A former radio host who played a role in the second-largest Ponzi scheme in Minnesota history was sentenced to serve the next twenty years in federal prison. Pat Kiley, 75, who initially took the offensive and sued various newspapers for linking him to Trevor Cook's $194 million Ponzi scheme, received the sentence after a federal jury convicted him last year of numerous charges, including 12 counts of wire and mail fraud, one count of conspiracy to commit mail and wire fraud, and two counts of money laundering. Kiley was scheduled to be sentenced earlier this year along with two co-defendants, but was granted a reprieve during the sentencing hearing when he alleged various missteps by his then-attorney. Along with the sentence, U.S. District Judge Michael Davis also ordered Kiley to pay over $155 million in restitution to victims.
Kiley hosted a homemade radio show, broadcast nationwide on over 200 stations, called "Follow the Money." Kiley represented himself as a senior economist and financial advisor, and called his listeners 'truth seekers' as many sought financial security in the midst of a tumultuous financial climate. Kiley's long-time friend, Trevor Cook, operated Crown Forex SA and JDFX Technologies along with Christpher Pettingill, Jason 'Bo' Beckmann, and Gerald Durand. Cook pitched risk-free returns to potential investors, attempting to allay any concerns by explaining that Crown Forex was operated by Jordanians that complied with Islamic sharia law and thus could not charge him interest on the loans he took out. Additionally, investors were told that transactions closed daily and thus were not subject to risk from being held overnight. Cook used the men to pitch the scheme to potential investors, as Beckman operated a money-management firm, Oxford Private Client Group, that catered to affluent clients, while both Kiley and Durand hosted radio talk shows. Indeed, authorities alleged that Kiley alone brought in nearly two-thirds of the total investors. In total, Cook and his associates raised nearly $200 million from over 700 investors.
However, the men did not operate a legitimate currency trading firm, but instead masterminded one of the largest Ponzi schemes in history. Approximately half of the funds raised from investors were used to trade currency, of which $68 million was lost. Cook and Kiley diverted tens of millions of dollars for their own use, including the transfer of nearly $13 million to Panamanian bank accounts for construction of a casino, $12 million for personal expenses, nearly $5 million in gambling losses, and nearly $3 million withdrawn in cash and cashier's checks.
The arrest and prosecution of Cook and his associates was filled with several strange incidents, including Kiley's defamation lawsuit against several Minnesota newspapers, allegations that Durand and Pettingill had discussed murdering Beckmann to collect on a life insurance policy, and Beckmann unsuccessfully offering to tender a $19 million check in exchange for a 1-year sentence.