(CN) – Nationally syndicated “radio personality” Pat Kiley and a Minneapolis money manager stole $43 million of the $190 million they raised in a foreign currency Ponzi scam, the SEC said Tuesday.
Kiley hosts the radio show “Follow the Money.”
He is accused along with money manager Trevor G. Cook, and a slew of “shell companies owned or controlled by either Cook or Kiley,” lost another $48 million in forex trading, and Cook gambled away nearly $5 million of it, the SEC says.
In its complaint in Minneapolis Federal Court, the SEC says the two men misappropriated $42.8 million from more than 1,000 victims, including $18 million to buy “ownership interests in two trading firms,” $12.8 million they sent to Panama “to purportedly finance the construction of a casino,” $2.8 million Cook used to buy a mansion in Minneapolis, and “$4.8 million that Cook lost through gambling.”
They paid out another $51 million in Ponzi payments, the SEC said.
Cook and Kiley sold unregistered investments through their shell companies, promising to keep each investor’s account separate, and promising 10 percent to 12 percent annual returns, according to the 50-page federal complaint.
“Kiley pitched the investments on his financially themed ‘Follow the Money’ show that he hosted on radio stations nationwide,” the SEC said in a statement announcing the lawsuit.
The agency says the men actually pooled the money, lost millions of dollars in the forex trading that they did do, and “misused approximately half of investor funds collected to make Ponzi-like payments to earlier investors and pay for Cook’s gambling losses and purchase of the historic Van Dusen Mansion in Minneapolis.”
The SEC said the men used the money “on a $40 million-plus spending spree” and lost another $48 million in foreign currency trading, which they misrepresented as safe and profitable.
The SEC also sued the men’s unregistered companies, including UBS Diversified Growth LLC, Universal Brokerage FX Management LLC, Oxford Global Advisors LLC, Oxford Global Partners LLC, and others.
The court froze the accounts of these relief defendants: Basel Group LLC, Crown Forex LLC, Market Shot LLC, PFG Coin and Bullion, Oxford FX Growth L.P., Oxford Global FX LLC, Oxford Global Managed Futures Fund L.P, UBS Diversified FX Advisors LLC, UBS Diversified FX Growth L.P., and UBS Diversified FX Management LLC.
The court also froze the accounts of Cook’s in-laws, and appointed a receiver.