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

January 3, 2011

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

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

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

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

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

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

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

THE NEW YEAR’S QUESTION:

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

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

PRIOR POSTS ARE HERE:

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

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

Meanwhile – YOUR COMMENTS ARE WELCOME!


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!


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!


Salem agrees to buy BizRadio KETK – But substantial legal questions remain

March 17, 2010

Inside radio reports today that BizRadio has sold KETK (1110 AM) back to Salem in a drama that has been waged on multiple fronts.  What might seem like a straight forward transaction is anything but straightforward.  In fact, it would seem that now the drama just begins.  Here’s the release found on INSIDE RADIO:

Two months after BizRadio Network waged a legal fight to retain control of KETK (1110), the station is being transferred back to its previous owner.  But buyer and seller remain closely tied.

Salem will pay $2.06 million for the station, including $800,000 in cash and forgiveness of $1.26 million that remains on a promissory note signed by BizRadio two years ago when it bought KTEK for $1.5 million.  Salem also agrees to give it a $1.64 million credit to be used to buy airtime from Salem stations.  BizRadio founder Dan Frishberg didn’t respond to a request for comment.

In February, BizRadio went to court to block the proposed $3.5 million lease-to-buy sale of KTEK to Asia Vision owner Rehan Siddiqi that apparently had struck a deal with a BizRadio consultant who wasn’t authorized to sell the station.  The “BizRadio” format is still heard on KTMR, San Antonio (1130) under a lease agreement with Siga Broadcasting.

So let’s explore the questions that this “expected” sale creates:

1.  On Nov. 13, 2009, the Commission sued Albert Fase Kaleta and his company, Kaleta Capital Management, Inc. (KCM), in the United States District Court in Houston, Texas. The Commission alleges that Kaleta and KCM defrauded investors in the offer and sale of KCM-issued promissory notes in an offering that raised $10 million from approximately 50 investors. 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.  QUESTIONSince BizRadio and DFFS Capital Management, Inc. were sued for equitable relief, and since a Receiver has been appointed to collect funds for scammed investors, does the “Receiver” have the ability and/or authority to attach the $800,000 in cash reported as part of the sale?

2.  As reported yesterday in my blog (see here), certain unnamed investors feel that they were also scammed when they invested in the Laffer Frishberg Wallace Economic Opportunity Fund.  While the fund reportedly required that no more than 20% of the capital be invested in any business, the investor reported that over 60% of the capital had been invested in the money losing operation of BizRadio.  QUESTION:  If the “Receiver” (from question #1 above), has the authority to attach the cash portion of this sale as a result of his work on behalf of the scammed Kaleta investors, does that leave the scammed Laffer Frishberg Wallace Economic Opportunity Fund investors in the COLD?  I’m afraid, based on a conversation I had with a knowledgable party, the answer is YES!  SCREWED! Sorry!!!

3.  An $18 million lawsuit was filed against BizRadio and Daniel Frishberg related to the failed sale of 1110 AM to Rehan Siddiqi.  Siddiqi offered to lease the station with a purchase option for $3.5 million.  All seemed well as Frishberg et al took Siddiqi’s $180,000 advance payment and then kicked him off the air when they failed to provide the necessary financing – letter of credit – to their new station 1180 AM.  OOPS…Frishberg finds that he’d be off the air unless Siddiqi is kicked out.  Bye…Rehan says Frishberg and hence the lawsuit.  QUESTION A:  If Siddiqi was willing to purchase the station for $3.5 million – what would motivate Frishberg to sell it to Salem for substantially less? QUESTION B:  Am I missing something, but Frishberg said that he had purchased the station for over $7 million, yet the news release states that he purchased it for $1.5 million? Sorry, but I’m lost on the math here and I have a Masters in Accounting…  QUESTION C:  Since there is an active lawsuit against BizRadio and Daniel Frishberg, why would Salem enter into the transaction now without concerning themselves with the outcome of the pending lawsuit? Seems as if they are thumbing their nose at Siddiqi and his attorney.

4.  Salem agrees to give $1.64 million credit so that Frishberg can stay on the air…as what I don’t know – BizRadio, Business 1110, Business 1110AM?  Confusing I know…  QUESTION: Is this truly a credit that is expected to be repaid?  Is Salem extending air time credit that they feel Frishberg or BizRadio or whomever will actually write a check to pay in the future? Yes…I know that is the same question asked in a different way…but – How could Frishberg pay Salem $1.64 million if they can’t pay their help, their power bill and it would appear that their source of revenue (investor funds) has dried up?  Who would honestly invest their funds with Frishberg, Wallace, Laffer, etc. with the SEC breathing down their back (at least that’s my guess)?

5.  Last, at least for this blog entry – the SEC stated that Kaleta defrauded investors and while Kaleta did not admit guilt (smart move on his part – although that does not preclude other federal agencies from looking into criminal charges), he is no longer in the investment business.  Frishberg seemed to be dragged into the responsibility for repayment.  QUESTION:  With all that is and has surfaced, do you suppose that Frishberg is the subject of an investigation?  Is so, wonder if the outcome will be similar to that of Kaleta? And, if so, what impact does that have on Daniel Frishberg’s continued broadcast on Salem’s newly acquired station?

My…my so many questions so few answers!

YOUR COMMENTS ARE WELCOME!


BizRadio now Business 1110? Smoke and Mirrors? Dan Frishberg – sorry, but I’m confused…

March 9, 2010

On today’s broadcast of Dan “The Money Man” on BizRadio 1110 – is was reported that Dan announced that his broadcast would now be known as Business 1110 (not BizRadio).  After hearing that report, I tuned in to BizRadio.com and heard the on-line broadcast which seemed quite normal – just business as usual.  Then the questions began…

As a side note, when I was young I recall my Mom saying to me, “Boy, you just ask too many questions!”  I didn’t understand.  If you wanted to know something, how else could you get the answer other than asking questions.  She then said, “You know, you better watch out, someday you might just run out of words,” to which I replied.  “Well, Mama how many words are there?”  I guess somehow the questions have never stopped.

So with Dan’s announcement I began to think – wonder what the motivation is?  Keep in mind an earlier Houston Chronicle story reported the following:

“In order to reverse what injustice has taken place here, so that the victims of this fraud can be made whole, what we’re seeking is that the relief defendants relinquish their possession of assets to which they have no rightful claim,” said Timothy McCole,the SEC attorney handling the case.

Frishberg said he and Kaleta are no longer partners. (Although Kaleta was reported at his office as late as January 2010).  His firm and BizRadio will repay the debt under the terms of the promissory notes, he said.

“We’re eager to have them hurry up and appoint a receiver and get it going,” he said.

Despite Frishberg’s eagerness, neither BizRadio nor DFFS has made the payments required under the notes so far, the SEC’s lawsuit said. A receiver is likely to demand full repayment of the notes so it can be returned to investors.

Now, here are questions to consider (Mama would be proud):

  • Is this change BizRadio to Business 1110 a veiled attempt to avoid payment to investors as part of the SEC receivership and agreement?
  • Is Business 1110 the same as BizRadio and if so, does the operation of Business 1110 share in the BizRadio liability?
  • Salem purportedly bought 1110 AM back from Frishberg, where did that money go?  Did the SEC appointed receiver get any of those funds so that investors can be repaid?
  • Salem is supposed to be a reputable firm, wonder why they would enter into an agreement to lease the station to Frishberg considering the SEC scrutiny and attention?  Is there no other programming that could be broadcast on this Salem station?
  • BizRadio and Frishberg (along with related entities) were sued by Rehan Siddiqi for $18 million.  Is that business change (BizRadio to Business 1110) an attempt to avoid liability?
  • What liability does Salem incur since BizRadio apparently voided a lease/purchase agreement to Siddiqi?  Wouldn’t it make sense on Salem’s part to wait on any transfer until that lawsuit is resolved?
  • Most importantly, how does Frishberg “The Money Man” plan on making whole the investors who (as they put it) were part of a scam?  And, how is financially strapped Frishberg and BizRadio able to continue in his “new” format – Business 1110.
  • Oh, and where can I find Business 1110 on the web?  New format – old web site – old format.  Can someone please explain?

YOUR COMMENTS ARE WELCOME!


Dan Frishberg and BizRadio slapped with $18 Million Lawsuit – Rehan Siddiqi and Asia Vision strike back!

March 3, 2010

As if the problems (mostly self inflicted) of Dan Frishberg and BizRadio staying on the air, and trying to continue a format that has come under intense scrutiny as of late, was not enough – now comes Rehan Siddiqi with a lawsuit claiming damages in excess of $18,000,000.  As I state in my seminars – EVERY CHOICE HAS A CONSEQUENCE – and it would seem that Frishberg’s actions are producing some consequences that far reaching and have potentially negative financial implications.

The fundamental premise of the lawsuit is as follows (please note that this is an abbreviated report of the lawsuit):

  • The lawsuit claims: breach of contract, fraud and misrepresentation, conspiracy claims, breach of fiduciary duty, conversion and theft, and many many others.
  • Siddiqi CEO of Asia Vision claims he’s operated and broadcasts daily radio broadcasts in the Houston market for over 12 years.  And, broadcasting generated substantial revenue and was Siddiqi’s core business without which, Siddiqi’s business would be decimated.
  • Prior to November 2009 Frishberg et al approached Siddiqi about entering into a long term 5 year lease to broadcast on 1110 AM for $50,000 per month.  On November 25, 2009 Siddiqi – Asia Vision, Inc. entered into said agreement.  The agreement also provided Siddiqi a purchase option of 1110 AM for $3.5 million.
  • Defendants (Frishberg et al) needing capital approached Siddiqi asking for 6 months lease in advance and agreed that if such sum were paid they would reduce the monthly lease amount to $30,000 per month requiring a payment of some $180,000.  The agreement was signed on December 29, 2009 and Siddiqi, through a series of payments, paid and Defendants accepted the total of $180,000.
  • As evidence of acceptance of said agreement, Frishberg and BizRadio began broadcasting on 1180 AM on January 1, 2010 and Siddiqi – Asia Vision moved to 1110 AM for the entire month of January 2010.
  • Frishberg, unable to pay the deposit required by 1180 AM, removed Siddiqi from 1110 AM on February 2010 which resulted in the beginning of legal actions and the seeking of Temporary Restraining Orders – one of which Siddiqi won and the second round went to Frishberg.

From that simple background (none of which is new news) the lawsuit states:

Plaintiffs have contractual obligations that depend on their ability to broadcast and air their radio programming.  As a direct and proximate result of Defendant’s actions, Plaintiffs have lost and continue to lose customers and clients.  Plaintiffs reputation and standing in the commercial broadcast and radio programming business have been harmed and damaged, and will continue to suffer and incur injuries.  Plaintiffs have other business interests that are directly and indirectly tied to their ability to broadcast their radio programs, which interests are now being jeopardized.  Given the financial standing of the Defendants; their fraud and investment scams; their moving of funds and money to a number of related entities; their hiding of funds and assets; and the on-going Federal SEC proceedings, Plaintiffs injuries and damages appear to be, and are likely to remain, irreparable and uncompensable.  Defendants have demonstrated a lack of sufficient funds to stay on radio station 1180 AM, and have shown that they lack the financial wherewithall to compensate Plaintiffs for the damages they have inflicted, and continue to inflict, on Plaintiffs.  Asia Vision continues to lose advertising revenue and advertisers as each day goes by with Plaintiffs being defrauded by Defendants, and with Plaintiffs being unable to broadcast their radio programming.  Siddiqi’s radio personality has been and continues to be severely damaged as a result of Defendants fraud, breaches and on-going conspiracy.

When I saw this hit…I made an effort to interview Rehan Siddiqi (not that I expected him to accept – considering the stonewall that I’ve felt from Frishberg, but delighted he did).  The questions are listed in bold and Mr. Siddiqi’s responses are quoted in blue.  The interview follows:

Mr. Siddiq, thank you for agreeing to this interview.  I have several questions related to your lawsuit.  I hope that you will consider candid answers, however, let me state up front, this will be published in my blog and, as such, do not share answers with me that you do not wish to have in the public domain.  Are we clear?

Yes.

Before we get to the content of your lawsuit, can you share with me your relationship prior to entering into this agreement with Mr. Frishberg and BizRadio?

Absolutely.  Mr. Frishberg was introduced to me by a mutual friend…a friend of mine and also one of Mr. Frishberg’s investors in a fund, I think called Wallace Bajjali.

It looked like you were listed as a Vice-President with BizRadio sometime this past fall 2009.  What was your position?

Being in the South Asian market, I come across a lot of national and local advertisers and I was asked by Mr. Al Kaleta to bring in some more business and talk with some of my current advertisers or advertisers that I know.  They were struggling.  They had a great format and perhaps some of these advertisers would want to target that market.

So you were offered commission to bring them advertisers?

Yes sir.

And, how long did you hold that position?

Actually until the day they hijacked my frequency.

I’m confused.  They reflected you on the web site as a VP of Marketing, but basically that was a commissioned sales position?  You weren’t on the payroll as a salaried person?

No.  I was basically on a project to project commission.  And, to answer your question, I was not only listed on the web site, but was given business cards by Mr. Al Kaleta.

I’m sorry I missed that, but how long were you connected with BizRadio doing sales and so forth?

I was introduced to Mr. Kaleta and Mr. Frishberg some two years ago.  Mr. Sargent Hussain suggested that he had invested with a company that owned a radio station and that I might want to know them.

You sound like a fairly young man and your suit states you’ve been broadcasting for some 12 years.  How did you get into the broadcasting business?

I was one of the very first to initiate a 24/7 South Asian radio format.  I’m from a market that’s a minority.  There are some 300,000 or more South Asians in the market.  Prior to the 24/7 format, I would broker time on stations to serve my market segment.

Let’s move on to the lawsuit.   Did you approach Frishberg and Crider about leasing/buying 1110 AM or did they approach you?

Well actually Sargent Hussain told me that Mr. Kaleta would like to meet me and maybe there is a business deal that can be made out of 1110 AM.   I met with Mr. Kaleta and we had about a 45 minute meeting.  They were not happy with 1110 AM: (a) they felt that the broker ripped them off by selling them a station that was worth $3 to $3.5 million for $7.7 million; and (b) they were not happy with the coverage from the station. They said they would like to be on 1180 AM with 24/7 coverage and a strong signal.

About that time Mr. Frishberg walked into the room and says to Mr. Kaleta, “What ever deal you need to make with the radio station needs to be made through my CEO.  We don’t know this business.  If we knew this business well we wouldn’t have bought the station for $7.7.   Now we have a radio man working for us and his name is Ron Crider.”  Mr. Frishberg gave me Mr. Crider’s phone number and said he would be in town sometime next week.

When you were approached about leasing 1110 AM – do you think now that you were being scammed at the beginning or do you think they were serious?

No…I thought they were very serious.  They had a good business plan.  The reasons they gave me for why they needed to be on 1180 AM and why I needed to be on 1110 AM and how it was going to help them and how it was going to help me … it just completely made perfect sense.

In your opinion, do you think that the funds requested (that you paid) some $180,000 were requested so that BizRadio and Frishberg could pay 1180 AM the deposit they required?

Well, they desperately needed money.  They were not getting their RIA at the time and needed cash flow.  They did not have money to pay for their payroll.   There money was with Fidelity and I was told they were going to be changing banks.  There money (with that change) would start making their RIA again and starting January 15th (2010) things would get back to normal because they would begin again getting their commission.  Apparently, that didn’t happen so they did not give 1180 AM the letter of credit and got kicked off the station.

Do you think that Frishberg truly wanted to broadcast BizRadio on 1180 AM?  If so, how did he think he could do that considering the financial meltdown that seems to have been already started when you entered into the lease?

If Frishberg didn’t want to be on 1180 AM then why would he sign a contract and give them $75,000 to broadcast in January.  I think he expected the financial maneuvering to work and he would be able to meeting the demands of 1180 AM.  At that time Frishberg was, I think, on in Dallas and certainly on in San Antonio along with Crider’s other stations through his network.  I think he got stuck with Fidelity cause they truly did not want to do business with him and he hoped the other company would quickly come in.

I had no reason to believe that Frishberg would be a problem.  To be honest I had no reason to believe that Frishberg was a scam artist, a liar, or that there was a whole fraudulent thing going on with these investors until the day he surprised me in the court by perjuring himself by saying that Ron Crider was not the CEO.

You state in your lawsuit, that Daniel Frishberg has interfered, and continues to interfere, with your business and contractual relationships.  How?

Number 1 – he took my station away.  Number 2 – all the business that I had, all the contracts that I had I basically have lost.  Plus since I had paid six months in advance, I felt that the money coming in from ad revenue would be positive cash flow that I could use to pay my loans and contracts.  Now I will be forced to default on my obligations.

The radio business is about consistency.  The contract that I have right now is a month to month contract.  I don’t even have a contract for the month of April.    I cannot sign a contract with my advertisers for April.  I have lost sponsors and advertisers.  I can’t provide a letter of credit to any station.  Why?  Frishberg took my money.

You state that Frishberg committed PERJURY in his testimony before the court?  Give me an example of what you mean?

Frishberg stated that Ron Crider was not the CEO for BizRadio.  Here’s what I believe.  They introduced me to their CEO.  Every meeting I’m in they either see me talking to him or are sitting with me in that meeting.  The money that I gave them…they put that in their account.  They send out press releases.  They put it on their web site.  They give me a business card.  Ron Crider has a business card.  Frishberg is in the meeting.  Kaleta is in the meeting.  The entire office staff is in the meeting.  Flyers, advertising and radio promos were put together.  I would never believe in the world that Frishberg was going to come in the court and say “Crider was never my CEO.”

He shocked me.  Now I am going to rewind from the day I started talking to him.  Everything this man said was a lie!

Likewise, you claim that Frishberg and BizRadio (the Defendants) stole money from you.  In the lawsuit it is referred to as Conversion and Theft.  Do you think that was there intent at the beginning or do you think that it was a result of the collapse of Frishberg’s financial position?

Once somebody lies to you, then when you look back you begin to think that all they told you was a lie.  Was it set up on me from day one, I truly believe that now.  He was trying to solve his issues, his problems and basically he did that with my money.  He (Frishberg) decided to send me an email, late in the night, hours before he was going to take me over, to give me notice.  I begged Mr. Kaleta at 1:00 o’clock in the morning, “Let me go on the air for one hour and say, hey guys there’s a problem there’s a situation, but we’re going to get that handled.”  But NO!   He was more concerned to impress his $300 million dollar investors – to let them know that Frishberg was still on the air.

He (Kaleta) decided to get me out of business.

GALLAGHER COMMENT:  I am amazed by this revelation.  I thought that Kaleta was to have NO CONTACT with investment advisers and since Frishberg and BizRadio had been enjoined by the SEC receiver – that seemed to be a gutsy – NO STUPID move.

You also claim CONSPIRACY.  From what I’ve seen and read, Ron Crider was active with you in the negotiation of the lease purchase option for 1110 AM.  Do you think Crider conspired as an agent of Frishberg?

No…I have nothing but respect for Ron Crider.   Mr. Crider has treated me with respect and fairly.

When you paid the money to BizRadio who was involved?

Mr. Al Kaleta.  He was the one who took the payment from me.  Now the question is, Mr. Al Kaleta offices next to Mr. Frishberg gives this money to Mr. Frishberg who gives it to Entravision (1180 AM).  So yes, they were using my money to pay for there other bills including the one month lease to 1180.    Only $75,000 went to 1180.  What happened to the rest of that money?  It went to payroll, office rent, etc.

Now knowing that Mr. Kaleta was to have nothing to do with Frishberg and BizRadio, with the SEC review I think they are in more trouble that they ever thought they would be.

What do you think the outcome of this will be?

You know, I really don’t know what the outcome of this lawsuit will be.   For all the fraud, scam and con artists these people appear to be, I would be glad if investors, that Mr. Frishberg is trying to get and scam, could see the facts and protect themselves and their investments.

BizRadio and Frishberg seems to lack funds to operate what they have, how do you think that you’ll gain financially if you are the victor in this lawsuit?

First, I need to be compensated for my loss, if that can truly happen.  But, if I can save the millions and millions of dollars from future potential investors from being scammed then I will have success.

GALLAGHER COMMENTS:

The story continues to unfold.  What do I think about the Siddiqi lawsuit?  While not an attorney, he damn sure has a case.  Where there is smoke there is fire and I feel soon this one will be blazing.

  • One, I know that the SEC receiver is looking in every nook and cranny to find funds to make who investors who have been defrauded.
  • Two, I would not be surprised if the SEC investigation focused their white hot spotlight on Frishberg.  My guess is it is there, but no one will admit to it.
  • Three, if I were an investor, for any liquid asset I had, I would take it from Frishberg and invest elsewhere.  Think about this…the folks who liquidated their investments with Bernie Madoff are likely better off than those who rode that sinking ship all the way into the ocean.  Frishberg has too much baggage now to truly be effective.
  • Four, I AM AMAZED that the criminal investigative arm of the SEC, FBI or IRS hasn’t yet jumped into the fray.  Seems that Kaleta got a bit of a pass.  Of course, the criminal side has a much longer statute of limitations to do their work than the civil side, so that might explain why civil first.  God help Mr. Frishberg if he finds himself on the other end of criminal investigators as they usually get their man.  Just ask “The Talented Mr. Madoff!”

As I’ve said in past blogs…MORE TO COME.

AND COMMENTS ARE WELCOME.


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?

Marketing

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 (www.Amerisciences.com), 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 AmeriSciences.net 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.  http://www.amerisciences.com/

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.

UPDATE:  IT APPEARS THAT THE MLM PROGRAM WITH LYNN SPERRY HAS BEEN REMOVED FROM THEIR SITE???