Conservative Radio Host Allegedly Cited Islamic Law To Dupe Christian Investors; Pat Kiley Issued Dire Warnings About ‘Greed’ Of Former President Clinton And ‘Massive Chaos’ To Come Under Obama

A radio host pitched his Ponzi scheme to listeners and told some clients that his strategy employed an unnamed Islamic bank that complied with Shariah law in an apparent bid to make investors believe the firm borrowed money to trade currency on international exchanges without having to pay interest, according to the SEC.

Shariah law prohibits the payment or acceptance of interest.

Despite Patrick “Pat” Kiley’s assertion that his financial firm took advantage of an Islamic bank to reduce its borrowing costs to zero, Kiley, 71, made no secret that his firm paid spectacular sums of interest to investors, according to the SEC complaint made public yesterday.

Kiley’s “Follow The Money” radio program was carried on 200 stations and also was available on Christian shortwave radio before going off the air in July, when investors began to raise public concerns about Kiley. The gravelly voiced host and co-defendant Trevor G. Cook now have become the central figures in an alleged $190 million Ponzi fraud in Minnesota.

Some homemade videos into which the audio of Kiley’s radio broadcasts was dubbed appear on YouTube and other video sites. Kiley’s listener’s appear to have made the videos, rather than Kiley himself.

One video — with audio from Kiley’s show dubbed in — featured Kiley advising his audience that he was about to share shocking, “confidential” information about an “unprecedented wave of massive, massive social chaos” about to occur in the United States.

Although the video appears to have been posted in May 2009, the audio appears to have been dubbed from an earlier Kiley program that coincided with Barack Obama’s ascension to the Presidency.

Things under Obama could get so out of control, Kiley suggested, that the U.S. military was on standby to deal with civilian insurrection through a law-enforcement arm known as the Consequence Management Response Force (CCMRF).

CCMRF is a real branch of the Army, but it is not designed to engage in war against citizens. Rather, it is designed to respond to “chemical, biological, radiological, nuclear and high-yield explosive” incidents, according to the Army.

Col. Lou Vogler, quoted on an Army website in September 2008, said CCMRF also was designed to complement local first-responders to disasters and emergencies. The Army cited the 9/11 terrorist attacks as the type of situation to which CCMRF would respond.

News of the spectacular federal allegations against Kiley and Cook broke yesterday, even as the state was reeling from the alleged $3.65 billion Tom Petters’ Ponzi scheme, the alleged $100 million AdSurfDaily Ponzi scheme and the alleged $53 million Ponzi scheme of Gerard Frank Cellette Jr.

“Kiley represented to investors that the trading strategy involved investing in a long position in one currency and an offsetting short position in a second currency,” the SEC said. “Kiley also represented to certain investors that the strategy utilized a bank that complied with Shariah law, which forbids the payment of interest, and that because no interest was paid to establish the short position, a greater profit could be earned.

“Kiley’s representations were false,” the SEC said.

A scan of the court document showed that investigators had used the word “false” or “falsely” at least 40 times to describe assertions Kiley, Cook and the companies with which they were associated had made to investors to get them to part with money.

Some of the companies used the initials UBS, but the SEC said the firms had no connection to UBS AG, the famous Swiss firm.

Screen shot: An audio featuring the voice of radio-talk show host Pat Kiley was dubbed into this YouTube video, which featured a photograph of President Obama meeting with fiscal-policy advisers while Obama was President-Elect. Kiley intoned that the United States seemed ready to return to the "greed and irresponsibility" of fiscal policies advanced by former President Clinton.

Kiley sometimes used his radio show as a platform to rail against the administration of former President Bill Clinton, saying during one broadcast that Clinton’s fiscal policy was based on “greed and irresponsibility.”

When Barack Obama became President-Elect after winning the White House in November 2008, Kiley warned listeners that Obama’s election signaled the return of Clinton-like financial policy.

The video was titled, “The Engineers of Financial Disaster.”

Only months later, Kiley finds himself at the center of a financial storm that may cause some investors and radio listeners to lose tens of millions of dollars.