VOL 2 No. 49
Phone: 281-980-6745
www.fbindependent.com .fbindependent.com ww
FORT BEND FAIR. BALANCED. INFORMATIVE. WEDNESDAY, DECEMBER 9, 2009
P. O.BOX 623, SUGAR LAND, TX 77487-0623
Christmas at Town Square SEC sues Missouri City businessman for alleged $10 million fraud
Sugar Land Mayor James Thompson and Santa Claus lighted a 40-foot Christmas tree to kick off the holiday season at the Sugar Land Town Square on Dec. 3. The event attracted a huge crowd despite the inclement weather. The highlight of the evening was the grand entrance of Santa Claus. Main stage performances included Sugar Land Super Star winner Nathaniel De Jesus, local school choirs and the Sugar Land Express Singers. There were stilt walkers and festive characters like snowmen to enhance the evening’s entertainment. Photographer LARRY PULLEN captured the holiday spirit during the tree lighting, above, and the arrival of Santa Claus, below.
Sugar Land’s first developments In the late 1950s, the Imperial Sugar Company decided the upkeep of its company-owned houses was just getting to be too much of a drain on the company’s profits. The rents were greatly below what it was costing the company for upkeep and infrastructure development. The company’s brick houses on The Hill, northeast of the refinery, were put on the market, and the company employees were given the option to buy them. And most of them did buy their homes, priced from about $4,000 to $6,000. Most of the houses had shared driveways. Houses along Main and up to 6th Street were largely wood or siding and were a bit cheaper; Sugar Land State Bank agreed to $500 down and mortgages with a 5 percent rate to be paid off in 10 years. Buyers could opt for payroll deduction. A number of people bought their homes outright. The land that would become Venetian Estates was a low, swampy land. Sugar Land Industries and Belknap Realty dug canals and used the dredged dirt to build up
the land height. It was Mrs. Henrietta Kempner’s (wife of Imperial owner Isaac Kempner) idea to call it Venetian Estates and give Italian names to many of the streets. The lots sold slowly at first—at $5,000 these were not cheap lots. Some “spec” homes were built. But when the U.S. 59 service roads opened, there was a way to get into Houston without going on South Main. It was also the time when the area around Sharpstown was being developed—but Sugar Land was about the only place that had water-front lots! The lots in Venetian Estates began selling quickly then. Mayfield Park on the north side of the refinery was nearly exclusively Black and Hispanic. The Black children attended M.R. Wood school, while the Hispanic children attended Sugar Land Elementary since they were considered “white.” The homes in Mayfield were considered out of code in the early 1950s by the City because they had an outdoor privy and just running cold water in a single faucet back
of the house. Herb Kempner –son of Isaac—was over Imperial and was disturbed at the plight of the Mayfield residents. More than 200 homes were bulldozed and new brick ones built over the course of a decade in their places; residents lived in temporary housing. Herb Kempner’s vision for Sugar Land was much like his father’s, a city with no injustice and with opportunity for everyone. The City worked with the Federal Housing Administration on this urban renewal project, and the first FHA home was sold to Mrs. Aline McLemore in 1961. It is believed that there was never a foreclosure in the Mayfield subdivision. Sadly, Herb Kempner died in 1953 and did not see the completion of his Mayfield project. Though Sugar Land was segregated in the 50’s and early 60’s, there was one thing that just about everyone had: a job. (This article is published in commemoration of the 50th anniversary of Sugar Land being celebrated with a party on New Year’s eve.)
By SESHADRI KUMAR The Securities and Exchange Commission has filed a suit in the United States District Court for the Southern District of Texas against Albert Fase Kaleta of Missouri City, and his company, Kaleta Capital Management, Inc. Two other entities, Business Radio Network, L.P. (“BizRadio”) and Daniel Frishberg Financial Services, Inc. ( DFFS Capital Management, Inc.) have been named as Relief Defendants solely for the purposes of equitable relief. Former Sugar Land Mayor David Wallace has been associated with Frishberg and BizRadio as a business partner. Kaleta and Dan Frishberg, who has the show on BizRadio called “The Money Man,” were among the founders of BizRadio Network. Kaleta also was part owner and chief compliance officer for DFFS. The SEC alleges that Kaleta and KCM raised approximately $10 million from about 50 investors in a fraudulent offering of promissory-note securities. The commission further alleges that Kaleta misrepresented that KCM would use the offering proceeds to provide short-term loans to credit-worthy small businesses. Instead, at Kaleta’s direction, KCM loaned approximately $6.7 million of the proceeds to DFFS and BizRadio, “two financially precarious KCM affiliates who had no reasonable prospect of repaying the
loans.” Kaleta knew the financial condition of both companies because he was president, chief compliance officer, and a 44 percent owner of DFFS and, with others, controlled BizRadio. The complaint alleges that Kaleta also took approximately $1.5 million of the offering proceeds to pay his personal expenses. Finally, the commission alleges that contrary to Kaleta’s representations, he used investor funds to make interest payments to some of the promissory note holders. The complaint requests permanent injunctions, disgorgement of ill-gotten gains plus prejudgment interest, and civil penalties against the Defendants. In addition, the commission has filed a motion asking the court to appoint a receiver to collect, marshal, manage and distribute these assets for the benefit of investors. Without admitting or denying the Commission’s allegations, Kaleta and KCM have consented to permanent injunctions against future violations of the anti-fraud provisions. Kaleta and KCM have also consented to an order appointing a receiver. BizRadio received millions raised from investors under false pretenses, according to the lawsuit. The SEC claims that between December 2007 and August of this year, Kaleta and Kaleta Capital Man-
See FRAUD, Page 3
CASA Christmas Home Tour Set for Dec. 11 and 12, the CASA Christmas Home Tour will feature six distinctive homes in First Colony, Pecan Manor and Richmond. Presale tickets are available for $15 at greater Houston area HEB stores, Fort Bend Amegy Bank locations, OakBend Medical Centers, and the Riverstone Information Center. Tickets can also be purchased during the event for $20 at The Sweetwater Guardhouse, Riverstone Information Center, OakBend Medical Centers and each of the homes. Shown with posters and tickets L to R are: Cindy Reaves, Marketing Director for OakBend Medical Centers; Home Tour Ticket Chair Barbara Benes; and Child Advocates of Fort Bend Development Director Kelli Metzenthin. The Tour, which benefits Child Advocates of Fort Bend, runs Dec. 11 and 12 from 10 a.m. to 4 p.m. with a special candlelight tour on Friday night from 6 p.m. to 9 p.m. Tour guests will be treated to a rare glimpse of the featured homes and their creative holiday decorations.
In addition, guests will enjoy festive entertainment by local artists and tasty homemade cookies and hot apple cider. A special tour lunch is available at Sweetwater Country Club for $15. One ticket provides admission to all six homes and can be used at any time during the tour. The map to the homes is
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agement sold $10 million in promissory notes, telling investors the money would be loaned to small businesses at 12 percent to 14 percent interest. Instead, the SEC said, it went to the money-losing radio network and an affiliated investment advisory firm, Daniel Frishberg Financial Services. Kaleta’s firm loaned BizRadio $3.6 million of the money during the first eight months of this year. During that same time, the radio network lost $1.6 million and “its only significant assets were illiquid radiostation licenses,” the SEC’s lawsuit said. Another $1.2 million went to DFFS, which “did not have sufficient revenue or assets to service such a loan,” according to the lawsuit. Dan Frishberg is the CEO of Frishberg, Jordan, Stewart, & Kaleta Advisors, Inc. and CEO & Founder of BizRadio Network. In 1992, Frishberg started Daniel Frishberg Financial Services from the ground up, and in 1997, it evolved into Frishberg Jordan Stewart & Kaleta Advisors. FJSK Advisors manages over 300 million dollars in assets and advises on more than 1.2 billion dollars, according to the company’s website. FJSK has one of the few equity portfolios in the country that has shown significant gains over the past few years
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on the back of the ticket. For more information about the event call 281-341-9955, ext. 5108. Since the Tour began, Child Advocates of Fort Bend has trained more than 600 volunteers and served more than 8,000 children. At least 400 children are touched each month by one of the agency’s programs.