BizRadio forced into involuntary bankruptcy? – The empire that Dan Frishberg built is collapsing!

April 4, 2010

Every choice has a consequence.  From some time now I’ve been reporting on BizRadio – a series that has taken twists and turns that I did not expect at the beginning.  The only thing that made sense – and still does today – is that the choices that Dan Frishberg, Elisea Frishberg, and Albert Kaleta made have taken a dramatic negative turn – and I might say much to the detriment of many investors, Ron Crider and Rehan Siddiqi.

Now come Florence Reiley, Kevin Deering and Stephen Cook requesting the US Bankruptcy Court in the Southern District of Texas to force BizRadio into a Chapter 7 bankruptcy.

The filing can be found here.  Likewise, a recent Houston Chronicle article on the same topic can be see here.

According to the Houston Chronicle article:

Meanwhile, BizRadio CEO Daniel Frishberg is battling with the receiver appointed in the SEC case. The SEC sued BizRadio co-founder Albert Kaleta and his investment firm, Kaleta Capital Management, claiming they mislead investors about the sale of $10 million in promissory notes. The receiver was appointed to recover money from investors, primarily from BizRadio and Frishberg’s own investment firm.

Even as he was squaring off with the receiver, Frishberg sold BizRadio’s Houston station, KTEK 1110 AM, to Salem Communications for $3.7 million, which includes the cancellation of a $1.26 million loan. BizRadio bought the station from Salem for $7.6 million just two years ago.

Now I’m not an attorney, but it doesn’t take a legal scholar to know that there are a long list of people who legitimately would lay claim to any monies that Frishberg receives from the sale (purported sale – I still don’t have that figured out completely) of BizRadio and/or it’s assets.

Let’s see…there are:

  • The investors who thus far have lost their money with no true prospect for recovery;
  • The SEC Receiver who is trying to attach assets;
  • Rehan Siddiqi who was duped for $180,000 and the BizRadio ship was sinking;
  • Salem Communications (who as best I can tell) was still owed for the purchase of the station from Frishberg (which is why I can’t piece together the pieces of how they would pay him for what it appears he owes them for)
  • Employees who, by the droves, have been let go – many of whom say they are owed back wages; and
  • (this is a guess), but knowing what happens when a business fails, I would guess that BizRadio owes back payroll taxes – as typically since they are due after the fact, they are the last thing to be paid.  (Keep in mind, this is speculation and not founded on credible inside information).

I am assuming that the folks who filed for BizRadio to go into bankruptcy were doing so in an effort to position themselves to gain bankruptcy assets.  Not a bad move.

ON ANOTHER NOTE…I’ve conducted several interviews that soon will become part of this series – so stay tuned.  Of course…YOUR COMMENTS ARE WELCOME!

Barbara Doreen House vs. Daniel Frishberg, BizRadio and crew – A Lawsuit for Fraud and more…

April 2, 2010

UPDATED – 4-3-2010

A mentor of mine had a favorite saying, “No good deed goes unpunished.”  I have to admit I hated that phrase, but based on the comments I’ve been receiving this case is a real quandry.  Personally, I have no position on the case as my objective is to open the doors for discussion.  However, if you look toward the end – there is another comment that was made that I’ve elected to include in the blog without, of course, exposing names.

On July 24, 2009 – Barbara Doreen House filed a lawsuit against Daniel Frishberg – BizRadio – Elisea Frishberg – Albert Kaleta and others for fraud and misrepresentation, breach of fiduciary duty, and conspiracy.  The House complaint was amended in a filing on February 9, 2010.

Her complaint is here:  Plaintiff’s First Amended Petition

The response from the Daniel Frishberg, Elisea Frishberg, Albert Kaleta etc. is here:  Amended Answer and 3rd Party Action

Is this the beginning of what might be many lawsuits related to the losses investors have experienced?  Or is this that act of someone who made ineffective choices?

Read the Petition and the Answer.  I’d would appreciate your comments and opinions.


I find the factual scenario interesting in the manner that Frishberg and his wife allegedly infiltrated and induced that amount of money to be invested.  Moreover, it appears that there is a common theme which seems to be occurring with what investors are told about their investment, and the manner in which the money is actually invested.  It also is clear that this is the tip of the iceberg, so to speak.  I wouldn’t be surprised at all if a bigger Ponzi scheme comes out soon.  It just doesn’t make sense that Frishberg couldn’t return an investor’s funds at this small a level, particularly if the funds he and his companies manage are so much larger. Why are the Defendants fighting the litigation so vigorously instead of just returning the money…if it really is a legitimate investment, wouldn’t the funds still be somewhere reachable?  Seems to me that the Defendants are fighting the lawsuit so vigorously because they cannot return the funds.

Perhaps Dan, Elisea, Al and the other entities were not at fault.  Perhaps “No good deed goes unpunished,” as evidenced by this comment made anonymously.

Talk about fraud! In this case, Kaleta and Frishberg are the good guys. Harvey House is the rat. The law suit is crammed full of lies and misrepresentations. Barbara has the emotional maturity of a 2 or 3 year old child and can be manipulated on a whim. This is a fact. DFFA did their best to protect her and her money with income producing bonds, at least in the beginning.

Barbara was not capable of living alone or protecting herself financially. She was moved into a very nice home which she could easily afford on a sustainable basis based on her interest income. Harvey the limo driver saw an opportunity to marry into big money and he took it. Barbara’s money was squandered within a couple years by Harvey.

Very sad story for what should have been a nice life for Barbara.

YOUR COMMENTS WELCOME…and I wonder if there are any other investor lawsuits that have been filed?

BizRadio Marketing MasterMind Clinic – A legitimate sales seminar or a sham to lure fresh unsuspecting investors?

February 25, 2010

As a former Sr. VP of Sales and Marketing in a public company I understand marketing.  I understand that BizRadio provided valuable information and likely was a feeder source for investors who felt that Daniel Frishberg could help them watch “their money grow.”  After all, Daniel is “the money man!”

But, let’s look at the facts (and for sure all the facts aren’t out on the table – they all aren’t known):

  1. BizRadio is off the air in Dallas, TX.
  2. BizRadio is off the air in San Antonio, TX cause they couldn’t pay the bill.
  3. BizRadio was off the air in Houston – now back on (but for how long?).
  4. BizRadio moved to 1180 AM in January but was kicked off because they couldn’t pay the $150,000 deposit or provide a letter of credit for $150,000
  5. BizRadio leased (with an option to buy) 1110 AM to Ron Siddiqi and then kicked Siddiqi off the air cause they (BizRadio) couldn’t meet the terms of the 1180 AM agreement – even after they took $180,000 from Siddiqi.
  6. BizRadio in Houston was off the air for a brief time for failure to pay the electric bill.
  7. Salem – who sold Daniel Frishberg 1110 AM – has announced that they are taking the station back for approximately 50% of what Frishberg paid several years ago.  It is reported that Salem had no choice as Frishberg couldn’t pay his bill there either.
  8. Albert Kaleta got in trouble with the SEC and lost his license and was banned from association with any investment adviser (which would include Frishberg).
  9. The SEC also sued two other entities, Business Radio Network, L.P. d/b/a BizRadio (BizRadio) and Daniel Frishberg Financial Services, Inc. (d/b/a DFFS Capital Management, Inc.) (DFFS) as Relief Defendants solely for the purposes of equitable relief.  This relates to Kaleta and the funds owed to investors who were mislead.

Actually the list goes on…  But now, to my amazement the following is featured on the BizRadio web site:

BizRadio Marketing MasterMind Clinic

March 2, 2009
3050 Post Oak Blvd. | Houston, TX 77056
7:00 – 9:00 p.m.
Refreshments will be served,
Dinner will not be provided
Space is Limited

To RSVP Contact Jack Warkenthien 713-490-8796 or register below:

There are a couple of elements necessary for the success of any business, large or small. But do you know where most business owners fall short?


Finding the most efficient ways to let people know you’re there. Advertising is a big part of it yes, but marketing goes way beyond that. How do you market your business?

Some time back, BizRadio created something called the MasterMind Group, a meeting of the minds headed by Daniel Frishberg, exposing the secrets of successful, efficient marketing.

This March we are honored to bring you two special guest speakers to address the one of the hottest new marketing opportunities: Network Marketing. Daniel Frishberg introduces Jack Warkenthien, BizRadio Host and network marketing genius.

Jack Warkenthien, author of “Life’s A Sales Call” and national radio personality on the BizRadio Network, will share his knowledge in sales, marketing and leadership, leaving you with tips, techniques and networking strategies that will grow your sales exponentially. He will cover topics including:

  • Networking tips to know and use
  • Increasing your sales by buillding your network
  • Expanding your network using network marketing

Come to BizRadio’s Network Marketing MasterMind Session and let Jack and Dan help your business take advantage of the marketing oportunities that the internet makes possible.

We’ll get together in a casual atmosphere and give you some marketing tips you’ve probably never heard before. There is no charge, but you can’t come unless you reserve a spot.

Join us the evening of Tuesday, March 2, 2010 for a free marketing MasterMind Clinic with Daniel Frishberg and Jack Warkenthien hosted by BizRadio.

March 2, 2009
3050 Post Oak Blvd. | Houston, TX 77056
7:00 – 9:00 p.m.
Refreshments will be served,
Dinner will not be provided
Space is Limited

To RSVP Contact Jack Warkenthien 713-490-8796 or register below:

Jack will also introduce you to Lynn Sperry, the CEO of Sperry Enterprises, and Indendant Marketing Consultant for AmeriSciences.

The wellness industry has seen tremendous growth in recent years and this growth is expected to continue over the coming years.There’s a general awakening that good health is very important and staying hale and hearty requires spending money. AmeriSciences (, is a company that caters to this need of people by selling nutrient rich products that promote good health.This is an MLM company that offers customers an option to earn back their money and much more.

HUM…I was told yesterday by an undisclosed investor that Frishberg was now getting into MLM.  Now, there’s nothing wrong with Multi-Level Marketing, but for a reputed investment adviser like Dan Frishberg – The Money Man – really Dan – you’re going the route of attracting investors into MLM?

LET ME STATE – There is absolutely nothing wrong with holding a meeting where excellent information is shared.  Years ago when I was tax partner in a CPA firm (now some 25 years ago)… we did the same thing (hold educational meetings not promote MLM).  But, three things jump out at me… (1) twice in this promotion they have the dates wrong.  As insignificant as that seems, if you are running a well run operation it would seem that you would have folks who would catch simple things like that.  Most folks could guess that they mean March 2, 2010, but that’s not what they say – and as insignificant as it might seem, it illustrates an issue with how the business is run.  (2) If you can’t pay your bills and keep the station on the air, then how truly can you offer a program of quality when there is so much confusion related to Daniel Frishberg, BizRadio and investors who are, for the most part and for the moment, in the dark about the status of the money they trustingly put up… And, (3) does it promote confidence to have a man who “managed” millions using his imploding format to promote a MLM product?

Jack Warkenthien the featured speaker is, per his LinkedIn site – a Radio Personality and VP of Sales at The BizRadio Network and the Owner/Founder of NextStep Solutions.  For more info on Jack see here and here.

The link in the BizRadio promotion is the Jack Warkenthien site so that those who enroll become part of his down line.  It appears that this seminar might be a veiled attempt to promote the MLM product and have those enroll under Jack to build his business.  Here’s the true AmeriSciences site.

Perhaps investors who have questions might want to attend – at least Daniel Frishberg says he’ll be there so you could ask your questions directly.  Just a thought.


BizRadio – As I’ve said – Something smells Frishy

February 19, 2010

The more that seems to surface the more concerned folks seem to be – and with good reason.

In an earlier blog I indicated that I, through email, made an attempt to interview Daniel Frishberg – as I felt that he (being silent other than his email broadcast in the last two weeks) should have an opportunity to express his opinion regarding the flurry of controversy regarding his actions and those of BizRadio.   Thus far no response and frankly, I do not suspect that I will receive a response.

But, in the interest of openness, transparency and full disclosure, below are the questions (in Blue) that in writing (via email) I sought Mr. Frishberg’s answer to:


  1. According to Ron Crider, he and Mr. Frishberg are 50/50 owners of BizRadio Colorado – is that correct?  If not, what do you two own, if anything, together?
  2. Mr. Crider stated that he was brought into BizRadio in October 2009 and introduced to shareholders (in two separate shareholder meetings toward the end of 2009 or early 2010) as BizRadio CEO?  Is that correct?
  3. Mr. Crider was listed in late 2009 as the President of Broadcast Operations on the BizRadio website – was he an employee in that position?  If not, what was his capacity?  If he received no compensation, then what do you suspect motivated his association with BizRadio in a titled position (per the website) without current compensation?
  4. Mr. Crider stated that he suggested the sale of 1110 AM to Rehan Siddiqi so that BizRadio could move to 1180 AM (reportedly a station with a stronger signal)… is that accurate?
  5. Mr. Siddiqi was listed on the BizRadio web site as Vice-President of Marketing.  How long did he hold that position with BizRadio?  How would you describe his service in that capacity?
  6. You have stated something to the effect that you felt that Crider and Siddiqi attempted to obtain 1110 AM for less than fair market value (to steal it from you – my words paraphrasing yours) – when do you think that scheme got cooked up?  What motivated that action in your opinion?  What did Crider have to gain from Siddiqi’s lease/potential purchase?
  7. What caused Entravision to issue the letter to BizRadio regarding not providing the letter of credit or deposit of $150,000?  If, in fact, Siddiqi paid BizRadio $180,000 wouldn’t BizRadio have had the $150,000 needed to continue broadcasting on the strong signaled station?
  8. The Houston Chronicle reported that the check which shows a signature by Albert Kaleta was reportedly “forged” – is that your position?  If so, who do you suspect forged Mr. Kaleta’s signature?
  9. Several investors have reportedly written or called you suggesting that you turn over operations to Mr. Crider – is that a possibility?
  10. Since Mr. Kaleta is effectively barred by the SEC from interacting with any investment advisor and since you are a licensed investment advisor, does Mr. Kaleta’s disconnection with you and (one would assume) BizRadio have any effect on the ability to attract more investors?  If not, how will future investors investments in BizRadio be structured (loan with a guaranteed interest rate) or (shareholder)?
  11. It would appear that Mr. Siddiqi is out a substantial sum of money as a result of this whole ordeal.  What position does BizRadio take since it effectively kicked Mr. Siddiqi off the air?  Does BizRadio plan to reimburse him the funds he is out?  If so, when (or has it already taken place)?
  12. It has been reported that you have moved assets (DFFS Capital Management, Inc.) from your name to your wifes in order to avoid any issue with the SEC should they conduct an investigation (expanded from Kaleta).  Is that true?

Since that email was sent (with no reply as of this writing) several more questions exist:

  1. It has been reported that an announcement was made to BizRadio employees on Wednesday or Thursday that BizRadio was being sold for $3.5 million back to SALEM.  Now, if Frishberg bought KTEK for $7.7 million from Salem and Salem is buying it back for $3.5 million then does that mean that Salem is taking a $3.2 million or so loss?
  2. Wallace has (had) a lien against BizRadio assets (which logically would include KTEK) for some amount.  What impact does the sale to Salem have on the security that Wallace was to have in BizRadio?
  3. Since Frishberg originally agreed to lease/sell 1110 AM to Siddiqi for $3.5 million, then cried to the courts that he (Frishberg) was being swindled by Siddiqi and Crider, what does the sale back to Salem mean?  Is the value really $3.5 million?  If so, then how did Siddiqi and Crider swindle Frishberg?  Rather, did Frishberg use Crider to swindle Siddiqi (who is still out $180,000 and a radio station)?  Did Frishberg lie to the court when he talked about the value?  And, did Frishberg perpetrate a fraud on Siddiqi so that he could get Siddiqi’s funds (since it seems that money is a precious commodity at BizRadio these days)?
  4. Did Salem force the sale since Frishberg was reportedly behind in his lease (i.e., is Salem foreclosing)?  Is this SALE to Salem contingent on BizRadio having some lease back provision?  An what does this reported sale mean to the investors who are (as each day unfolds) seeing less and less chance that they will ever get their investment back.
  5. It is reported that Frishberg is also promoting that he has struck a deal with Salem for 3 hour daily show on at least 6 Salem station across the country.  Salem is reported to have a squeaky clean reputation and image.  So what is the truth involved here?  Sale to Salem or not?  Behind in payments to Salem or not?

NOTE: From a reliable source, I was told this a.m. that notice has been given from Salem that they need to be prepared to take over the station.  No more details, but it would appear that Salem is in play.  Further, it is reported that Frishberg is asking to be given a little more time for BizRadio to come up with the $150k LC on that last Friday before Biz was taken off KGOL.  Seems that the writing is on the wall…Frishberg will soon be off 1110 AM and is desperately trying to scramble to find funds to get back on 1180 AM.  How that could happen is beyond me, but then again…this is typical of how a fraud unfolds as it is collapsing.  Let me put it this way…if there is no investor fraud or (what I’ll refer to as) fraud against Siddiqi here…it would be a bit of a miracle.

Unrelated to the reported deal to sell to Salem other questions came to the forefront that seem noteworthy:

  1. Frishberg is reported to be paying $9,000 lease on a personal residence at Royal Oaks Country Club.  Nothing wrong with that as long as funds to pay the rent/lease are coming from sources that have not in any way negatively affected the investors who may not have had a clue of the intertangled actions of funds between Kaleta and Frishberg.
  2. Likewise, it was reported today that Frishberg uses Kaleta’s credit card for purchase and/or flights.  Now, if that is true, isn’t that playing with fire since Kaleta was banned (via SEC) from having any involvement with any investment advisor (which Frishberg is)?  I can’t honestly imagine that Frishberg would do that, but thus far most items that have been reported to me have (over time) been confirmed.  Go figure?
  3. Here’s Albert Kaleta’s LinkedIn profile.  He’s still showing here as a owner of BizRadio.  Perhaps he’s just failed to change it, but no association seems that he should have removed himself from any involvement with BizRadio.  Maybe I’m missing something?
  4. Lastly, I was told that the transmitter site’s property insurance has lapsed.  I suppose that as long as the power bill is paid the transmitter can continue to work, but at what risk if there is no insurance?

Folks…what seems to be evident are the dying gasps of an investment scam that has gone bad.  And, if not a scam…then surely evidence of folks who are inept at running a successful business.  Of course, the full truth is not yet revealed…but with all the activity surrounding what’s taking place…I suspect that the speed of the collapse will gain momentum.

Sorry, wish the news were better.  But if there has ever been something that smelled FRISHY when it comes to Business Ethics…this is it!

…and comments are welcome.

Daniel Frishberg – BizRadio: A Bleak Picture Unfolds

February 18, 2010

There are time when finding a beginning point is a challenge.  As a business ethics speaker and author, I follow many stories – some shinning the bright light on positive ethical behavior and others illuminating sad situations for the victims of greed and hubris.  As this story unfolds…I am sensing more and more that the latter is certainly what is coming to light.

Most who have followed this story in this blog know the background.  It does not need to be repeated.  But if this is your first read then follow these links to prior reports and you’ll get a sense of the broader picture.  Blog 1Blog 2Blog 3Blog 4Blog 5Blog 6Blog 7Blog 8Blog 9.  (O.K. it’s a big story)…

Early this week I began receiving reports that BizRadio was off the air on 1110 AM in Houston.  Why, I wondered?  Then as quickly as it seemed the question was asked…answers seemed to flow in.  “They failed to pay the electric bill,” one source told me.  “What,” I thought.  “That can’t be.”  As I heard what I was told I elected not to take action in my blog for something that seemed, to me, so far fetched.  After all, how can Daniel Frishberg “The Money Man”, who just a month or so ago got $180,000 from Rehan Siddiqi, be unable to afford the electric bill?  I was perplexed.

Then, voluntarily another source, called me to tell me that BizRadio was nearly bankrupt (their words not mine) and that, sure enough, the failure to pay the bill was the reason the show was off the air for a day.  Quite amazed…I began to wonder how those folks who drank the koolaid regarding how great BizRadio (as an investment) would be.  Then a trend began to emerge… so follow this story (told in brief).

Bernie Madoff (we’ve all heard of him) was a brilliant man.  My guess is he was quite adept at investing and likely knew more about money, investing and how the monetary system worked that I would ever know.  Any way, Bernie created many victims in his wake.  How?  He lured them into the PIT.

What prey tell is the PIT.  Follow along now.  First, Bernie promised something that the average person could not get with their investments…  He PROMISED (that’s the ‘P’ in PIT) an above average return like 12% say?  Now, everyone knew that no one could invest their money and get 12%…  It just was not a return that was available to the common man.  Second, Bernie supported his investment brilliance with a well thought out ILLUSION (you got it, ILLUSION is the ‘I’ in PIT).  Bernie’s illusion was created in house by teams of people who made fake statements that supported his investment claims. Lastly, Bernie started his scam with those closest to him by creating a veil of TRUST.  People who put their funds with Bernie felt that they were secure and fortunate to be with one of the best and brightest.  The ILLUSION was filled with glamor and supported by TRUST.  The outcome…  Well if you’re reading this you know that.


Then today I was sent by several sources a copy of the Receivers report for KCM (Kaleta Capital Management).  With a background in accounting, I found the read enlightening and UNFORTUNATELY supportive of my concerns.  The picture is not complete, but the more that comes to light the more I am beginning to sense that many investors have been sucked into the PIT.


On January 13, 2010, Receiver met with a majority of the 56 investors who have invested in KCM promissory notes. Some note holders also participated in the meeting in person or telephonically by conference call.

In broadest terms, KCM offered and sold securities in the form of promissory notes to members of the public through which it raised approximately $10 million from 56 public investors. The proceeds of the offering were then loaned to various business entities and individuals who used the funds — at least primarily — for operating capital. The two largest borrowers — BusinessRadio Network, L.P. d/b/a BizRadio (“Biz Radio”), and Daniel Frishberg Financial Services, Inc. d/b/a DFFS Capital Management, Inc. — were affiliated with KCM through common management and ownership. Certain of the other borrowers had business connections with KCM and its management if not actual common ownership and management.

While it is only an opinion, it would seem that (at least) some of the 56 public investors were not assuming their investments were going to a close knit group of people who had a business that was, in many ways, self serving.  At least some of the investors have stated that to me in various forms.

Financially it is interesting that the KCM Promissory Notes Reconciliation does not reconcile with the KCM Notes Receivable spreadsheet.  No reason to get technical here.  It is amazing (I wanted to say comical, but nothing about this is funny) that folks who raised millions and/or managed millions can’t even get a reconciled set of books.

But according to the Notes Receivable Worksheet almost $8.7 is outstanding:

Notes Receivable:

N/R-WB West Houston Realty Fund           360,176.35
N/R-Chris Connolly                                     5,000.00
N/R-Albert Kaleta                                    250,000.00
N/R-Brian D’Armas                                 160,937.50
N/R Daniel Frishberg Financial             1,609,990.26
N/R-Costa Bajjali                                      16,940.00
N/R-Wallace Bajjali                                  89,217.00
N/R-David Wallace                                 101,000.00
N/R-BusinessRadio Network, LP            5,230,497.10
N/R-Laffer Frishberg Wallace              875,236.35

Total Principal Outstanding                 $ 8,698,994.56

To date, only two of KCM’s outstanding notes have been fully retired. The first retired note was a note in the principal amount of $106,979.90 executed in 2008 evidencing a personal loan by KCM to Daniel Frishberg apparently as purchase money for a residence.

The second retired note was in the amount of $15,000 from Wallace and Bajjali related to a real estate development project nearing completion. Other borrowers have indicated an intent to re-pay in the near term but concrete commitments have not been made.

Early on it was reported that Frishberg felt the need to repay KCM so that he could distance himself personally from Kaleta since Kaleta and KCM were in deep and high profile with the SEC.  I was told that Frishberg wanted as much distance as he could get (considering however how tied he is to Kaleta – the distance isn’t far).  Further, it was reported that Frishberg was moving as much out of his name as possible so that if the SEC came calling they would find him to be clean (or without assets under his control).  I have attempted to interview Mr. Frishberg even in writing, but as of this date I have received no response.  NO SURPRISE.

The last part of the Receiver’s report is of greatest concern (if you’re an investor):

Of greatest concern are outstanding notes of the two largest borrowers, BizRadio ($4,990,741.60) and Frishberg & Kaleta ($1,238,000.00) or Daniel Frishberg Financial Services ($1,609,990.26) depending on which internal KCM records are reviewed. The Receiver has met with counsel to these two borrowers and transmitted to them the Receiver’s expectations with respect to arrangements for repayment. Counsel for these entities have indicated that significant recapitalizations may be required to enable repayment. The Receiver has expressed a willingness to maintain a certain amount of flexibility with respect to repayment arrangements. But, it also has been made clear to the borrowers that very substantial cash reductions will be required along with detailed proposals for repayment in full. As the Receiver has stated to the investors, all rights are reserved with respect to individuals and affiliates of the borrowers should repayment not be forthcoming within a reasonable, foreseeable time.

Also, based upon representations to the Staff of the SEC prior to the commencement of the action, it was anticipated that KCM would have in the range of $500,000 in liquid assets on hand. As of the institution of the Receivership, however, there were virtually no cash assets on deposit.

The picture is bleak.  BizRadio seems to be imploding.  Frishberg owes the folks from whom he bought it and there are liens against it to protect Wallace Bajjali and another entity.  So, if Frishberg loses 1110 AM it does not appear that the KCM investors will see any repayment of their investment from what would appear to be the biggest asset.  Perhaps I am wrong, but it seems the writing is on the wall.

The larger question that is looming in my mind is what about Daniel Frishberg?  Did Frishberg use Kaleta as a front man for ill gotten “investments” to support BizRadio?  If so, did those investors know the truth?  Perhaps they did (although I’m hearing from a few that they didn’t).  Was BizRadio just part of a grand ILLUSION to create the aura of DANIEL FRISHBERG – THE MONEY MAN?  Did the investors just lose their money in a legitimate investment that went south (it happens) or did Frishberg (through Kaleta, Wallace and others) lure them into a big giant PIT?

This is not the end of the story…just the continuation of a story unfolding.

NEWS FLASH…10:31 P.M. – “Re: Biz Radio/Kaleta Capital Management – “Wowzer!
Just confirmed Daniel held a staff meeting today and announced that Salem will be repurchasing KTEK for $3.5-million (which, as I recall, was about what that Sidiki fellow was going to pay for it last month…)”

Now starting to wonder if Frishberg might need a primer in pre-prison preparation for the failed PROMISE of what appears to be a PONZI type program.  This is the sound of investor money sinking into a deep PIT.


Albert Kaleta’s loan program effectively a Ponzi scheme per SEC documents… Comments by Business Ethics and Fraud Prevention Expert Chuck Gallagher

February 12, 2010

Below is the report from the SEC – take a look and note comments are listed in blue

Before the
Release No. 2983 / February 2, 2010
In the Matter of

The Securities and Exchange Commission (“Commission”) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 203(f) of the Investment Advisers Act of 1940 (“Advisers Act”) against Albert Fase Kaleta (“Respondent” or “Kaleta”).

In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement (the “Offer”) which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission, or to which the Commission is a party, and without admitting or denying the findings herein, except as to the Commission’s jurisdiction over him and the subject matter of these proceedings, and the findings contained in Section III.2 below, which are admitted, Respondent consents to the entry of this Order Instituting Administrative Proceedings Pursuant to Section 203(f) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions (“Order”), as set forth below.

NOTE: Kaleta did not admit or deny the finding of the SEC, but did agree to the SEC ruling.  Now, practically, if one was innocent one would fight the allegations.  While not admitting guilt…Kaleta is effectively out of the investment business.

On the basis of this Order and Respondent’s Offer, the Commission finds that

Kaleta was the president and owner of Kaleta Capital Management, Inc. (“KCM”) and a 44% shareholder of Daniel Frishberg Financial Services, Inc. d/b/a DFFS Capital Management, Inc., an investment adviser registered with the Commission. Kaleta, 66 years old, is a resident of Houston, Texas.

On December 2, 2009, a judgment was entered by consent against Kaleta, permanently enjoining him from future violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and (2) of the Advisers Act, in the civil action titled Securities and Exchange Commission v. Albert Kaleta, et al., Civil Action Number 4:09-cv-03674, in the United States District Court for the Southern District of Texas.

3. The Commission’s complaint alleged that, in connection with the sale of promissory notes made by KCM, Kaleta falsely stated to investors that the note proceeds would be used to make short-term loans to small businesses; that KCM would only lend to creditworthy individuals or entities whose models Kaleta had fully researched and understood; that Kaleta would perform due diligence to ensure that borrowers had the ability to repay their loans; that KCM would charge 12-14% annual interest on the loans, and would profit from the spread between that amount and the 10% promised investors. Instead, Kaleta misused and misappropriated investor funds. Kaleta paid himself, his family members, and his affiliated companies which were not creditworthy. To the extent these payments were “loans,” they were not documented and were not being repaid. In addition, he misused and misappropriated investor funds by making periodic interest payments and redemptions to earlier investors with new investor funds. The Commission’s complaint alleges that he also otherwise engaged in a variety of conduct which operated as a fraud and deceit on investors. The complaint also alleged that Kaleta sold unregistered securities.

NOTE:  The SEC complaint states, “he misused and misappropriated investor funds by making periodic interest payments and redemptions to earlier investors with new investor funds.”  That is the classic definition of a PONZI scheme.

In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions agreed to in Respondent Kaleta’s Offer.

Accordingly, it is hereby ORDERED:

Pursuant to Section 203(f) of the Advisers Act, Respondent Kaleta be, and hereby is barred from association with any investment adviser;
Any reapplication for association by the Respondent will be subject to the applicable laws and regulations governing the reentry process, and reentry may be conditioned upon a number of factors, including, but not limited to, the satisfaction of any or all of the following: (a) any disgorgement ordered against the Respondent, whether or not the Commission has fully or partially waived payment of such disgorgement; (b) any arbitration award related to the conduct that served as the basis for the Commission order; (c) any self-regulatory organization arbitration award to a customer, whether or not related to the conduct that served as the basis for the Commission order; and (d) any restitution order by a self-regulatory organization, whether or not related to the conduct that served as the basis for the Commission order.
For the Commission, by its Secretary, pursuant to delegated authority.

___________________________________ Elizabeth M. Murphy Secretary


If Kaleta is “barred from association with any investment adviser” and Daniel Frishberg is clearly an investment advisor, then hasn’t Kaleta already violated the agreement with the SEC by signing a BizRadio check and hence associating with Daniel Frishberg?  See check below:

Now I understand that BizRadio Network is not an investment advisor, but Daniel Frishberg is the CEO of BizRadio Network and according to the SEC Kaleta had a 44% ownership in Daniel Frishberg Financial Services, Inc. d/b/a DFFS Capital Management, Inc., an investment adviser registered with the Commission.  Based on that connection and SEC prohibition, wouldn’t you think that Albert Kaleta would not be signing checks for BizRadio?  Maybe it’s a forgery and that will lead us down another rabbit trail…


The BizRadio Saga – Albert Kaleta, Daniel Frisberg and David Wallace…this is the stuff bad movies are made of…

February 9, 2010

Is it that the ego is too big for the right thing to be done or it is that this is just a bad movie – only no one is shooting film?  The longer this saga continues the more I’m sensing that there is “tarnish on the microphone” – Mr. Frishberg.


Albert Kaleta and Daniel Frishberg are (well “were” in the case of Kaleta) investment advisors, both having investor funds that were apparently under their direction.  Kaleta was the subject of an SEC suit in which Kaleta surrendered (I suppose you’d call it that) his license (in other words he is not supposed to be active in investing funds for others) and agreed not to involve himself with any other investment advisor(s).

The Order bars Kaleta from association with any investment adviser. Kaleta consented to the issuance of the Order without admitting or denying any of the findings in the Order, except as to the entry of the injunction, which he admitted.

So far so good…  Now it seems that Frishberg got to keep his investment license and, therefore, the ability to continue his investment activities (for which I’m told he’s pretty good at).  However, he and BizRadio were sued by the SEC.

The Commission also sued two other entities, Business Radio Network, L.P. d/b/a BizRadio (BizRadio) and Daniel Frishberg Financial Services, Inc. (d/b/a DFFS Capital Management, Inc.) (DFFS) as Relief Defendants solely for the purposes of equitable relief.

Now…a new party to me enters the picture.  Apparently, David Wallace, former mayor of Sugarland, Texas and his investment partner Mr. Bajjali have been active in several successful real estate investment funds.  David Wallace is the Chief Executive Officer and Secretary of General Partner and Chairman of the Investment Committee for Wallace Bajjali Development Partners.  Also, David wrote the book –  “One Nation Under Blog.”  Wallace has an impressive track record.

However, my sources tell me that in one of their last investments (primarily real estate), Wallace placed a portion of the private investment with BizRadio (you know where the microphone is tarnishing these days).  Without verification, I am told that the Wallace Bajjali investment in BizRadio was some $5 million.  I am further told that Albert Kaleta was instrumental in bringing private investors to the table for the Wallace Bajjali investment offering.  In fact, I am told that the subscription agreement that some (I don’t know how many) of the investors signed were signed in Albert Kaleta’s office.

There must be some truth that Wallace Bajjali invested funds with BizRadio otherwise why would they have a UCC Filing with a lien on the company?  See below:

NOW IS THAT A PROBLEM? In an of itself – NO.  Albert Kaleta was reported to be a great investment closer.  Reportedly, Wallace would put the deal together (in many cases public-private partnerships) and Kaleta (with his extensive investor network) would bring investors to the table.  Seemed to work for all concerned…till the SEC got involved.


  • If Kaleta was, in fact, (can’t confirm at this time) an active supplier of investors for Wallace Bajjali – does Kaleta’s prohibition from associating with investment advisors have a negative effect on finding future investors that Wallace Bajjali might need for upcoming projects?
  • What impact does the Wallace Bajjali investment in BizRadio have on their reputation with current investors or future investors, if any?
  • Is Daniel Frishberg’s insistence that Ron Crider was some “rogue radio guy” going to stand up to scrutiny when all the truth comes to light?  (I don’t know but it sure seems that Ron Crider had Frishberg’s blessings till his deal with 1180 AM went south).
  • Since Wallace Bajjali clearly has an interest in BizRadio…do they have the clout to take control of the operation and protect their investment?
  • Is it true that BizRadio and Daniel Frishberg are behind in their payments to their San Antonio station owner and behind in their payments to Salem Communications (the company they bought 1110 AM from)?  What impact does this have on BizRadio’s ability to continue as a going concern?
  • If so, what impact does that have on the value of the BizRadio business on a move forward basis?
  • One judge ruled in favor of Siddiqi giving him a Temporary Restraining Order thereby keeping him on the air.  Then (for some reason) another judge got the case and ruled in favor of Frisberg.  Why two judges?  Coincidence there was a change of judges or politics at play (judge shopping)?  Perhaps there is a simple explanation…  Thanks to Sarah Duckers (see the comment below) there is a simple explanation.  Thank you Sarah for your input!
  • Lastly, while it is reported that Daniel Frishberg produces consistent returns for his investors (funds he controls for others), is there evidence that Daniel Frishberg is an effective businessman when it comes to the operation of a radio station for profit.  (I submit, just because I can fly an airplane, does not make me qualifies to design the doggone thing.  Just a thought.)

I suspect that David Wallace is wondering what the hell happened?  Likely, knowing the astute businessman he is, David is figuring out how to protect his investors from what appears to be the Daniel Frishberg ego implosion.  The remaining question is…when will reason and sense prevail?  Perhaps, if logical action is taken quickly, the microphone can be repolished and everyone go back to doing what they do best.

LET’S HOPE FOR INVESTORS SAKE…Frishberg doesn’t take everyone down with BizRadio.