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

December 1, 2010

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

I’m just asking?  YOUR COMMENTS ARE WELCOME!


Is the BizRadio – Dan Frishberg Financial “Scambus” headed to 880 AM THE BIZ in Miami?

November 25, 2010

What’s happening in South Florida?  Looks like Dan Frishberg – the self-proclaimed “Money Man” is taking his show on the road seeking a new audience and perhaps one that isn’t as familiar with his financial shenanigans as the folks who lost millions in the Houston – Dallas, TX markets.

Most in TX know that Dan Frishberg’s side kick – Al Kaleta is in dutch with the SEC and banned from his role in investment advice and BizRadio.  Likewise, Dan Frishberg’s DFFS (Dan Frishberg Financial Services) was “sold” to Barrington Financial (what some have described as a straw puppet for Frishberg’s investment work) – yet DFFS is under the purview of the SEC Receiver Tom Taylor.  Many questions have been raised as to those (DFFS) assets.  And yes, Frishberg himself is subject to SEC scrutiny.

So below is a new release which appeared on November 19th.  See comments below:

MIAMI – One of the brightest voices in financial and investment strategies in America will soon be heard on South Florida’s only all business radio station, The Biz, at 880 on the AM radio dial.

ONE OF THE BRIGHTEST VOICES – really?  The subject to an SEC investigation and millions of dollars in investor losses makes one a “Bright Voice?”

Daniel Frishberg, principal of is well known to viewers of CNBC and Fox Business News, as a frequent commentator on Wall Street and global investing, having appeared more than 5 times on such programs as “Closing Bell with Maria Bartiromo” on CNBC and Your World With Neil Cavuto on Fox since 2003. Starting Nov. 1, Miamians will be able to get the same up-to-the-minute strategic advice in the comfort of their cars on the way to work. So why should they? Listen to “Radio Wall Street: The MoneyMan Report”? Because Dan Frishberg is a unique voice in the world of financial commentary and analysis.

I will be the first to say that I may be wrong, but it seems that most of the claimed fame happened before the world found out the truth about Dan.  Truth is Dan has yet to be transparent regarding his financial dealings with DFFS, BizRadio and his RIA association with Barrington.  Perhaps many would have a different opinion if you – DAN – would come out of the closet and share the truth about the funds of BizRadio and how you are going to make restitution to what appear to be defrauded investors.

For instance, he says people are “drowning in statistics, data, and numbers”. In theory, he says, the 24/7 reporting of the latest market data would help people made better, more timely decisions about how and where to invest or how to use their resources. But in the years since they started getting constant reports on employment, manufacturing, and GDP, he notes, most Americans have actually lost ground.

“Data is worth very little,” says Frishberg. “That’s the inescapable conclusion. When you know what everybody else knows, you know nothing. Insight, vision and strategy make you rich.” Dan Frishberg has become famous for his ability to gather, analyze it and draw useful conclusions from the flood of data, distilling it into advice that helps people make good investment decisions. Strategic investing is not really rocket science but even the engineers and scientists in Cocoa Beach need timely advice to do it right.

Some of the most famous and successful investors and strategists on the planet join Dan every morning, offering his listeners their best ideas – spotting major turning points, identifying short term moves and options trades. These are people who have made their fortunes and their reputations by recognizing that there is a play for every situation and knowing which ones to make.

This might be interesting or certainly make for an interesting show – Dan why don’t you address the BizRadio fiasco.  Perhaps a call in show for the world to hear might be appropriate and one that would get great ratings as I know the calls would be lined up from scamed investors who want some serious answers.

Regular listeners to “Radio Wall Street” hear from financial reporters like CNBC’s Mark Haines and Maria Bartaromo, Fox Business Channel’s Neil Cavuto, Jenna Lee and Cody Willard; investment strategists Jon Najarian, Jack Bouroudjian, and Herb Greenberg. Economists and strategists Dr. Arthur Laffer, Dr. John Rutledge, former Fed vice-chairman Alice Rivlin and Robert Reich, Bill Clinton’s secretary of labor, captains of industry like Steve Forbes and Jack Welch all come on the air with Dan Frishberg. They don’t just stop by when they have a book to tout. They take the time to open up, so “The Money Man Report” audience gets to hear what they really think. They come on his show because they respect his track record of seeing the trends before they become conventional wisdom and they enjoy talking with a man who really gets what’s going on in the global financial and business markets.

Dan Frishberg literally grew up on Wall Street, learning the ins and outs of the market from his grandfather on visits to the Stock Exchange floor as a child. He spent three years as a Marine machine gunner, learning discipline, then came home to work his way through college trading silver contracts.

In almost twenty years of broadcasting he has had the great good fortune to become friends with most all of the most famous, successful, creative, gifted financial and economic strategists of our generation.

“Life isn’t fair,” Frishberg says, “and the best of us also get all the breaks. My gift was to have fallen into a life where I spent tens of thousands of hours practicing and learning, surrounded by the very best and brightest, and studying at the very highest levels from the trading floor at Goldman Sachs to the floor of the Chicago Merc.

The “best of us also get all the breaks.”  That is a curious statement as it seems that the breaks have fallen Dan’s way and at the cost of millions for investors who would like to “catch a break!”

“Now my special gift is to use this unusual configuration of talents and skills with regular people who would never get near it any other way.”

“Radio Wall Street: The MoneyMan Report” airs from 8 am to 9 am daily [OR weekdays] on Miami’s THE BIZ 880 AM.

For an interview with Dan Frishberg contact:
Pamela Caddell
pcaddell@barringtonfinancial.com
713-748-9642

Perhaps it would be appropriate to schedule an interview with Dan – maybe Pamela could set that up.  Oh…and for my readers don’t think I haven’t tried.  But of course, Dan’s far to smart than to give an interview to me – after all, I might ask some hard questions – questions he apparently doesn’t want to answer.

BUT IF YOU HAVE QUESTIONS…SUBMIT THEM HERE AND I PROMISE I’LL TRY TO GET SOME ANSWERS.


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

November 16, 2010

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

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

What’s it all about, Wallace?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

I’m just saying…

YOUR COMMENTS ARE WELCOME!


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

August 8, 2010

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

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

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

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

DAN STATES THE FOLLOWING:

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

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

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

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

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

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

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

YOUR COMMENTS ARE WELCOME.


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

July 28, 2010

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

July 22, 2010

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

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

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

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

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

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

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

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

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

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

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

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

YOUR COMMENTS ARE WELCOME!


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

July 27, 2010

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Meanwhile…YOUR COMMENTS ARE WELCOME!


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

July 22, 2010

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

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

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

THE IMPLICATION:

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

THE OUTCOME:

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

Salem Offer…

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

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

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

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

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

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

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

A QUESTION OF COMPATABILITY:

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

THE WEB OF FUNDS:

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

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

WHERE FROM HERE?

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

YOUR COMMENTS WELCOME!


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