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!

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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!


Clifford Wayne Robertson – Real Estate Radio Talk Show Host Pleads Guilty to Bank Fraud

January 18, 2010

He was heard on CNN 1190 in the Dallas, TX marketplace.  His topic – real estate investment strategies.  What folks apparently did not hear was “the rest of the story.”  It seems that, now former Dallas radio host, Clifford Wayne Robertson, 43, pleaded guilty to  charges of bank fraud.

The original indictment alleged that Robertson admitted to using the identity of another person to send fraudulent personal financial statements to a lending institution, the U.S. Attorney’s Office alleged. He submitted the statement to obtain money under false pretenses, prosecutors said in a statement.

The loss caused by his actions is estimated to be in the $3 million range.

Robertson was indicted by a federal grand jury on Sept. 10, 2009. He faces a maximum sentence of up to 32 years in prison. A sentencing date is still to be determined.

COMMENTS:  Since there are three components to the commission of a white collar crime like this – NEED, OPPORTUNITY and RATIONALIZATION – the question is, first, what motivated Robertson to commit such a fraud?  And, equally as important, how could he rationalize that statements issued under false pretenses would be O.K.?

I’m interested in your thoughts.

As a business ethics speaker and author, I know what Robertson is facing.  I, too, faced federal prison for crimes committed in the ’80’s.  Speaking from experience, the consequences of fraudulent actions are no fun.  And, the higher your profile the more likely you are to receive a more severe sentence – just ask Bernie Madoff.

If you have insight into what Robertson might have been thinking…feel free to share.


Texas Motivation Speaker – Chuck Gallagher speaks on “Saving A Life! One Choice At A Time…”

November 22, 2007

Chuck Gallagher, Ethics Speaker

Being stuck in traffic really stinks at times and this morning was no exception. I had just heard the radio play the commercial that I had made for a local company and recall the up coming news tickler. Planning to turn my radio off or switch to satellite radio, I heard something that peaked my interest – so I left it on that station just a bit longer.

The announcer, returning from a commercial break, began to share a story that so touched me, I elected to include it in my presentations – as it spoke clearly and innocently to the focus of every presentation I make – that being – Every Choice Has A Consequence.

It seems that a young man – actually better put a school kid – in the sixth grade was being acknowledged as the citizen of the week by this station in Dallas, TX. Now, Dallas isn’t small…so for a school kid to be the citizen of the week, well I just had to hear the story.

Seems that one fine morning the kids had gathered at lunch, just visiting with each other, when one of his buddies got choked on an orange slice. Now, for any of us who have been choked…one thing you can’t do is ask for help – kinda hard when you can’t breathe. When the kids noticed what was happening most of them gathered around just looking in disbelief. You can imagine the scene – one kid choking to death – as others gathered and watched.

But not our citizen of the week. He, without giving it a thought, jumped into the middle of the group, placed his arms around his buddy and did the Heimlich maneuver dislodging the orange slice and rescuing the choking victim. He seemed to think nothing of it – but I’m sure the kid he saved has a much different feel for the whole experience.

Faced with mounding publicity, this young man seemed to take it in stride. Of course his mother was beaming with pride as her son was recognized for his heroic action. The reported asked, “Just how did you learn how to do the Heimlich?” Without hesitation the boy answered, “Why watching the movies – of course!” Taken back his mother leaned over and asked, “What movie, sweetie?” With an almost indignant tone, he replied, “Mom…Mrs. Doubtfire! Don’t you remember?”

The news anchor laughed and for once I enjoyed hearing something that created hope – good news on the radio.

Just today another story was reported out of Jacksonville, Florida. http://www.news4jax.com/news/14652643/detail.html

This story was similar in content and in the feel good human interest side of the news. It’s wonderful to talk about those choices in life that make a profound “life and death” difference. What makes them so interesting to me…is that neither of those two kids woke up, got dressed for school, and on the way out the door told their parents, “You know I think I’ll save someone today.”

When others stepped back and refused to take action, these two people stepped forward and made choices – unanticipated choices – that saved lives.

That happened to me back in 1990 – I mean someone then entered my life quite unexpectedly and made a profound statement that was life changing. He said, as I was experiencing my “Dark night of the Soul,” – “You made a mistake, but You are not that Mistake! The choices you make next will define who you really are and the legacy you will leave for your children.” As I considered suicide that night, he, in a few simple words, made the choice to stick with me and help me clear away the fog and see clearly who I could become for the first time in a long time.

Today, as a Texas Motivational Speaker, I speak to groups nationwide about choices and consequences. These two youthful examples show the power that one choice can have – saving a life. What choices have you made that have made a difference to you or other peoples lives?

For information on presentations on the Power of One visit my web site: http://www.chuckgallagher.com

Any comments?

Texas Motivational Speaker – Chuck Gallagher – signing off…