train and bus drivers in L.A.  Sentenced to 9 years in prison, Mitchell will be facing his consequences, but what about his victims?

Excerpts from a CNN article state the following:

Even after the man who stole 67-year-old Frances Wills’ entire life savings was sentenced to nine years in prison, she still didn’t feel as if justice had been served.

Mitchell will begin his sentence on Sept. 23. But it may take longer for Wills — who still can’t sleep at night or stop crying — to move on.

“I’m still hurting inside,” she said. “Nine years is not enough for what he’s done to all these people. We want him to suffer like we suffered.”

“It looks like there’s just no money to be had, so there’s nothing we can do,” said Anand. “It’s sad because many of these people are in terrible, terrible circumstances.”

“I used to get up at 2:30 a.m. to get to work driving my bus,” said Wills, who lost the $156,000 she had saved from her job as a Long Beach Transit bus driver for 23 years. “And then for him to just take it out of greed — I want to know: What did he do with our money?”

The judge at Mitchell’s sentencing invited victims to tell their stories in court. One woman took 30 pages of notes with her and didn’t leave until she was completely done. Others were such emotional wrecks they couldn’t stand to address the court.

“The whole courtroom was full of tears,” said Wills. “All Mitchell did was sit there and look stupid. There were a lot of people in there who wanted to slap him upside the head.”

According to court documents, Mitchell promised his clients returns of up to 12.5% on their investments to lure them in, but would then only invest “a miniscule fraction” of their money. He would make monthly payments to keep his clients from worrying — and which many used for living expenses.

Notice one of the biggest evidences that a fraud is happening is an UNREASONABLE PROMISE.  In the lectures I give on fraud prevention, I generally share that victims fall into the PIT.  That means the first part of the PIT is an Unreasonable PROMISE.  Mitchell promised his clients (victims rather) returns of up to 12.5%.  That’s a NEON sign flashing SUCKER I’m ABOUT TO ROB YOU!

But Mitchell meanwhile used the rest of the money his clients had invested for himself. By the end, he didn’t even have enough money to pay his victims the monthly stipends.

Wills relied on those monthly checks from Mitchell. When they stopped coming, she had to sell her home and move into a mobile home. She can’t afford to pay her bills or fix her broken-down car. And she had to apply for food stamps a few weeks ago and now asks her children to help her out.

Some of the other victims duped by the Ponzi scheme include Bobby Bradley, a 70-year-old retired bus driver who lost his life savings of $215,000 and is now looking for work again.

An MTA service attendant, Charles Black, said he watched 23 years of his life go down the drain when he found out his entire retirement stash — $250,000 — was gone.

Mitchell’s own cousin, Robbie Gilbert — who lost $150,000 in retirement savings to Mitchell — wasn’t able to make it to the sentencing. But she said the fact that he will be behind bars for the next nine years is enough to ease her anger for the time being.

There are three components of most frauds from the perspective of the VICTIMS:  (1) Promise; (2) Illusion and (3) Trust.

Let’s look at what was reported and see if we can find those components.  ILLUSION – according to reports Mitchell used funds from other victims to pay earlier victims creating the Illusion that there were actually returns from investments taking place.

Ah, but the hook that gets VICTIMS in – in the first place – is the PROMISE.  Here the promise was a return (plus principle) of up to 12.5%.  I can’t speak to why…but in every case it seems clear that “investors” seem to gravitate to something that “others can’t have” – some call it greed.  I think, rather than greed, we have a psychological desire to be above average and if someone offers something that seems real that is “off limits” to the average guy…then we are more apt to bite.  Guess it’s DNA to want what we can’t or shouldn’t have…just think of the apple.  (Some readers will get that!)

Now, let’s be honest.  A PROMISE of a 12.5% return is not reasonable and ANY PROMISE of a guaranteed return should give us a moment to pause and investigate further!

The funny part about a Ponzi Scheme is that the ILLUSION that supports the PROMISE actually creates the TRUST needed to perpetuate the scheme.  More times than not, the “investors” VICTIMS actually are the ones that turn others on to the “scam” without having any knowledge that they are luring others into the trap!

The Ponzi scheme only collapses when the source of funding dries up.  Most of the time, the scheme gets so large and top heavy (the need for additional funding becomes so great) that it collapses on itself.

So…the FBI suggests the following which is worth repeating:

So how can you avoid being victimized by a Ponzi scheme? A few tips:

  • Be careful of any investment opportunity that makes exaggerated earnings claims.
  • Exercise due diligence in selecting investments and the people with whom you invest—in other words, do your homework!
  • Consult an unbiased third party, like an unconnected broker or licensed financial advisor, before investing.

If you were victimized by Thomas Mitchell and have wisdom to share with others about how to avoid being scammed, please share!

YOUR COMMENTS ARE WELCOME!


Convicted Ponzi Fraudster Nevin Shapiro provides a Tsunami of Evidence against the University of Miami Football program…

August 17, 2011

Talking about going from “FAN” to folly…Nevin Shapiro is squealing like a stuck pig in his allegations regarding his actions and wrong doing in the University of Miami football program.

Feeling abandoned by the U of M program in his conviction for his massive Ponzi Scheme…Shapiro is now speaking out loudly from his Atlanta prison cell suggesting the U of M program might face the “death penalty” as his hand.  The question is – is any of this real?

In an interview:

Shapiro said for the first time that not only was it players who sought favor with him, but also Hurricanes football staff was involved. According to Shapiro’s attorney, Maria Elena Perez, the information first came out under questioning by federal officials and bankruptcy trustee attorneys.

Shapiro is at the heart of an NCAA investigation and his involvement with the school dates back to 2001-2002. Shapiro’s attorney has claimed that he provided UM players with the use of a yacht and various other favors.

Shapiro said he gave money, cars, yacht trips, jewelry, televisions and other gifts to a list of players including Vince Wilfork, Jon Beason, Antrel Rolle, Devin Hester, Willis McGahee and the late Sean Taylor of the Washington Redskins.

Shapiro also claimed he paid for nightclub outings, sex parties, restaurant meals and in one case, an abortion for a woman impregnated by a player. One former Miami player, running back Tyrone Moss, told Yahoo! Sports he accepted $1,000 from Shapiro at about the time he was entering college.

QUESTION:  What do you think about Nevin’s allegations?  Is he trying to gain favor by cooperating in a federal investigation (and thereby reduce his sentence)?  Do you think there is validity to his allegations?

COMMENT: One interesting aspect to Shapiro’s claims is that they would be consistent with the behavior of a Ponzi fraudster.  Most fraudsters tend to flaunt their ill gotten wealth as the reality is what they have is valueless to them since it cost nothing to begin with.  Most importantly, the fraudster is flaunting money in order to meet a need or feed ego.  So…not having the facts (which will come out) I have a sense that Shapiro’s claims may, at least in part, be true.

Interesting links:

https://chuckgallagher.wordpress.com/2010/05/11/another-ponzi-scheme-nevin-shapiro-from-the-fbi-website-no-less/

http://content.usatoday.com/communities/campusrivalry/post/2011/08/miami-athletes-cash-gifts-ponzi-scheme/1

http://galvestondailynews.com/ap/ee9797/

http://www.miamiherald.com/2011/08/17/2362972/accused-ponzi-swindler-nevin-shapiro.html

http://www.miamiherald.com/2011/08/17/2364074/questions-arise-as-um-reels-from.html

YOUR COMMENTS ARE WELCOME!


Business Ethics: It is really about more than avoiding prison! Is there a little Bernie Madoff in each of US? A Guest Blog by Corey Richardson

July 24, 2011

A “Man of The Age” financier is surrounded by mystery and adoring members of the moneyed elite hungry for some of his wondrous returns. This paragon of the business class with The Midas Touch accepts only a few choice clients who seem to wither in his presence as they deliver their accumulated wealth into his magical hands – no questions asked. The returns are beyond belief, and for very good reasons. Unbeknownst to all, this wizard of the market is juggling fraudulent accounts to pay for his lavish lifestyle. The only trading is from their hands to his. The ruse comes tumbling down and the entire nation is stunned.

The scoundrel portrayed above is Charles Dickens’ character, Mr. Merdle of Little Dorrit, first published in 1857. Dickens foretold the Madoff scandal verbatim in his quintessential corruption tale, but this iniquitous business leader is an age-old archetype, and we, like Dickens, find it easy to vilify him due to the magnitude of his crimes; No stealing a crust of bread for this villain. At its polar opposite, take the “common criminal,” the savage monster seen today in T.V. cop shows, the local news, and innumerable B-movies. This standard is bloodthirsty, drug- crazed, and has a soul as black as night.

Dickens’ work is also replete with such characters.  The beauty of these caricatures is that we cannot find ourselves in either. They conveniently represent “other.” All the while we can sit comfortably in our living rooms with our sense of moral rage because we do not bilk venerable charitable funds and we do not cook meth in our kitchen. Yet, it can be argued that if we truly strive for a better world, then we need to go well beyond the knee-jerk reactions of these scenarios, and find ourselves in the moral conundrums.

Stricter regulations of the financial sector and more accountability, gun control legislation, sensible criminal sentencing laws, affordable drug rehab, etc., are important factors, but are only part of the solution. Even focusing on improvements to education and social services, which have been shown to be extremely important in crime prevention within certain groups, is still only a small part. To thoroughly understand what drives people as different as Kenneth Lay or a Gov. “Blago,” as well as a gun-totting inner-city kid with a pocket full of dope, we must understand root causes of criminal behavior, thus pointing the way for our next generation of leaders- and evaluate ourselves in our own business affairs.

“What causes criminal activity, and. who are these people who commit crimes against our society, such as … ” taking items from work, “fudging” on taxes, paying for non-business activity with a business account, inflating an insurance claim, switching labels at a store, producing unsafe products, “padding” a bill, or any number of violations of legislated standards for personal gain committed by everyday people.

Due to perception, universally known within psychology as the fundamental attribution error, these crimes are given little thought by those who commit them.   Joe Citizen justifies and minimizes these activities as “bending” the rules. And this is where we see the attribution error in effect: we tend to overestimate the role of personal factors and underestimate the “influence of situations in others, and we overestimate the situational factor and underestimate the personal factor in our own circumstances. It is the age-old “We judge others on their actions, and we judge ourselves on our intent.” Or I’m bending the rules, and he is breaking the law.

This phenomenon is not unique to the middle and upper socioeconomic strata, and equally applies to the poor. A drug dealer feels that his activities, though illegal, are still a legitimate means to earn a livable wage within his community.  The same could be said of any accountant or lawyer who “tweak’s” the system to make a little money. So, getting a television set off the back of a truck in the ghetto looks much like another’s decision to not claim income on a second job. It is all about perspective.

As we address the problem of the business class, we can facilitate the much-needed change in perspective with some cold, hard facts. Business leaders do not need to be as extraordinarily crooked as Madoff to affect a, huge societal burden. Study after-study demonstrates that “white collar” or corporate crimes, as well as middle-class crimes, ranging from tax evasion, insurance fraud, price fixing, inventory “shrinkage” (what a euphemism!), etc., weigh much more heavily than the number one Index crime, conventional property crime. Index crimes are known also as “street crimes.” They are highly visible crimes, easy to categorize and count, and are overwhelmingly committed by the poor. White collar crimes, by contrast, are difficult to detect and rarely prosecuted. Still, the economic yearly cost with respect to property crimes of the corporate America are approximately twenty times greater than conventional property crimes of index offenses, or a difference of $200 billion to $10 billion annually.

Having completed a fully accredited MBA program via a distance-based education format, I need to share that – this accomplishment – was done from an 8′ by II’ prison cell.  I was an inmate and like most “on the inside,” I readily justified my criminal acts, which occurred within my professional life, as did the drug dealer or the burglar.  So, as I approached my Business Ethics coursework, I did it with the secure knowledge that I committed a crime. This perspective, and the belief that my professors would judge my answers too with this in mind, gave me a keen eye in studying ethical queries in business.

I believe that when most students answer questions related to ethical foundations or detail their understanding of their own personal values, they do it from a perspective that they themselves could not possibly commit a crime. Such activities, such as smoking pot in the college dorm or not claiming wages from a summer job paid “under the table,” are simply not considered as crimes, which they are. Again the attribution error: “My (illegal) acts are not illegal, and certainly not unethical.

Everybody does it. It is no big deal.” And so forth. To cultivate a true ethical North in business, we must broaden our perspectives, and when an ethical dilemma arises, we can perceive it as such. No different from operations management or strategic planning. An appreciation of multiple perspectives — proffers a grand wealth of insight that will carry our next generation of leaders.

As a convict, my daily life is a direct result of criminal acts related to my work. In my studies, I can clearly see the untold millions that are affected by one unsafe product, but I can also appreciate how one man can justify criminal acts as a bad business decision, rather than a pathological act for profit with no respect for the law. To open the eyes of CEOs early in their training to the easy comparisons between corporate crime and “street” crimes, as well as offer tangible proof of the enormous societal burden of white-collar crime, would be of immeasurable value. In teaching business ethics, we must go well beyond the bland terms and definitions and the prosaic personal litanies of “What I value in the world.” We must make the coursework truly applicable and create managers and business leaders who intuitively understand how ethics within Corporate America are just as important, if not more so, as profit margins and supply chains.

Clearly, when I understand myself, I can understand Bernie Madoff or Kenneth Lay.  I believe the same could be said of us all. The equation is simple: Unbridled Financial Gain plus Opportunity, then Add the Likelihood of Detection and Fear of Prosecution. Embracing the truth of unlawful acts in our everyday lives, be it business or personal, is much harder to do than to merely vilify in a fanciful Dickensian way the corporate or government leader who betrays our trust, or even the dope dealer of the inner cities. But it will help to create leaders who view all of their work and life through a lens of principled behavior. We must begin to see the situational nature of all criminals acts, and therein lies the beginning of meaningful solutions. It is not enough to alter the number of opportunities to steal or the severity of the requisite penalties, but to go further by changing what stealing looks like by different people, changing the perceptions of illegal gains, and infusing the intrinsic value of ethical behavior.

When we see that all of us have a little of Bernie Madoff in us, only then can we begin to view our world more clearly and begin to make authentically ethical decisions as we lead our companies and organizations. We may even make significant changes in our personal lives.

Business Ethics: It is really is about more than avoiding prison.

Corey Richardson Biography:

Corey John Richardson is a former clinician, who holds a Master’s Degree in PA Studies from the University of Nebraska’s College of Medicine (Omaha) and a Bachelor’s Degree in Health Science/PA Certificate from the University of Florida’s College of Health Related Professions (Gainesville). He holds an MBA from Salve Regina University’s Graduate Business School (Newport, RI) and has completed doctoral health science coursework with a focus on prison healthcare at Spalding University (Louisville, KY). Mr. Richardson’s work has been incorporated into criminology courses at the University of Cincinnati and has been included in CURE’s congressional file on correctional healthcare in support of HR 3710. He has performed medico-legal consulting and has legal experience assisting prisoners in various civil and criminal actions. As a pro se litigant, he won a precedent-setting case on appeal against the Kentucky DOC and its Abuse of Power (published at Richardson v. Rees, 283 S.W. 3d, 257). He has also worked as a facilitator in numerous psychotherapeutic and rehabilitative programs.

Mr. Richardson has written widely about prison issues and sobriety for publications such as Spotlight on Recovery, Cell Door Magazine (the official publication of the National Death Row Assistance Network), T’he Kentuckiana News, Perspectives (the official journal of the Association for Humanistic Psychology), The Grapevine (Alcoholics Anonymous’ international publication), The Long Term View: A journal of informed opinion (Massachusetts School of Law at Andover), OUTlooks (Canada’s GLBT magazine), and others. Several of his essays have been published in the book Voices Through The Wall and he won 1st Prize in the Ford Foundation’s 2OO9 national writing competition Think Outside the Cell, published in Love lives here, too. (2010)

Mr. Richardson maintains his writing at coreyrichardson.blogspot.com and may be reached at coreyjohnrichardson@gmail.com. In 2001, he was convicted of crimes related to practicing medicine without a license and served 122 months in the Kentucky Department of Corrections; his supervising physician was given a probated sentence. Mr. Richardson has 13 years of continuous sobriety on July 14, 2011.

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Christopher Blackwell – indicted on Investment Fraud in Colleyville, Texas. Simple fraud will earn a painful consequence!

July 22, 2011

A classic stupid Ponzi scheme!  It has been said that a sucker is born every day, but I still find myself amazed that otherwise intelligent people would fall for something so blatantly stupid as what Blackwell offered to the fine folks in and around Colleyville, Texas.  As a business ethics and fraud prevention speaker and author, I know first hand about what goes on behind the scenes when such a fraud occurs and how folks fall prey to victimization by perpetrators like Blackwell.

Christopher Blackwell, 32, of Colleyville, Texas, has been indicted by a federal grand jury on two counts of wire fraud in relation to an investment fraud scheme he has operated since January 2007. Blackwell was arrested in Phoenix, Arizona, earlier this month. Blackwell remains in custody. A date has not yet been set for his arraignment in U.S. District Court in Fort Worth.

According to the indictment, Blackwell allegedly deceived investors by falsely telling them that he would invest their money in business ventures that would generate a high rate of return, and by fraudulently assuring them that the investments would involve little to no risk. He told investors that their money would be invested in specific business ventures, but when he received investors’ money, he didn’t invest it and instead used most of it for his own personal benefit. On occasion, he would use some of the funds from new investors to make small payments to earlier investors to convince them that their money was generating a profit. However, not all investors received payments from Blackwell and many lost all of the money they invested.

According to the criminal complaint filed in the case, more than 20 victims, suffering more than $4 million in losses as a result of Blackwell’s scheme, have been identified. One investor, identified only by initials, lost all of the $325,000 he gave Blackwell to invest. In fact, after this investor wired the money as directed to Blackwell’s accounts, agents obtained Blackwell’s bank records and were able to determine that Blackwell didn’t invest the money as promised, but instead used it for personal expenditures including automatic teller machine withdrawals, dining and entertainment, luxury vehicle expenses and payments to family and business associates.

In February 2011, the U.S. Securities and Exchange Commission (SEC) filed a complaint against Christopher Love Blackwell, AV Bar Reg, Inc. and Millers A Game, LLC, two entities he controls, claiming that Blackwell enticed investors by telling them that his trading program would generate highly impressive, guaranteed returns of 25 to 30 percent per month with regularity. He falsely claimed these profits were possible because of his academic pedigree, including Master’s and Ph.D. degrees acquired at a prestigious university in Spain (Blackwell holds no such degrees); his extensive experience as a trader (he has little, if any, such experience); and the know-how and connections he acquired while employed by Goldman Sachs and The Bank of Madrid (he never worked at either firm). In March 2011, the SEC and Blackwell and his entities entered into an agreed judgment.

25 to 30 percent per month with regularity?  Really, in this economy people would believe that?  Whatever happened to due diligence?

An indictment is an accusation by a federal grand jury, and a defendant is entitled to the presumption of innocence unless proven guilty. If convicted, however, each of the wire fraud counts carries a maximum statutory sentence of 20 years in prison and a $250,000 fine. Restitution could be ordered.

If you were a victim of this Ponzi Scheme…perhaps you’d comment on the lure Blackwell used to secure your investment.

YOUR COMMENTS ARE WELCOME!


Lorn Leitman, CPA and Attorney sentenced to 17 1/2 years in Federal Prison for a Ponzi Scheme!

July 14, 2011

Lorn Leitman, attorney and CPA, of Miami, Florida, to 210 months’ incarceration for his role in a 10-year Ponzi scheme. In an unusual decision, the court departed upward from a sentencing guideline range of 121-151 months, commenting, “this case is exceptional.”

A federal grand jury charged the defendant with violating the mail fraud statute for defrauding elderly victims and retirees, among others, through the operation of a Ponzi scheme which sought investments in either phantom residential mortgages or a separate venture burdening U.S. military personnel with predatory and usurious loans. The defendant pled guilty to one count of mail fraud on April 6, 2011 and faced a maximum possible sentence of imprisonment for 20 years. Several victims appeared in court to address the impact of the fraud. As one victim explained, losses from the Ponzi scheme forced the end of his retirement and his return to work. He commented, “my dreams are dead.”

The court explained that the decision to sentence above the guidelines resulted from the defendant’s conduct preying upon his closest friends, fellow servicemen, the elderly and retirees, and noted that the defendant breached codes of conduct applicable to members of the Florida Bar and certified public accountants. In addition to the enhanced sentence, the court ordered the defendant to pay $3,308,435.03 in restitution to victims.

OBSERVATION:

From personal and past experience in dealing with fraud and now fraud prevention, the most likely target of those scammed are folks who are close to the perpetrator.  Reality is, in this case, the time in prison will leave Leitman a changed man and the chance of seeing any restitution is slim.

If you were a victim of this crime, please take a moment and share how you were lured into Leitman’s trap.  Your comments may help others recognize and avoid a similar fate.

YOUR COMMENTS ARE WELCOME!


Has Salem Communications finally figured it out? Dan Frishberg “The Money Man” off the Air?

May 16, 2011

At times, as I’ve followed the Dan Frishberg scam saga, I’ve been mystified by how a company like Salem Communications could keep Dan on the air spewing his nonsense all the while knowing that he’s been busted by the SEC for wrongdoing.  Perhaps I’m wrong, but it appears that someone at Salem has finally come to their senses and removed Dan from his lofty broadcast position.

Seems Houston station 1110 KETK was (for all practical purposes) the home base for BizRadio – Dan Frishberg’s company that effectively defrauded millions – most of which won’t be recouped.  The station was up for sale and as of this writing I do not have confirmation of whether that has taken place yet.  But what is clear is that Dan Frishberg is no longer listed in the stations program line up.  The program line up link is listed here:  http://www.business1110ktek.com/  and note…Dan Frishberg “The Money Man” is no where to be seen.

Has Salem come to their senses?  Perhaps they now see that Dan Frishberg is a liability.  There is little doubt, especially in Houston, that Dan Frishberg’s actions which cost investors millions was nothing more than a glorified Ponzi scheme.

Months ago…many it seems, I also reported that Salem Communications had expanded Dan Frishberg’s coverage beyond Houston to Miami’s WZAB 880 AM and Atlanta’s WAFS 1190 AM – as I look at those web sites today I get mixed messages.

First – WAFS 1190 AM in Atlanta does NOT show Dan Frishberg on their program line up.  Here’s the link:  http://biz1190.com/schedule/ but he is listed as one of their personalities.  Which is it – is he on or is he off?  Here’s the personality link:  http://biz1190.com/personalities/

When it comes to WZAB 880 AM  in Miami – is has been reported that Dan Frishberg was preparing to move to Miami as it was a bit too hot in Houston for him to continue his financial connections.  Perhaps he felt the pickins were better in Miami.  Either way, WZAB still shows Dan Frishberg in the program line up.  Here’s the link:  http://www.880thebiz.com/schedule/

Kinda interesting – here’s what it says about Dan Frishberg on the WZAB site:  “Dan Frishberg grew up in New York and has spent over 40 years studying money and the markets; especially the people who make up those markets. His life’s work has been to strip away all the jargon and finance babble. He talks about money in a unique language: plain English. Frequently appearing as a guest expert on CNBC television, Dan brings unique insights and a down-to-earth approach to investing.”

Perhaps it should say -

Dan Frishberg grew up in New York and has spent over 40 years studying money and the markets; especially the people who make up those markets. His life’s work has been to strip away all the jargon and finance babble, as well as people’s money as he has been charged by the SEC with investor fraud where Texas residents lost millions. He talks about money in a unique language: plain English, and sometimes that talk is so slick that it is quite persuasive even though Dan’s intent may not be for the consumers good. Frequently appearing as a guest expert on CNBC television, Dan brings unique insights and a down-to-earth approach to investing, which he is now banned from by the SEC.  We are proud to feature on our station a person who no longer has the right to offer investment advice, but has a clear way of communicating financial psycho babble so that investors can have no idea what’s really happening to their money.

Seems that the above is a bit more honest and transparent…but who am I to say…?

OOPS PROGRAM NOTE:

According to “The Money Man” website the following has been posted:

The MoneyMan Report Contract with KTEK Houston has ended. The station is currently in the process of being acquired by new owners. We expect the show to be back on the air in Houston in a few weeks.

In the meantime, Texas listeners can catch Dan on the live stream at 7am Central time each morning, by clicking on this link. Or simply click the “Listen Live” tab and tune into 880 The Biz, Miami.

Perhaps there is more to the story…stay tuned and let’s see what shakes out.  Maybe Salem isn’t that smart…maybe they really don’t care who broadcasts on their stations – even a person who’s been banned from investment advice by the SEC – Dan you really are “The MoneyMan”.

YOUR COMMENTS ARE WELCOME!


Dan Frishberg “The Money Man” Charged by the SEC with Fraudulent Conduct! BizRadio’s Scam Artist Exposed…

March 25, 2011

To be honest, as I pen this latest blog entry, there is no joy.  Yet, it is not a surprise either.  Dan Frishberg, despite his puffery and position – claiming to the “the Money Man” has finally been charged by the SEC for his role in defrauding numerous investors out of millions.  Today many now know that what has been claimed about Dan is true.  He has not acted in the best interest of his clients and as a result – one of the outcomes is that Dan “The Money Man” Frishberg is barred from association with any investment adviser or certain other registered entities.

The SEC News Release reads as follows in its entirety:

Washington, D.C., March 25, 2011 — The Securities and Exchange Commission today charged Houston-area businessman Daniel Frishberg with fraudulent conduct in connection with promissory note offerings made to clients of his investment advisory firm.

The SEC alleges that Frishberg’s firm Daniel Frishberg Financial Services (DFFS) advised clients to invest in notes issued by Business Radio Networks (BizRadio), a media company founded by Frishberg where he hosts his own show under the nickname “The MoneyMan.” Frishberg failed to tell his clients about BizRadio’s poor financial condition or his significant conflicts of interest with the note offerings that helped fund his salary at BizRadio.

Frishberg agreed to settle the SEC’s charges by paying a $65,000 penalty that will be distributed to harmed investors. He will be barred from future association with any investment adviser.

“Contrary to his obligations as an investment adviser, Frishberg approved risky investment recommendations to his clients without ensuring that the risks and conflicts were properly disclosed,” said Rose Romero, Director of the SEC’s Fort Worth Regional Office. “Frishberg personally benefitted from the questionable investments that were recommended to his clients.”

According to the SEC’s complaint filed in federal district court in Houston, at least $11 million in promissory notes were issued by BizRadio and Kaleta Capital Management (KCM), which is owned by Frishberg’s associate Albert Fase Kaleta. Frishberg and Kaleta jointly controlled BizRadio.

The SEC charged Kaleta and his firm with fraud in 2009, and the court appointed a receiver to marshal the assets of KCM and relief defendants BizRadio and DFFS.

The SEC alleges that Frishberg authorized Kaleta to recommend the notes to DFFS clients, and clients were not provided with critical disclosures. Investors were not told of BizRadio’s poor financial condition and the likely inability of KCM and BizRadio to repay the notes. Nor were investors informed about Frishberg’s significant conflicts of interest in the note offerings because the proceeds funded his salary as a BizRadio talk show host.

The SEC alleges that Frishberg chose Kaleta to recommend the BizRadio notes even though he was aware of complaints about Kaleta’s lack of truthfulness in sales presentations regarding other investments.

The SEC’s complaint alleges that Frishberg violated Section 206(2) of the Investment Advisers Act of 1940 and aided and abetted violations of Sections 206(1) and 206(2) of the Advisers Act.

Without admitting or denying the SEC’s allegations, Frishberg consented to the entry of a permanent injunction against these violations and to pay a $65,000 penalty. Frishberg consented to the establishment of a fair fund for the distribution of his penalty to harmed investors, and agreed to be barred from association with any investment adviser or certain other registered entities.

# # #

For more information about this enforcement action, contact:

Rose Romero
Regional Director, SEC’s Fort Worth Regional Office
(817) 978-3821

Stephen J. Korotash
Associate Regional Director, SEC’s Fort Worth Regional Office
(817) 978-6490

WHAT DOES THIS MEAN?

Well for starters…those who lost a whole bunch of money and thought they might get it back…well think again.  Dan’s $65,000 penalty is a small price to pay for the $11 million fraud.  To be clear, I have not had any inside information, but I suspect that Dan’s out of money otherwise I suspect the SEC would have exacted a larger fine as part of their role is to protect the public.  Oh well…

CRIMINAL INDICTMENT ON THE HORIZON?

Rose Romero, Director of the SEC’s Fort Worth Regional Office stated, “Frishberg personally benefited from the questionable investments that were recommended to his clients.”  So does this mean that he could be the target of a criminal indictment?

So we are all clear, the SEC has NO CRIMINAL enforcement authority – only civil.  Therefore the actions of the SEC are likely the best they could get under the circumstances.  Effectively they squeezed blood out of the turnip and barred Dan from any role as an investment advisor.  Now regarding criminal…well, as I’m told the statue of limitations is longer for any criminal issues, so I suspect that the US Attorney, FBI or others may still be looking into this case and (my opinion here) it might hinge on what Dan does next.  For example, if Dan were to “man up” and quit his radio show where he is still huffing and puffing about his wisdom…he might avoid more consequences.  On the other hand…should he stay on the radio and continue his advice (although who would want to listen)…then there might be more interest in criminal charges.

My guess is that if there are enough folks who have been harmed by the talented Mr. Frishberg who complain to the US Attorney or FBI, perhaps law enforcement will find the wisdom and logic to continue to investigate Dan Frishberg and extract consequences more fitting with his crime (that he did not admit).

PUBLICITY

One thing that Dan Frishberg liked is publicity…in fact, it seemed he craved it.  Well, he’s getting what he liked as he’s being reported on in the Wall Street Journal and other major news outlets.  Wonder, and I’ve got to ask, if Maria Bartiromo is going to interview Dan “The Money Man” again…or if she has finally figured out that is was all smoke and mirrors?

WANT YOUR VOICE HEARD?

If you feel that your voice needs to be heard here are two US Attorney’s that could be contacted – one in the Southern District of Texas (Houston Area) and one in the Northern (Dallas).  I suspect the Houston US Attorney is the one who would have the most interest, but since the SEC in Fort Worth brought the charges…I’m providing both.

José Angel Moreno, US Attorney Houston
P.O. Box 61129
Houston, TX 77208
(713)567-9000

James T. Jacks, US Attorney Dallas
1100 Commerce Street, Third Floor
Dallas, TX 75242-1699
(214)659-8600

SHARE YOUR VOICE -

WHAT DO YOU THINK ABOUT THIS SEC OUTCOME?


Dan Frishber’s BizRadio: Tax Relief for Scammed Investors – Maybe? Section 165

January 3, 2011

So…I’m not a tax adviser!  I used to be, but frankly screwed that up many years ago based on the unethical choices I made.  My choices cost me my license, my career and earned me a coveted (just kidding) spot in the federal pen!  How’s that for a disclaimer?

That now said, I know many of you who have followed my work on the Dan Frishberg – BizRadio scam have lost substantial sums of money with little hope of any significant recovery.  So, as the pages of the year 2010 turn into a new year – 2011 – the question is – what kind of tax relief can you expect to receive considering your losses at the hand of Dan “The Money Man”?

Last year this time I was reporting on the same thing, but this time it was for those who had losses from other Ponzi schemer’s like Bernie Madoff and Gordon Grigg.  So let me dredge through some past information and see if this might be of help to the Frishberg’s victims.

As a busines ethics and fraud prevention speaker, I believe in giving credit where credit is due.  Today I received a response to two blog postings I made by Moira Souza Shiver who reminded me about a provision of the Internal Revenue Code that, in many ways, is little known.  Her website can be found here and it states the following:

My name is Moira Souza-Shiver and I am the founder and President of MSS Advocacy Group, LLC (MSSAG).  I’m extremely proud to have established an organization whose main mission is bringing help to victims by attaining the assistance they deserve and were promised.  Working in the investment fraud industry for the past 10 years has created in me a passion to fight for what’s right and even more, has instilled in me a deep respect for victims and the suffering they endure.

My decision to establish MSSAG came from what I describe as a desperate need within the 165 industry.  After serving 6 years with JK Harris 165 Services, LLC, it was clear there was little being done in the form of victims’ advocacy and an organization was needed to help alleviate their suffering.   Believing that investment fraud victims deserve the same rights allotted to other victims, MSSAG was born.

MSSAG is committed to doing everything it can for this cause, including aligning itself with other organizations and advocates that can provide complimentary assistance through established programs.  By combining forces with these types of organizations, we intend to maximize all available sources of assistance and bring hope back to victim’s lives.

Now, before you assume that I have a financial interest in promoting Moira or Section 165, let me clarify that I do not.  But like Moira, I do have an interest in making sure that all aspects of ethics and fraud (including prevention and recovery) are explored.

An excellent article was written in the Journal of Accountancy related to Section 165.  A portion of the article is reproduced below:

When a client is the victim of fraud or embezzlement, for example, CPAs can reduce the client’s ordinary income, recoup any previously paid taxes and minimize future tax obligations by using IRC section 165(c)(2).

Be aware that CPAs who prepare and defend an investment loss deduction under IRC section 165(c)(2) must meet numerous technical requirements and make certain determinations based on examining the circumstances. Section 165(c)(2) deductions also frequently prompt IRS oversight, and in many instances, the standard tax preparation software does not adequately address this deduction, since it’s generally geared to the more familiar section 1211 capital loss treatment. But while section 1211 is an appropriate treatment, using it may result in clients’ paying more taxes than are required.

If a client suffers an investment loss as a result of a fraudulent investment or unethical sales practice, probably the most prudent action a CPA can take, even though there is no requirement to do so, is to suggest the client first discuss it with his or her lawyer. Taxpayers are required to take reasonable action to recover a loss and not doing so disqualifies it for section 165(c)(2) treatment. If the lawyer feels there was malfeasance and it is not practical to pursue recovery due to a lack of recoverable assets, the cost of litigation or other reasons, the loss probably is deductible in the current period. Losses from embezzlement, blackmail, kidnapping for ransom, burglary, larceny, extortion and threats also may qualify for section 165 treatment.

A WORD OF CAUTION:

If you’re considering taking advantage of this section of the Internal Revenue Code – FIND A COMPETENT ADVISER.  Not every CPA or tax specialist is competent to assist you with this complicated section of the Internal Revenue Code.  I strong suggest that you find someone who will provide references and that you verify the results those references received.  DON’T BE SCAMMED TWICE!

Here are some other links that were provided to me that might be of help as well.

http://www.washingtonpost.com/wp-dyn/content/article/2009/04/04/AR2009040404341.html

http://www.journalofaccountancy.com/Issues/2005/Apr/MaximizeTaxBenefitsUnderIrcSection165.htm

http://www.traderstatus.com/section165theftloss.htm

http://www.taxreliefinc.com/165services2.htm

https://chuckgallagher.wordpress.com/2009/03/02/madoff-grigg-dryer-investment-fraud-victims-tax-relief-through-irc-section-165-c2/

http://www.crimes-of-persuasion.com/Victims/theft_loss_deduction.htm

Thanks to Vince Rowe for reminding me of the tax provisions that might help the Frishberg victims.  By the way, if any of you have a recommendation of someone who is competent to provide tax help in this matter in the Dallas or Houston area…feel free to respond to this blog and I’ll be delighted to share.

YOUR COMMENTS ARE WELCOME!


Dan Frishberg – BizRadio: Salem Communications settles Lawsuit with Rehan Siddiqi

January 3, 2011

It’s been almost a year since the world that Rehan Siddiqi lived in was dramatically changed.  Kicked off a radio station that he was joyfully buying, he found himself embroiled in a meltdown of major proportions created by BizRadio’s leader Dan Frishberg – also known as “The Money Man” – although it would appear that Dan’s money to support BizRadio was nothing more than an elaborate scam.

As a refresher, Rehan Siddiqi had entered into an agreement to lease/purchase the former station that BizRadio was aired on in early January 2010.  Asia Vision took the air the first of January on what Rehan thought was their new home.  Dan Frishberg took BizRadio to another station – one that cost him less and seemed to be a solution for the financial failure he was experiencing.

ONE MONTH…that’s all it lasted.  Frishberg (now well documented) couldn’t meet the financial obligations on the new station (he had no credit) and the result – SIDDIQI WAS KICKED OFF HIS NEW STATION.

The result was a lawsuit filed by Rehan Siddiqi for $18 million in damages against multiple parties including but not limited to:  Dan Frishberg, Elisea Frishberg, and Salem Communications.

Today, now almost a year later, this new year is starting with some good news for Rehan Siddiqi.  From reliable sources, it appears that Salem Communications has settled their issue with Siddiqi and as a result – Salem Communications – is no longer a party to the lawsuit filed by Rehan Siddiqi / Asia Vision.  What are the terms of the settlement – I don’t know.  But, this settlement opens the door for one major step forward with respect Dan Frishberg and his issues with the SEC (which still seem to be unresolved – and a lot of folks are wondering why) that is the sale of the station can now move forward with the Siddiqi lawsuit settled.

To be clear – Siddiqi’s settlement with Salem Communications does not mean he has settled with Dan Frishberg or Elisea.  The lawsuit for tortious interference against them still stands – although collecting from Dan or his wife should Siddiqi win the suit might be difficult at best.

I suspect that, based on Tom Taylor’s efforts (the SEC Receiver) the sale of the station will move forward fairly quickly in early 2010.  Who will buy it?  That remains to be seen.  Salem is an obvious candidate as they expressed interest in the station.  Likewise, Siddiqi, at one time, was interested.  Either way, whom ever buys the station, it would appear that this chapter might soon come to an end.  For the investors, however, I don’t suspect that the money from the sale will come close to making you whole as you look at your losses.

THE NEW YEAR’S QUESTION:

With things now open to move forward with the sale of the station, what action is the SEC going to take with respect to Dan Frishberg?  There seems to be sufficient evidence that he was an active part in the defrauding of numerous investors – most of whom will not come close to getting their principle losses back.  Al Kaleta lost his license as an investment advisor.  Dan Frishberg, on the other hand, has not.  Why?

Frishberg – “The Money Man” brand – is expanding with the conversion of Salem Stations to talk business stations, so it seems that Dan buys his suits with kevlar material…as thus far nothing seems to stick to him when it comes to law enforcement – either his investment license (SEC authority) or criminal – FBI, US Attorney or others.  Perhaps 2011 will bring some resolution to this sad affair.

PRIOR POSTS ARE HERE:

https://chuckgallagher.wordpress.com/2010/02/12/biz-radio-and-rehan-siddiqi-when-the-dust-clears-will-siddiqi-be-a-victim-or-a-victor/

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

Meanwhile – YOUR COMMENTS ARE WELCOME!


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