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Radio Ponzi Schemer

Discussion in 'Consumer Fraud & Scams' started by Bruce McFarland, Mar 15, 2021.

  1. Bruce McFarland

    Bruce McFarland Law Topic Starter New Member

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    Jurisdiction:
    Texas
    Here's the basis of my post:
    Radio host ‘Doc’ Gallagher gets 25 years for bilking Christian investors out of millions

    One of the stations Mr. Gallagher purchased regular on air time on was KAAM in Dallas, TX. They reporteldy paid out a $250,000 settlement to the victims.

    Radio stations can't vet out every client they accept money from for on air advertising of brokered time, so why is KAAM forced to do this?
     
  2. justblue

    justblue Well-Known Member

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    Are you apart of this legal matter or are you just curious?
     
  3. Zigner

    Zigner Well-Known Member

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    It went beyond accepting money for on-air advertising. In this case, they were allowing him to host a radio program that he used to bilk people.

    In any case, the settlement was a mediated agreement. That means that that KAAM was not "forced" to do it, rather, they chose to do it.
     
    army judge and justblue like this.
  4. zddoodah

    zddoodah Well-Known Member

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    Heck if I know, but you're able to google as easily as anyone here.
     
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  5. Bruce McFarland

    Bruce McFarland Law Topic Starter New Member

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    Just curious.
     
  6. Bruce McFarland

    Bruce McFarland Law Topic Starter New Member

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    So if you choose to settles, they must have had something on them? Like perhaps it was known that this guy was not on the level and the station decided to "look the other way?"
     
  7. Zigner

    Zigner Well-Known Member

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    I'm sorry, but I (and nobody else here, as far as I know) was privy to the negotiations, or the thoughts of the negotiators. What you are asking is pure speculation. I will say that settlements are often entered in to because the cost of litigation, even if successful, would exceed the settlement being offered.
     
  8. Tax Counsel

    Tax Counsel Well-Known Member

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    KAAM's owner DJRD Broadcasting, LLC wasn't forced to do anything. It agreed to a settlement of the matter. As for the potential liability for DJRD had the matter gone to trial that depends on the details of the broadcasts and its relationship to Gallagher. A radio station cannot simply turn a blind eye to the stuff it broadcasts, including ads and paid content. If the company either did not make it clear that the program was paid programming by the Gallagher and not a program of the station itself or if the company had some reason to know or should have known the guy was a con artist and yet continued to carry the programs then there would be a basis for holding the broadcaster liable.

    Note that DJRD might not have had to pay anything out of it own pocket as it is possible it had insurance to cover this kind of thing.
     
  9. flyingron

    flyingron Well-Known Member

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    We had a similar situation where local TV stations aired what they called "sponsored content" for such a fraud that was indistinguishable from regular content. The TV stations had morning "talk shows" (sort of a local GMA or Today show) and inserted such paid material within it.

    Don't know if anybody tried using the TV/Radio stations, but there was at least a couple lawsuits and countless FINRA arbitrations that resulted in substantial awards, but there's no money left in either the broker or brokerage to pay out.
     

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