Patrick Kiley, a 73-year-old host of Christian Radio show “Follow the Money,” has been indicted in an ongoing case involving a multi-million dollar Ponzi scam in Minnesota.
Pat Kiley, as he is widely known, and two others were charged with defrauding investors by soliciting them to invest money in a foreign currency trading program offered through entities bearing the acronym “UBS” between 2005 and 2009, the U.S. Attorney’s Office for the District of Minnesota said in a statement Wednesday.
The indictment came after Kiley and the others facing charges ranging from wire fraud to money laundering appeared in the federal court in St. Paul. It was part of an ongoing case where a financial advisor, Trevor Cook, and his associate Christopher Pettengill started a Ponzi scheme called Universal Brokerage Services involving 700 investors and $194 million.
Through his radio show, produced out of a home owned by Cook and carried on more than 200 stations around the world, including the Worldwide Christian Radio network, Kiley invited listeners to call him and advised them to invest in the scheme. Kiley also warned his listeners about a coming financial Armageddon that would impoverish anyone who didn’t entrust him and his business partners with their money, according to Star Tribune.
However, Kiley claimed in the court he was reading from a script prepared by Cook when he told his audience he was a senior financial advisor. Kiley said he believed in the scheme.
Kiley told U.S. Magistrate Judge Jeffrey Keyes he had “probably $9 to $10” in the bank apart from $11 in cash and an as-yet un-cashed Social Security check, “which I live off of,” the daily said. When Assistant U.S. Attorney Tracy Perzel’s called for the restrictions saying she considered the men a significant flight risk, Kiley said he was not “a flight risk” and “I have no transportation. Will I be able to get a ride home?”
Kiley and another accused were released on unsecured bonds of $100,000 and placed on special restrictions barring them from making financial transactions on behalf of themselves or others without the government’s approval, and barring them from contacting investors.
In August 2010, Cook was sentenced to 300 months in federal prison for orchestrating the scam, Pettengill is awaiting sentencing. If convicted, Kiley and the others could face a potential maximum penalty of 20 years in prison on each wire fraud and mail fraud count, 10 years on each money laundering count, and five years on the conspiracy count.
The case is the result of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation Division.
The probe suggested that Cook operated the currency program through various foreign currency trading firms, including and not limited to one located in Chicago and another in Switzerland.
Cook and Pettengill “purportedly made false representations regarding the performance, safety, and liquidity of the currency program. They allegedly told victim investors the currency program would earn a double-digit rate of return, typically between 10.5 and 12 percent annually, with little to no risk to investors’ investment assets. The men also allegedly claimed that investor assets could be withdrawn at any time and would be held in segregated accounts,” said the Attorney’s Office statement.
In 2007, the international banking giant UBS, AG, filed a trademark infringement lawsuit against Cook, Kiley and others, but they began operating their scheme under other names, including and not limited to those identified by the terms “Oxford” and “Universal Brokerage FX,” the statement added.
Many of the Christian families that invested in the scheme lost their savings.