Ethics require Transparency – Dan Frishberg is caugh up in the Illusion of the Scam

September 21, 2010

They say it takes one to know one!  How many times do I wish that weren’t true, but in the case of Dan Frishberg and the BizRadio saga, I am uniquely qualified to report as I’ve (regrettably) been in his shoes and dealt with the consequence – federal prison.  Just last week, in doing a program for the US Navy, I was asked: “What did you learn in prison?”

Answer: “I learned three things: (1) every choice has a consequence! (2) often we get caught up in our own illusions and fail to see or acknowledge the truth; and (3) Success is measured by the impact we have on others, not by the stuff we acquire over our lifetimes.”

I freely acknowledge that I am not proud of my past choices from 1986 – 1989, but I have been honest in what I did, why and the lessons that were learned as a result.

So…where does this take us in the case of Dan Frishberg and BizRadio?

I was told by several folks that Dan has become frustrated at the publicity that he’s received.  When either BizRadio or Dan Frishberg is searched on the internet, articles (some mine) appear which shine a light of truth on what he, Al Kaleta and David Wallace have done to unsuspecting investors through their BizRadio scam. (Perhaps it didn’t start as a scam, but certainly became one by all accounts).

So what did Dan do?  Instead of looking at the truth of the matter, he’s continued his journey into the fog of illusion and enlisted the help of other bloggers to blog positively about him and the work that he does.  In other words, he’s trying to fill the media outlets with more illusion so that he counteracts his devious actions – currently being investigated by authorities.

One new blog by Mike Wazowski is a feeble attempt to shine a positive light on Dan.  Mike states the following regarding Dan Frishberg’s plight:

I have a feeling Dan “The Money Man” Frishberg knows just what Ray Donovan meant, even though his ordeal has been played out on a smaller field. Dan’s is a familiar voice on the radio and TV, where he has been a frequent commentator of Fox Business and CNBC, among others. If you want to see what caught my attention, take a look at this YOUTUBE VIDEO of The Money Man’s television appearances from 2008 and 2009.

Unfortunately for Frishberg, fame came with an opening for shady operators including a con artist who named himself CEO of Dan Frishberg’s radio enterprises and proceeded to try to sell the home station of his radio show, “The Money Man Report”. Also finding his way out of the woodwork is a blogging Lone Ranger who has spent more than a year on his lonely crusade against Frishberg’s reputation.

Let’s see – to be clear Dan does have commentary on YouTube, but then again anyone can have YouTube video.  What I notice is the total absence of Dan Frishberg as a guest of any legitimate media outlet since he’s come under the scrutiny and investigation of the SEC and his beloved radio station – BizRadio is effectively up for sale under the direction of an SEC Receiver.  Has Fox or CNBC had him on in 2010?  Sure would be interested to know if they did or perhaps they’re working on a new segment related to Dan on say – American Greed?  Just asking?

And, let me get this right – now Ron Crider is being implicated as a self appointed CEO “con artist” – hum…somehow I don’t think the fact bear out that claim.  But then again, I’m not yet sure that Mike is holding true to the title of his blog – Truth in Blogging.

Ah…but there’s more.  Mike now wishes to take a swipe at me.  Trust me, I’ve had many swipes, but this one is a bit comical.  Here goes Mikes comments:

Apparently a paid propagandist, he calls himself a “home grown journalist” and claims to be an Ethics Consultant. But his “reports” are nothing more than innuendo backed up by vague sources like “numerous phone calls and emails”, violating the first rule of the Society of Professional Journalists’ Code of Ethics. Of course, since he’s bucking the Mainstream Media by, alone among all the business reporters and editors in America, portraying Dan Frishberg as a villain and not a brilliant financial strategist, he may think he is not bound by “professional” ethics.

This deceptive blogger says he is a CPA, yet he is apparently also a convicted felon. I don’t understand how those go together, but in any event, he pretends not to understand the difference between capital and equity when he is straining to understand how an investment fund with more than $50 million in real estate could have also invested in BizRadio.

So for TRUTH IN BLOGGING – let’s set the record straight:

  1. I am not a paid propagandist – NO ONE PAYS ME TO WRITE WHAT I WRITE.  As you might notice, my blog is free and not used as a site for advertisers or sponsors.  So – Mike you’re wrong here.
  2. He calls himself a “home grown journalist” and claims to be an Ethics Consultant.  Well…I suppose I am a bit of a HOME GROWN JOURNALIST as are most bloggers, but to clarify, I also have been published in numerous national magazines, featured on numerous talk shows including but not limited to CNN, CBS and NPR radio as well as TV appearances.  AND I AM A PAID ETHICS AND FRAUD PREVENTION CONSULTANT.  Again, Mike you might wish to check your facts before you assume that I am not what I say or appear.
  3. His “reports” are nothing more than innuendo backed up by vague sources like “numerous phone calls and emails.” VAGUE SOURCES – hum, Judges orders, SEC Receiver reports, Written Documents and interviews by those who have been victimized by Dan Frishberg.  Wow…I guess those are insignificant in comparison to what Dan Frishberg says is true (ah…the fog of illusion).  Hum…I guess we’d never have had Watergate reported by Woodward and Bernstein if we could not report from “vague sources”.
  4. This deceptive blogger says he is a CPA, yet he is apparently also a convicted felon. – Mike you really miss the boat “Big Kid”…as you are apparently incapable of doing simple research?  I WAS A CPA – created a PONZI SCHEME and SERVED TIME IN FEDERAL PRISON.  Wow…there’s no NEWS HERE!  You report as if you’ve found something.  Sorry, but you didn’t.  Rather all you’ve done is show that I am exactly who I say I am – I am transparent.  Clearly, I’m not the one caught in the fog of ILLUSION.

So…to those who follow my reporting on Dan Frishberg, David Wallace, Al Kaleta and BizRadio … I will continue to do so and appreciate all the help I’ve been given along the way.  There’s an old Elvis song that says, “what you do in the dark, will be brought to the light” – and in Dan’s case that is true.

TRUTH:  “Keeping it real by bring you the truth!  Mike Wazowski” – Mike may be a real person (I honestly don’t know), but what is true is that it appears that Mike is no more than a mouthpiece for Dan Frishberg – spouting reports that are designed to counteract the light of truth that the Houston Chronicle, I and others have been shinning on Dan.   Nice try Mike…but in the future, call me and let’s discuss the truth…my number is published!

Special Strategy Session featuring Dan Frishberg – Really!? Who would trust a man investigated for potential fraud by the SEC?

August 17, 2010

I find myself amazed.  Amazed that Dan Frishberg – the subject of an SEC investigation – the centerpiece of a substantial Houston, TX fraud – would still have the guts to tout himself as a major source of money and investment advice.  I suppose that there are times when reality just isn’t reality – especially when it comes to Dan.

Strategy Session featuring Daniel Frishberg
Wednesday, September 22, 2010
7:00 p.m. to 9:00 p.m.
Space is Limited. Reserve Your Seat Immediately!!!
To RSVP Contact Sonia Joao

So it seems that Sonia, Dan’s former employee is not employed by Barrington.  Convenient and raises questions as to whether Barrington is not just a pawn in the massive fraud that Dan is effecting.  Just asking?

Note: The date has been changed. If you have already signed up for August 26, your RSVP has been counted and you will be notified of the change.

Wonder if this date change is evidence that Dan did not get the turn out that he expected on August 26th.  Maybe folks in the Houston area are wising up to Dan’s tricks of illusion and deception.  Just asking?

Dan Frishberg would like to invite you to attend a special Strategy Session event. More than ever now, with all of the current political and economic uncertainty, investors must be prudent with their money. Come hear about ways to invest safely in an unfamiliar market and get a few capital gains picks as well.

Sorry, but what a crock of (you know what).  Uncertainty!  Really?  What is uncertain is what Dan will do with your money once he gets his clutches on it.  Buyer or investor beware!

Join us on Wednesday, September 22, 2010 from 7:00 p.m. to 9:00 p.m. at the Houston City Club for our new strategy event in Houston. It’s free to attend, but if you want a seat, you must RSVP.

September 22, 2010
7:00 p.m. to 9:00 p.m.
Space is Limited. Reserve Your Seat Immediately!!!
To RSVP Contact Sonia Joao 713-490-8728

This Event is FREE but you must RSVP
Contact: Sonia Joao at
713-785-7100 or

What can I say…when a person like Dan cannot face reality and take positive actions to help those who have blindly been defrauded…well there is no reason for folks to call themselves victims if they listen to Dan now.  Buyer or investor beware!

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 –

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.


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:

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:


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.


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?


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?


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?


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…!


BizRadio to Salem Communications Business 1110 – Frishberg’s Fraud Follies?

July 13, 2010

Have you even awakened in the morning with breath so nasty that you had to brush your teeth before talking to anyone?  I mean “nasty breath” that would turn your dog against you?  Well…if I were a betting man, I would say that Salem Communications (purchaser of BizRadio 1110 am from Dan Frishberg) either has stinky breath today or is smelling it from their “good buddy” Dan Frishberg.

This story just keeps getting better.  I will say (for those who think I am jubilant about what’s happened to Dan) – I’m not!  In fact, frankly for Dan and his family it is sad.  Sad that Dan is so caught up in himself that he is digging a hole so deep that few could ever recover.  But…let’s look at what has happened so that those of you who are following can judge for yourself – whether you think Dan Frishberg is more focused on his well being than being ethical about his transactions and protecting the many who invested their savings only to find it lost.


On July 12, 2010 Rehan Siddiqi and Asia Vision, Inc. brought suit against Dan Frishberg, Al Kaleta, Elisea Frishberg, Salem Communications, BizRadio and a host of related companies and individuals for tortuous interference, fraud, conspiracy, perjury, theft and a host of other claims. Now…I am not judge nor do I have any connection with the outcome of this claim by Siddiqi.  However, the case illuminates and illustrates patterns of behavior that I would judge to be unethical and probably fraudulent.  So…let’s look at what we do know and you be the judge.


Sure seems like a long time ago, but in late 2009 Rehan Siddiqi (Asia Vision, Inc.) entered into an agreement with Dan Frishberg to lease – purchase – 1110 AM.  Siddiqi paid Frishberg a deposit and the lease in advance for six months – the sum – $180,000.  The agreement provided that Siddiqi would have the option to purchase the station for $3.5 million.  The agreement can be clicked on here.  Frishberg – Siddiqi – Biz Radio Purchase Agreement

No only was there the purchase agreement but the simple terms were listed on the agreement at the end of December 2009.  See here: BizRadio lease purchase agreement

Now why would Frishberg agree to sell his station to Siddiqi?  On the surface it seems clear: (1) Frishberg needed the money!; (2) Kaleta, Frishberg’s financial source of funding (from now some real unhappy investors) was busted by the SEC and Dan was broke; (3) if Dan could move to a more powerful station for just the cost of monthly lease…he might survive; and (4) Siddiqi was willing to provide a quick influx of cash that Frishberg desperately needed.  Understand now?

The announcement of this transaction is reflected here in an email announcement.  BizRadio Station Change Talk about spin…

Then it all falls to pieces.  Apparently Frishberg – seemingly happy with his new station – can’t pay or provide a letter of credit to continue and thereby is facing the loss of his show – the same show that is a feeder to his investment business – the business that feeds he and his family.  So what does he do?  What any self-respecting unethical person would do (sorry, but at times I have to share my feelings) – he screwed Rehan Siddiqi.  He kept Rehan’s money and kicked him off the station that he, just a month before, leased with an agreement to purchase.  See statement from Ron Crider.  Ron Crider Statement

Outcome…Rehan Siddiqi brings suit against Daniel Frishberg and BizRadio for $18 million and YES this is old news but it sets the stage for the rest of the story…


On March 2, 2010 Rehan Siddiqi filed notice with agent for Salem Broadcasting of his intention to exercise his option under the lease purchase agreement.  His exercise would have Siddiqi paying $3.5 million for 1110 AM.  The proceeds would have been a cash sale and represented a substantial inflow of cash to BizRadio and their respective investors – cash that would have been much needed to those who have lost literally millions.  See offer here.  Siddiqi Purchase Exercise

But according to the lawsuit there are several interesting twists!


BusinessRadio Houston, LLC forfeited its charter to exist, operate and do business as of October 30, 2009.  WHAT?  That’s right…Dan Frishberg continued to operate and do business as if he had the protection of his LLC, but it appears that it lapsed and he was flying blind or “unprotected” if you will.  The BIG QUESTION this raises is – is Dan Frishberg now personally liable for the actions of BusinessRadio Houston, LLC – an entity that seemingly conducted business through at least part of March 2010?

Somehow I see more lawsuits being filed and perhaps the concept of “piercing the corporate veil” is effectively won.  This will be interesting to watch.


Keep in mind the date of the Siddiqi offering – March 2, 2010.

Frishberg (perhaps realizing that his old corporation was nonexistent) filed to do business as BusinessRadio Houston Licensee, LLC on March 4, 2010.

O.K. so Siddiqi makes the offer on March 2nd and two days later Frishberg forms a new company in order to sell what his old company (remember the one that ceased to exist back in October 2009) could not sell.  Hum?

Now…I’m curious as to legally what happens to the license if the entity that holds it ceases to exist?  Who owns the station?  Who has access to the assets?  Who is liable for the actions of the station when the corporate enterprise or LLC fails or dies?  This is getting more twisted as each day passes.


Oh my…now it gets interesting.  It is fairly common knowledge among those connected with Dan Frishberg and BizRadio that Salem and Dan were discussing the transfer of the station back to Salem back in February of 2010 even though Siddiqi had a purchase option agreement signed by Frishberg at the end of 2009.  So on March 5th – three days after Siddiqi exercised his purchase option for $3.5 million the station was sold FOR SUBSTANTIALLY LESS THAN THAT from Frishberg back to Salem.  Here’s the purchase agreement.  Salem Purchase Agreement


(1) Payment of $800,000 to Frishberg

(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).  Now why they didn’t foreclose and take it back I still, to this day, don’t know.  And…forgiveness of debt creates a taxable event, so I wonder what position the IRS will take on this or if Dan will ignore this and expose himself to tax fraud?

(3) An agreement of $1,640,000 in air time for Frishberg to keep his program on the air – again it would appear that this is a taxable transaction, but that’s Dan’s issue?


Let me get this straight…Dan Frishberg who said BizRadio was a loss leader: (a) sold his RIA or DFFS to Bill Heath (ostensibly to protect the quarterly income it generated) instead of having that income inure to the benefit of the BizRadio shareholders; (b) turned down a $3.5 million offer (again that would have benefited those who trusted Dan by investing in BizRadio); and (c) he structured a deal that clearly benefited him – so he could continue his show and remain the master of illusion.  Now is that in any way ETHICAL?


Well…it appears that the SEC is taking a different look at this whole agreement between Salem and Frishberg (perhaps as a result of this new suit and the information it uncovers).  It looks like Siddiqi wasn’t just filing a lawsuit for the joy of creating a legal nightmare.  Rather, Siddiqi seems to have a legitimate claim.  Several things seem for sure:

  1. The SEC (according to my sources) seem to feel that Frishberg might have fraudulently conveyed the station for purposes of hiding assets and personal gain.  Keep in mind the SEC has no criminal authority, but the use of “fraudulently” might infer that others who do have criminal authority are waiting in the wings for Dan “The Money Man”.
  2. The SEC Receiver would appear to be interested in seeing if Siddiqi (or perhaps other parties) are interested in the station for a sum greater than $800,000 which (obviously) would give the SEC a greater pool of funds from which some form of “restitution” shall we say can be made.
  3. Salem is a substantial entity and while BizRadio is defunct – Salem’s pockets are deep – and one might assume that if Salem somehow “conspired” as the lawsuit alleges the outcome might be beneficial for those who invested in BizRadio.
  4. Likewise, if it is deemed that Salem “tortuously” interfered with Siddiqi’s agreement with Frishberg – again the pocket book might be open either to damages or a settlement – either of which changes the landscape of what seemed somewhat hopeless to date.


Dandy question!  The twist and turns seem, in the matter of BizRadio, to always bring a new challenge and varied and different outcomes.  But, if I were a betting man (and I am not) I would suggest that the following would be logical outcomes:

  1. The SEC Receiver will make dog gone sure that he gets his money for the defrauded shareholders of BizRadio…so the station will be sold for more than $800,000 (I think) and the SEC Receiver will get those funds.
  2. Salem Communication will clearly want to make this go away.  The publicity (and I understand that several media outlets are considering stories) will do no good for Salem.  In fact, I have had multiple inquiries asking why Salem wanted to get into bed with Frishberg considering all the baggage he brings with him?  Damn good question!
  3. Siddiqi will either end up with the station for some amount (likely less than $3.5 million) as it’s value and brand has diminished with all the negative publicity surrounding it or he will end up with a settlement for Frishberg and Salem’s interactions in deference to Siddiqi’s agreement.
  4. Frishberg continues to dig his hole deeper and, yet once again, has shown the SEC that he cares little for those who invested in his vision and cares mostly for Dan Frishberg.  The outcome – I predicted and continue to hold to the belief – the SEC will bust Frishberg and strip him of any investment license he might currently have.  That’s likely the most they can do.
  5. I believe the law enforcement community (at the Federal level) will indict Dan Frishberg and, perhaps, Al Kaleta for wire fraud, conspiracy and other crimes – especially if there is sufficient notoriety with this case.  Could be wrong here, but it’s hard to believe that the justice department will just let this one slide – especially since Frishberg has stayed on the air and continued the charade.

Stay tuned…there’s plenty more to come including an interview with Rehan Siddiqi.  IF you wish to read the Siddiqi lawsuit a copy is here.  Siddiqi Lawsuit July 2010


BizRadio – Another day another Lawsuit! Daniel Frishberg’s legal issues continue…

June 2, 2010

When the flow of money stops the crash is deafening!  Just ask Bernie Madoff, Sir Robert Stanford, and a whole host of others who either have faced or are facing the long arm of the law for their fraudulent financial actions.  Daniel Frishberg is NO BERNIE MADOFF – he’s not that smart, but many who have contacted me over the course of the past six months have said that he is that crooked.  Guess…time and the federal government will ultimately be the judge of that.

What is certainly true is there is a long line of folks who just want their money back.  They did not wish to be scammed.  They did not wish to own a failing radio station.  They did not wish to have their investment savings manipulated by someone (or group) that had first and foremost in mind their own self interest.  All they really wanted was to invest their hard earned dollars into something that would give them a safe and secure return.  And, folks RADIO ain’t it!

Now comes Plaintiff – DRA CRT POST OAK, LP – the Landlord for the property formerly occupied by FRISHBERG FINANCIAL SERVICES, INC.  Seems that Frishberg leased the property located at 3050 Post Oak Blvd., Houston, TX starting on December 1, 2002 with an expiration date of May 31, 2011.

Oops…Daniel’s funds dried up.  Now that is no great surprise.  It started when Kaleta got in trouble with the SEC and hasn’t stopped yet.  Did Frishberg create a Ponzi scheme?  I’ve been asked that a number of times, both in emails and telephone calls.  Answer: well…kind of.  To me, it seems that Frishberg, Kaleta and others really created more of an investment scam.  I’d call it “investment adviser fraud” – in that, they sure enough sought investor dollars that – for the most part – funded their money losing business so that they could attract more investment dollars.  From that perspective, it is a type of Ponzi scheme, but in reality they just scammed folks by making them believe that they were investing in something that was low risk and, almost a sure thing!  Either way you cut it – it was a scam and clear self dealing.  But back to the lawsuit…

CAUSE OF ACTION ONE:  $90,035.59 left owing on the lease creating the suit against Frishberg Financial Services, Inc.  Demand has been made and according to the document, Frishberg Financial Services, Inc. refused and continues to fail and refuse to pay the amounts due and owing pursuant to the terms of the lease.

CAUSE OF ACTION TWO:  Claim amount of $286,321.87 for anticipatory breach of lease with Plaintiffs claiming they can prove the reasonable cash market value of the Leases Premises for the unexpired term of the lease.

CAUSE OF ACTION THREE:  Plaintiff claims pre-judgment interest at the rate of 18% per annum as allowed by the statues of the State of Texas.

CAUSE OF ACTION FOUR:  Plaintiff requests recovery of reasonable attorney’s fees.

Total request excluding attorney’s fees, court costs, pre-judgment and post-judgment interest, is $376,357.46.

THE QUESTION really is what effect the involuntary bankruptcy and request by the SEC Receiver will have on all these lawsuits?  Rehan Siddiqi sues for $18,000,000.  Several individual lawsuits have been filed and now the Landlord.  There seems to be no end to the claims against Frishberg.

BUT HERE’S HOW IT WILL END…  Daniel Frishberg will eventually lose his license as a Registered Investment Adviser and be admonished by the SEC just like Al Kaleta.  My guess is that will happen within the next three months as the SEC has less time to take action civilly than others do criminally.  Frishberg will effectively be banned from using his knowledge and talent to sway investors.  The radio run will be over and “the Money Man” will be no more.  Following that, I believe that criminal law enforcement entities will take issues with both Daniel Frishberg and Albert Kaleta into a different realm.  In fact, likely the investigation and work that the Receiver will continue to do will form the basis for a series of criminal charges that will be levied against Frishberg and Kaleta.  Based on other cases, it would be difficult not to convict Frishberg and/or Kaleta (I suspect both) on mail fraud, wire fraud and, perhaps, investment adviser fraud.

With all that is happening in the financial markets, Frishberg has far too much notoriety to avoid criminal prosecution with prison time that follows – least that’s the way it seems to me.

BizRadio – Due Diligence and the David Wallace Investment Funds

May 17, 2010

November 15 2007 – a letter sent to investors from David Wallace stated the following:

The third quarter of 2007 was very active for both the ongoing due diligence and development activities for Fund II’s current portfolio, as well as the future investment activities of Fund II.  During this quarter, Fund II completed one real estate development investment.  The following table reflects the equity invested in such companies:

The table reflected that of funds invested through June 30, 2007 — $3,657,170 was invested in BizRadio out of a total of $6,994,170 or over 52% was invested in one investment (and that wasn’t real estate).  And for Quarter 3 2007 an additional $1,190,047 was committed to BizRadio – again over 50% of the committed funds for Q3 2007.

The investor report goes on to say:

BizRadio Network – BizRadio provides both the creation and distribution of high-end, talk radio “business” content to an affluent audience.  The ability to reach the well-educated, affluent market is a unique niche that can be served by very few stations.  BizRadio is successful in this effort.  The distribution of the current content is a simulcast on 1320AM in Houston and 1360AM in Dallas-Fort Worth.  The current strategy is to secure capital to acquire (rather than lease) the various stations, which will result in a savings of approximately $200,000 per month by eliminating the respective lease payments.  The future business strategy is to expand the content product offering (to add a newsletter, stock-tip market letter, day-trading academy, pod casts, etc.) and to broaden the distribution network and acquire additional stations in specific key markets.  Two radio stations (one in Houston and one in Fort Worth) were secured through letters of intent during the second quarter of 2007.  However, the due diligence findings of the Dallas station caused BizRadio to terminate its discussions, and the Houston station is nearing the final negotiation of a definitive agreement.  It is anticipated that the acquisition of these stations will be funded by 50% equity, and the remaining capital will come from third-party purchase money debt.

Now for some time you know, especially for those of you who read this blog series, that I’ve been asking questions related to David Wallace’s involvement with BizRadio.  I am, and have been, confused – cause on one hand it seems that David has been a continued source of funds for BizRadio – and for many those investments have turned into substantial losses – perhaps unrecoverable losses.  On the other hand, David has said that he (as an investment general partner) did his due diligence and, seeing the ship sinking, tried to take the helm and revive BizRadio in a desperate situation.


I have been told on more than one occasion that David Wallace had lost his objectivity when it came to Al Kaleta, Daniel Frishberg and BizRadio.  David, so I’ve been told, got hooked into the Daniel Frishberg vision of BizRadio (I guess we can say he drank the Koolaid) and saw this as a way to attract continued investors into his funds.  Specifically, I was told that Daniel Frishberg effectively told David Wallace that he would funnel investors to him to help him with his “funds” (find investors so to speak) as long as he would agree to funnel money back to BizRadio.

David, on the other hand, has said that he saw the value in BizRadio and felt that the investment was worthwhile.  That’s fair.  But, here’s the rub.  If you are putting a fund together, would anyone who has a fiduciary responsibility to his/her investors ever invest 50+% into one company and, if so, into a company that had then no substantive tangible assets?

I asked David the following in an earlier blog (to see the full blog click:

9. I have been told that your office in Houston was across the hall (I haven’t been there David so my characterization may be inaccurate) from Dan’s BizRadio, but you weren’t seen much in his office.  Considering your funds – certainly from what I’ve been told the Laffer, Frishberg, Wallace Economic Opportunity Fund had substantial interest in BizRadio – were you active in the operation?  If so, how?  If not, why?

DW Responds – I was approached by Al when we were creating a real estate investment fund in about 2005. AL Kaleta and Daniel Frishberg indicated that they have some clients that they wanted to allocate some of their funds into real estate, and they liked our team, track record, etc. So their firm ( Frishberg , Jordan & Stewart Advisors at the time) provided some investment capital (about 70%) on the first Wallace Bajjali affiliated fund. This fund acquired 13 real estate properties. As we started to look at creating a second fund, we prepared a $10 million offering prospectus and Daniel Frishberg and Al Kaleta indicated that they felt that they could raise the capital for the fund. At some point a discussion ensued about the convenience of Wallace Bajjali leasing space on the same floor as Frishberg , Jordan & Stewart, such that if their clients would like to meet the principals, then we would be more accessible, than if we were in another location. Ultimately, the second fund was amended to raise beyond the $10 million, and up to $25 million.

Now here’s where the numbers just don’t add up.  David says, “AL Kaleta and Daniel Frishberg indicated that they have some clients that they wanted to allocate some of their funds into real estate, and they liked our team, track record, etc.” So according to David the attraction was that they would bring David clients.  Seems that we have a validation of what has been said to me on several occasions – David was lured with the promise of money for his funds.  Keep in mind those words that I have shown in “blue” here are David’s words not mine!

Yet as Daniel Frishberg and Al Kaleta funneled money into David’s funds – David (claiming due diligence) was pouring money right back into BizRadio.  And for what?  Was that money earmarked for the “acquisition” of the station (at least the license would be a tangible asset – of sorts) or were the funds being used to subsidize current operating expenses?

I’m sorry, but I don’t see true evidence of “due diligence!”  What I see is a young energetic individual (David Wallace) being caught up in the attraction of the massive illusion that Daniel Frishberg and Al Kaleta created.  David (as I see it) seemed to be interested in gaining a new source of investor funds and was willing to “sell his objectivity” (through funneling money back to BizRadio) for that gain.  Some may say that my opinion is skewed and inaccurate, but I think when this is all said and done – and the final chapter is finished – we will see that I’m closer to right than wrong.  How else can one explain such substantial investments into BizRadio in contravention of any reasonable investment advice related to diversification.  Time after time David Wallace has seemed to ignore the simple rule of diversification in favor of funding the “project” of Al Kaleta and Daniel Frishberg called – BizRadio.

NOTICE I started this off with information from 2007.    But David (again from the earlier interview) stated the following:

I began to voice my own criticisms in mid- to late 2008.

Around the 4th quarter of 2008, and continuing into the 1st quarter of 2009, it became obvious based on conversations with BizRadio employees, and ultimately Daniel Frishberg, that this was the case. At this time I worked with the existing employees of BizRadio to create a restructuring plan and “Path to Profitability” (that was provided to Daniel Frishberg and Al Kaleta) to eliminate the operating losses, but more importantly, to eliminate any conflict of interest between the RIA and BizRadio. Although there was an outward appearance that it was being well received and implemented, in the end, I feel that it was summarily dismissed.

If I were an investor I would be furious.  First, there’s the issue of diversification – grade (F).  When over 50% of the fund is invested in one asset we’ve got a problem.  Mind you, this was true at least for Q3 of Fund II in 2007 and also was true in another fund where BizRadio represented over 60% of the funds investment.

But…if, as David says, “I began to voice my own criticisms in mid- to late 2008“, then why would he not call a halt to future investments into BizRadio until his voice was heard?  David was the primary source of BizRadio’s operating capital and therefore, effectively, was in control.  The reality is – without David Wallace’s continued investments into BizRadio – BizRadio would have collapsed much sooner than later and millions of current losses would have been avoided.  In my opinion, David’s insistent involvement with BizRadio, even after he “voiced criticisms” reflected a lack of independence as a general partner in his funds and therefore will (likely) put him at personal risk for civil lawsuits.

The larger question, in my mind, is whether David Wallace will face criminal conspiracy charges – assuming criminal charges are brought against Al Kaleta, Daniel Frishberg, and Elisea Frishberg.  Did David conspire willingly to defraud investors by continuing the charade that BizRadio had a viable business plan that had a chance of success and thereby provide reasonable assurance that an investor could gain a reasonable return on their investment?

Here’s an example…  I got a call from a “former” CPA.  Seems (in short) he was a CFO of a company.  He felt that the company was doing something unethical and quit.  (By the way that was 5 years ago).  Turns out 5 years later that the US Attorney took down the company for illegal activities.  But the US Attorney also went after the former CFO.  Why?  Conspiracy.  By not reporting the fraud, he conspired to commit fraud.  Result?  Plea conviction with probation and the loss of his license.  Moral of the story…  If that guy can be convicted – wonder what would happen to David considering that the flow of defrauded investor funds seemed to continue to flow from his funds well into 2009 when it was clear that the ship was sinking?

What ultimately happens with David Wallace?  I honestly don’t know.  I suspect that his willingness to cooperate might be just the ticket to save his skin.  As David said, “…the connection by our investment into BizRadio, does not represent our finest investment hour.” Sometimes you have to call them as you see them.  I think that David’s statement is a major understatement.  All evidence suggests that David was played like a fiddle by Kaleta and Frishberg – being seduced into being a “money laundering” mechanism for Frishberg and Kaleta to convert their investor sources into BizRadio funds – all the while trying to seem as if there was independence of investment activity in play.

Independence – not a chance.

Due Diligence – no way.

Greed and hubris – likely!