Employer

660AM’s Mark Davis and his employer avoid trial over Doc Gallagher’s Ponzi scheme

Mark Davis is best known as a prominent conservative radio show host, a position he has held in North Texas for nearly 30 years. More recently, Davis’ relationship with convicted con man William Neil “Doc” Gallagher came to light in a civil lawsuit.

Davis was an endorser, spokesperson and attorney for Gallagher, all detailed in the recently settled lawsuit in which an attorney working on behalf of victims sued Davis and his employer, Salem Media Group, seeking reimbursement.

According to court documents, Davis argued on-air and off that investing in Gallagher’s finance company was a smart move. Davis even recorded the voicemail greeting during phone calls to Gallagher’s now closed business.

The praise for Gallagher’s financial intelligence was unwarranted.

Gallagher, 81, is in prison serving three life sentences for running a $30 million Ponzi scheme. He was convicted of fraud in a Tarrant County court case. He pleaded guilty to a similar charge in Dallas County, was sentenced to an additional 25 years and ordered to pay back $10 million to victims.

Salem, who hosts Davis’ morning show on KSKY (660 AM), agreed to pay the court-appointed receiver in the civil case $5.3 million to recover the money for the scheme.

Davis was a defendant in the lawsuit with Salem, where Davis has worked for a decade. Davis and Salem chief financial officer Evan D. Masyr declined to comment for this story.

Davis told me, “Anything about it should come from Craig Brinker.”

Brinker, Salem’s attorney, argued in court that Salem had no knowledge of Gallagher’s activities. The company’s only involvement was to sell advertising, he said in a brief conversation Friday.

Salem also owns Christian station KLTY (94.9 FM), which was named in the lawsuit for its role in promoting Gallagher.

Davis wrote an opinion column for The Dallas Morning News for more than a decade, despite not being on staff.

A prominent political talk show host, Mark Davis is named in a now settled lawsuit as someone who helped ‘Doc’ Gallagher recruit investors who ended up losing their investments in the $30m Ponzi scheme of Gallagher dollars.(Dave Lieber)

“Money Doctor”

The Doc Gallagher case is one The Watchdog has been covering for three years. The receiver, Cort Thomas, is trying to recover the money of several hundred victims who have lost a total of 30 million dollars. Davis and the radio company became one of the targets for some of that money in a civil lawsuit set to go to trial Oct. 17. It was canceled when the parties reached a last-minute settlement.

As is typical in these settlements, no one accepts blame for their actions as the checks are cut. But The Watchdog has studied recently filed court documents in the case. They shed light on Davis’ role.

Gallagher bought ad time and hosted his own show on local Salem-owned stations. He called himself the “money doctor”, but his doctorate was in philosophy.

Gallagher was endorsed by Davis. Davis was paid $7,000 in “appearance costs” by Gallagher, according to court documents. There is no other mention of Davis receiving money directly from Gallagher in the court documents.

Even after Salem was tipped off that Gallagher was under criminal investigation, the relationship continued. Gallagher was the stations’ largest advertising account. Salem Stations did not sever ties with Gallagher until his arrest in 2019.

In court papers, Salem argued that a direct link between someone listening to an advertisement and then losing money to Gallagher could not be proven.

Not all investors heard the ads and no misrepresentations were included in the ads, Salem argued.

Salem denies any wrongdoing and said in court papers that a settlement “would avoid uncertainty and expense.”

Publicity photo of Doc Gallagher promotional kit.
Publicity photo of Doc Gallagher promotional kit.(Collected by The Watchdog at a Gallagher seminar)

A slippery’

Court documents prepared by attorneys for Receiver Thomas show the stations promoted Gallagher as a financial adviser who offered risk-free investments that would never lose money.

Four years before Gallagher’s arrest, a regional vice president in charge of local Salem stations wrote in an email that “Gallagher is slippery, and I have reason not to trust him.”

“The lifeblood of a Ponzi scheme is to solicit funds from new investors to be used to pay other investors,” writes Tyler Bexley, an attorney for the receiver. Without the “substantial help” from Salem, he adds, “Gallagher would never have been able to solicit hundreds of investors and grow his Ponzi scheme to $30 million.”

Had the stations heeded the early warnings, the receiver says in court papers, Gallagher might have stolen $5 million less than the $30 million he was convicted of illegally taking.

Even after Salem received two subpoenas from the Texas Department of Insurance as part of a criminal investigation, Salem continued to allow Gallagher to run his paid ads and offer him airtime to host his show” Money Doctor”.

Salem is a publicly traded company that markets itself as “America’s premier broadcaster, Internet content provider, and publisher of magazines and books targeting audiences interested in Christian and family content and conservative values.” It owns about 100 US radio stations, as well as the Red State and Townhall.com.

The receiver’s attorney argued that local Salem stations had never researched Gallagher’s background — he had longstanding difficulties with federal and state regulators, according to court records. He lost his license to sell securities more than 20 years ago, according to state records.

At the very least, a 2009 profile on Gallagher in CEO The magazine story seen by Davis and others at the stations highlighted potential warning signs. Other warning signs include messages left on radio stations by listeners who questioned Gallagher’s honesty.

In a pretrial deposition, Salem chief executive Jeff Mitchell said Davis’ lack of curiosity about Gallagher’s past issues violated company policy by not reporting the story in the channel. commandment. The goal, Mitchell said, was to maintain a close relationship with listeners, but that jeopardized the station’s reputation.

In a deposition, Davis testified that he did not believe CEO the story was “serious enough” to take action.

Still, Davis recorded Gallagher Financial Group’s welcome message on Gallagher’s office telephone system. He said: ‘You made a great decision to call my friends at Gallagher Financial Group. This gave Gallagher more credibility, according to court documents.

Salem staffers “discussed how they could help Gallagher hide his evidence of past regulatory issues, strategizing about how much budget it would take to bring down the CEO story in Internet search results.

Mitchell testified that Davis told Gallagher about his background and that Gallagher put his qualms to rest.

When asked if Salem was taking responsibility, Mitchell replied in the deposition, “I assume that Mark being an employee of Salem, there was definitely a missed step. Mark should have taken this to the GM.

Asked by a lawyer if “Mark Davis’ misconduct or faulty conduct is Salem’s misconduct,” Mitchell replied, “Yes.”

Other stations

Previously, the receiver received $250,000 to go back to the victims in a settlement with a smaller radio station that also hosted the “Money Doctor” show. KAAM was a Christian station that also aired big band music.

Longtime KLTY host Frank Reed, who also backed Gallagher, was also named in Salem’s lawsuit. Reed announced he would retire at the end of this year after 31 years with the station.

The lawsuit between one of the largest radio companies in the country and a receiver fighting to recover the victims is now over.

It’s a lesson that you shouldn’t always trust the words of others. Check it out.

More stories from Doc Gallagher from The Watchdog:

How did he do it?

13 Things You Need To Know About Doc Gallagher, The Bernie Madoff Of North Texas

One of DFW’s best-known financial advisers is in Dallas County Jail on bail set at $1 million

How does it feel to turn on the television and find out that you’ve lost your life to a suspected scammer?

Sitting in jail, ‘Doc’ Gallagher, accused of stealing $30m, writes letter deflecting blame

How Doc Gallagher swindled area investors out of $30m, most of which will never be seen again

Now that prosecutors have put Doc Gallagher in prison for life, the focus is on his mistress

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