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Banking North Texas financial radio host charged with $20M Ponzi scheme by SEC

North Texas financial radio host charged with $20M Ponzi scheme by SEC

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A North Texas-based radio host and financial consultant, William Neil “Doc” Gallagher, who bills himself as the “Money Doctor” on three Dallas-area radio stations, was arrested on March 8, accused of running a $19.6 million Ponzi scheme.

The Securities and Exchange Commission said the Ponzi scheme targeted elderly investors’ retirement funds. The SEC also charged Gallagher Financial Group, Inc. and W. Neil Gallagher, Ph.D. Agenc, Inc., companies that Gallagher used to carry out the scheme.

The SEC’s complaint alleged that Gallagher made frequent religious references on his radio shows to establish his standing among a target audience of retired Christian investors. From December 2014 through January 2019, he raised at least $19.6 million from approximately 60 senior citizens, according to the SEC. Gallagher at one time had a program on KAAM, but it was not clear if he still is on that station.

Falsely claiming to be a licensed investment adviser, the SEC said, he offered an investment that he called a Diversified Growth and Income Strategy Account, in which he promised to acquire income-generating assets for his clients in five specified categories. He promised investors that they would receive guaranteed, risk-free returns in their accounts ranging from 5 percent to 8 percent per year. In reality, except for one $75,000 annuity purchase, Gallagher purchased no assets in any of the five categories and no other assets to back the promised returns. Instead, he exhausted virtually all investor funds on spending unrelated to the accounts, including misappropriating significant portions for personal and company expenses and to make Ponzi payments to investors, according to the SEC.

On March 8, 2019, United States District Judge Jane J. Boyle entered orders at the SEC’s request, freezing their assets and placing them into receivership and temporarily enjoining the defendants from further violations. The SEC is seeking preliminary, permanent, and conduct-based injunctions as well as disgorgement, prejudgment interest, and civil penalties against the defendants.

In a related case, the Dallas County District Attorney’s Office obtained an indictment against Gallagher on March 4, 2019, for securities-fraud and other criminal charges stemming from the scheme. On March 8, 2019, Gallagher was arrested on those charges, which remain pending.

The SEC’s investigation was conducted by Melanie K. Good, John J. Devine, and Melvin E. Warren and supervised by Timothy S. McCole. The litigation is being conducted by Janie L. Frank and supervised by B. David Fraser. The SEC was assisted bu the Dallas County District Attorney’s Office, the Texas Department of Insurance, the Texas State Securities Board, the Hurst Police Department, and the North Richland Hills Police Department.

Gallagher lives in North Richland Hills.

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