Men Behind American Radio Empire Scam Found Guilty of Fraud
|RADIO ONLINE | Wednesday, July 3, 2019|
Two men defrauded investors out of millions of dollars a jury ruled Friday after a week-long trial in Third Judicial District Court, reports the Las Cruces Sun News. Both Dain Schult and Joel Hixon were charged with trying to convince investors they were assembling a iHeartRadio-type multimedia conglomerate. They were convicted of fraud over $20,000, securities fraud, conspiracy to commit fraud, the sale of unregistered security and the sale of security by an unlicensed agent. Both will be sentenced at a later date.
The newspaper said the New Mexico Regulation and Licensing Department claimed Schult, who lives in Austin, TX, used his companies -- American Radio Empire Inc. and American Wireless and Entertainment Inc. -- to recruit experienced radio personalities such as Hixon of Las Cruces to solicit investments from unsuspecting friends, with offers of future employment.
Schult and Hixon led investors to believe that the money they raised was being used to pay for services aimed at funding an initial public offering of Schult's company, the state New Mexico said in a release. Additionally, Schult and Hixon told investors that the money from the sale of promissory notes would be used to purchase smaller radio stations around the U.S. while placing them on the Internet.
However, the Sun News reports that Schult was in fact misappropriating investors' money for personal use and to pay commissions to Hixon for his collaboration in what the state called a "pyramid scheme."
"All told from 1998 to present, we estimate Schult earned $1.4 million strictly from convincing people to give it to him," said New Mexico director of securities Matt Bouillon-Mascarenas.