False prophet, false profits? - Pat Kiley told listeners to a Christian radio network he could protect their wealth. Now investors fear they're out millions.
Pat Kiley called his worldwide radio audience "Truth Seekers," and in weekly hour-long broadcasts recorded from his Burnsville home, he warned about a coming financial Armageddon that would impoverish anyone who didn't entrust him and his business partners with their money.
Hundreds of listeners turned over much of their life savings to Kiley and his associates. His pitch, carried on more than 200 stations nationwide, including KSTP Radio (1500 AM), and on the Worldwide Christian Radio network, drew in retirees, postal workers, traders at the Chicago Mercantile Exchange and even Jacquelyn Mitchard, a Wisconsin novelist known for her bestseller, "The Deep End of the Ocean."
Now those same people are seeking the truth from Kiley: Who is he, where is he, and what has he done with their money?
"I don't know where my money is coming from for my next doctor's appointment," said Frank Bright, a 74-year-old UPS retiree in Atlanta who invested $350,000 through Kiley.
Kiley's image as a trusted shepherd was shattered July 7 when nine Ohio investors filed a federal lawsuit in Minneapolis saying they couldn't get their nearly $5 million out of the investment programs sold to them by some of Kiley's associates.
Federal regulators and the FBI are now investigating. Investors fear that Kiley, 71, may have been the barker for a Ponzi scheme in which the new investors' money goes to pay earlier ones. Estimates of the number of accounts range from about 1,000 to more than 9,000. Nearly 150 people have contacted the Star Tribune complaining that they can't get at more than $30 million they had invested through Kiley and his associates.
Many investors thought that their money was being held by a Swiss firm, now in bankruptcy. But they've recently learned that their accounts didn't exist at that firm. They say their money went into U.S. bank accounts controlled by Kiley or his associates, and then seemingly vanished.
Kiley, through Minneapolis criminal defense attorney Peter Wold, declined to comment.
"Obviously, with these several investigations going on, Pat's not going to defend himself in the press," Wold said. "I'll tell you Pat was very proud of the relationship he had with his clients, and his core objective is to see that they are reunited with their money."
Keeping the faith
Investors say Kiley's personal and professional histories inspired their confidence. He related his loneliness and heartbreak after the death of his wife, killed by a drunken driver about 15 years ago. He told others, including Joyce Davis and Jim Renneker of Warroad, Minn., that his mother had battered him so badly as a child that he wore long sleeve shirts to cover the bruises and that he was raised on a farm by his grandmother.
"I think his values are right and good," said Esther Rimbey of Spokane, Wash., who, with her husband, Ray, has entrusted Kiley with $276,000. "He loves his family, his country," she said. "We have not lost faith with him."
Kiley's show ended with a prayer, and he frequently prayed with listeners who called to inquire about investing through him.
Alex Howell checked around before giving his money to Kiley. "I rang pastors all over the country," said Howell, a resident of Calgary, Alberta. He also checked with the Better Business Bureau and, last October, flew to the Twin Cities to see Kiley's operation firsthand.
The Burnsville home buzzed with visiting investors and staff, who referred to Kiley as "the doctor -- like if you've got money problems, he fixes it," Howell said. From there, Kiley took him to the top floor of a nearby Eagan bank with a conference center and about 30 phones and computer terminals, where sales agents fielded calls. He said Kiley even showed him the computerized "trading platform" at the Van Dusen mansion in Minneapolis.
Howell said he invested $460,000 through Kiley -- his mother's life savings and the family's inheritance from his late father.
"Is it all gone?" he asked a reporter. "That's everything. That's absolutely everything."
Failed relationships
Public records and interviews with Kiley's brothers and two of his three former wives depict a life story at odds with the one Kiley recounted.
He grew up in Grafton, N.D., said Michael O'Brien, one of Kiley's brothers who changed his name when starting a radio career. He was the eldest of six siblings who were raised in town, not on a farm. Their dad sold Ford cars. Tales of being abused by his mom are "absolute nonsense," said O'Brien, who is retired and lives in Washington state.
Tim Kiley, another brother who retired as a disc jockey in Pueblo, Colo., also denied that Pat was raised by a grandmother. He said they used to get along but haven't spoken since the mid-1990s "due to an incident." He declined to elaborate, he said, "only because he's my brother."
O'Brien said that his brother has been estranged from the entire family for years, and that he even skipped their parents' funerals.
"The way he treated both my parents, it's unconscionable," O'Brien said.
On his radio program and website, Kiley described himself variously as a technical financial analyst, a registered financial adviser, the chief economist for a leading financial institution and a senior partner in an international investment banking firm.
Public records found no indication that Kiley has been a registered investment adviser or stockbroker. Though he claimed in a job application to have graduated from the University of North Dakota in Grand Forks with an "associated business" degree, school records show he attended for just two fall semesters in 1958 and 1961.
His marriage to Carolyn Melby ended in divorce decades ago. Neither she nor his three children could be reached for comment.
Another former wife, Bonnie Kiley, said she hadn't thought about Pat for years when she learned about 18 months ago from a friend that his show was carried on KSTP. She said she was both shocked by Pat's "misrepresentations" and amused by his histrionics.
Bonnie Kiley said they met in 1968, when both worked at Northern States Power (NSP), where he sold household appliances. The 6-foot-1 Kiley was a sharp dresser, with a blue suit, embroidered shirts with French cuffs and striped ties, she said. They married in 1971 in Anoka and were divorced in 1984.
Bonnie Kiley said Pat changed jobs a lot during that time, with stints selling insurance, a computer-education program and small "Scamp" travel trailers over the phone.
"I'll tell you this -- Pat Kiley can do the dance on the phone," Bonnie Kiley said. "He knows how to manipulate the words and paint the picture for people."
In 1985, Kiley married Deborah Jo Martin, who said they met at a Twin Cities singles dance. She said he had told her he owned a big business, but it turned out to be a small operation in which he clipped obituary notices and laminated them to cards as keepsakes. After it flopped, Martin said, they moved to Palm Springs, Calif., where Kiley went to work selling for ICA Numismatics, one of several investment coin businesses that he would ultimately work for. Martin left after just two weeks, she said, because Kiley was mean to her sons from a previous marriage. They were divorced in 1989.
At the time, Kiley said he was grossing $1,500 a month from a company he started in May 1988 called Manufacturer's Direct Disposables. State business records list his girlfriend at the time, Mary Wilson, as the registered agent.
Wilson said she met Kiley at a singles gathering in Bloomington. They dated for about two years, but Wilson said she grew tired of his carousing. "He was a raging alcoholic," she said.
Martin and Bonnie Kiley also said he'd been a heavy drinker, a pattern reflected in court records. Most recently, Bloomington police seized and sold Kiley's Lexus automobile after his fourth drunken driving conviction in 2006.
Wilson said she understands the concerns of Kiley's investors. She said he stiffed her and his dry cleaner, Gerald Mashek of Hopkins, on loans for his disposable medical products business.
Mashek shrugged off the debt. "What's $10,000?" he said.
Not Wilson. "The $7,000 or $8,000 he took from me is like a million dollars," she said.
Worldwide reach
Pat Kiley began broadcasting on the Worldwide Christian Radio network in April 2004, according to sales manager Rick Shelton. He said the shortwave station covers the United States and reaches into Canada, Europe, the Middle East, southern Africa and Australia. On the air, Kiley said his program also was carried on 202 AM or FM stations around the country. The show was distributed by a publicist in Grand Rapids, Mich., and went on KSTP in October 2007.
Mitchard, a self-described "blue-collar girl" from Chicago, said she and her husband, Christopher Brent, a master carpenter, "run terrified from most people who do things in the name of the Lord."
But Kiley convinced them that the strategy of using interest-free money from Islamic banks to make bets on foreign currencies would produce consistent, double-digit profits without having to invest in companies that made tobacco, weapons or other products they found ethically objectionable.
Many of Kiley's investors said they learned of his radio program and websites through Bob Chapman, who publishes the International Forecaster, an investment newsletter rife with New World Order conspiracy theories. Chapman was such a regular on Kiley's radio program that he got the moniker "cohost for life."
The men started feuding last summer, and Chapman began warning his readers away from Kiley. "Anyone who has an account with Pat Kiley who has not talked to us regarding it, please e-mail or write us, include a phone number," he wrote in October.
Those who called, like Patty and Ron Sower of Westlake Village, Calif., say Chapman advised them to get their money out of Kiley's investments -- fast. Patty Sower said that Chapman told her that Kiley "was running a Ponzi scheme, and he's a liar; he's not who he says he is."
The Sowers, who invested $158,000 through Kiley, had considered him such a good friend that they saved a message he'd left on their answering machine several years ago. They told him about Chapman's allegations. "He kind of just listened," Patty Sower recalled.
Kiley asked her what she planned to do. "And I said, 'Well, we believe you. You've always been honest with us ... so we're not going to pull our money out.' And we didn't."
Chapman did not respond to requests for comment. In recent weeks, he has been following what he calls "the Kiley saga" in his newsletter, which is widely circulated among Kiley's investors. "Rumor reaches us of a Panamanian casino and high-rise condo investments of some of those involved in the disappearance of funds," he said in a recent entry.
Accounts frozen
In mid-July, many of Kiley's clients began getting form letters saying they could neither make deposits nor withdrawals because of the Ohio investors' lawsuit and pending investigations.
Mitchard said her family's "substantial" investment required decades of scrimping. She and Brent have seven children and are about to adopt two "AIDS orphans" from Africa. "It's heart breaking. I am going to write a story about the human toll of this," she said.
Ward Northrup, 67, of Bloomington, said he's had Kiley to his home for dinner, and Kiley even offered him a high-paying job once.
"Pat Kiley became a personal friend," said Northrup, who invested nearly $100,000 invested through Kiley.
A number of Kiley's clients said they've spoken with investigators from the FBI, the Securities Exchange Commission and the Commodities Futures Trading Commission. Dozens have hired attorneys. But many others said that they'd invested so much of their money through Kiley that they now lack the resources to hire an attorney. Their best hope may lie with the government that Kiley advised them to distrust.
In the meantime, singer-songwriter Shirley Dorr of Warren, Ore., called on her fellow investors Saturday "to go to war through prayer and fasting."
"Pray that the mouthpiece, who had the audacity to use My Holy name deceitfully in order to steal from My people -- Pat Kiley -- Pray that he will have a nervous breakdown," she wrote in a widely distributed e-mail. "Pray that he will be overcome with remorse."
Dan Browning • 612-673-4493
dbrowning@startribune.com
Hundreds of listeners turned over much of their life savings to Kiley and his associates. His pitch, carried on more than 200 stations nationwide, including KSTP Radio (1500 AM), and on the Worldwide Christian Radio network, drew in retirees, postal workers, traders at the Chicago Mercantile Exchange and even Jacquelyn Mitchard, a Wisconsin novelist known for her bestseller, "The Deep End of the Ocean."
Now those same people are seeking the truth from Kiley: Who is he, where is he, and what has he done with their money?
"I don't know where my money is coming from for my next doctor's appointment," said Frank Bright, a 74-year-old UPS retiree in Atlanta who invested $350,000 through Kiley.
Kiley's image as a trusted shepherd was shattered July 7 when nine Ohio investors filed a federal lawsuit in Minneapolis saying they couldn't get their nearly $5 million out of the investment programs sold to them by some of Kiley's associates.
Federal regulators and the FBI are now investigating. Investors fear that Kiley, 71, may have been the barker for a Ponzi scheme in which the new investors' money goes to pay earlier ones. Estimates of the number of accounts range from about 1,000 to more than 9,000. Nearly 150 people have contacted the Star Tribune complaining that they can't get at more than $30 million they had invested through Kiley and his associates.
Many investors thought that their money was being held by a Swiss firm, now in bankruptcy. But they've recently learned that their accounts didn't exist at that firm. They say their money went into U.S. bank accounts controlled by Kiley or his associates, and then seemingly vanished.
Kiley, through Minneapolis criminal defense attorney Peter Wold, declined to comment.
"Obviously, with these several investigations going on, Pat's not going to defend himself in the press," Wold said. "I'll tell you Pat was very proud of the relationship he had with his clients, and his core objective is to see that they are reunited with their money."
Keeping the faith
Investors say Kiley's personal and professional histories inspired their confidence. He related his loneliness and heartbreak after the death of his wife, killed by a drunken driver about 15 years ago. He told others, including Joyce Davis and Jim Renneker of Warroad, Minn., that his mother had battered him so badly as a child that he wore long sleeve shirts to cover the bruises and that he was raised on a farm by his grandmother.
"I think his values are right and good," said Esther Rimbey of Spokane, Wash., who, with her husband, Ray, has entrusted Kiley with $276,000. "He loves his family, his country," she said. "We have not lost faith with him."
Kiley's show ended with a prayer, and he frequently prayed with listeners who called to inquire about investing through him.
Alex Howell checked around before giving his money to Kiley. "I rang pastors all over the country," said Howell, a resident of Calgary, Alberta. He also checked with the Better Business Bureau and, last October, flew to the Twin Cities to see Kiley's operation firsthand.
The Burnsville home buzzed with visiting investors and staff, who referred to Kiley as "the doctor -- like if you've got money problems, he fixes it," Howell said. From there, Kiley took him to the top floor of a nearby Eagan bank with a conference center and about 30 phones and computer terminals, where sales agents fielded calls. He said Kiley even showed him the computerized "trading platform" at the Van Dusen mansion in Minneapolis.
Howell said he invested $460,000 through Kiley -- his mother's life savings and the family's inheritance from his late father.
"Is it all gone?" he asked a reporter. "That's everything. That's absolutely everything."
Failed relationships
Public records and interviews with Kiley's brothers and two of his three former wives depict a life story at odds with the one Kiley recounted.
He grew up in Grafton, N.D., said Michael O'Brien, one of Kiley's brothers who changed his name when starting a radio career. He was the eldest of six siblings who were raised in town, not on a farm. Their dad sold Ford cars. Tales of being abused by his mom are "absolute nonsense," said O'Brien, who is retired and lives in Washington state.
Tim Kiley, another brother who retired as a disc jockey in Pueblo, Colo., also denied that Pat was raised by a grandmother. He said they used to get along but haven't spoken since the mid-1990s "due to an incident." He declined to elaborate, he said, "only because he's my brother."
O'Brien said that his brother has been estranged from the entire family for years, and that he even skipped their parents' funerals.
"The way he treated both my parents, it's unconscionable," O'Brien said.
On his radio program and website, Kiley described himself variously as a technical financial analyst, a registered financial adviser, the chief economist for a leading financial institution and a senior partner in an international investment banking firm.
Public records found no indication that Kiley has been a registered investment adviser or stockbroker. Though he claimed in a job application to have graduated from the University of North Dakota in Grand Forks with an "associated business" degree, school records show he attended for just two fall semesters in 1958 and 1961.
His marriage to Carolyn Melby ended in divorce decades ago. Neither she nor his three children could be reached for comment.
Another former wife, Bonnie Kiley, said she hadn't thought about Pat for years when she learned about 18 months ago from a friend that his show was carried on KSTP. She said she was both shocked by Pat's "misrepresentations" and amused by his histrionics.
Bonnie Kiley said they met in 1968, when both worked at Northern States Power (NSP), where he sold household appliances. The 6-foot-1 Kiley was a sharp dresser, with a blue suit, embroidered shirts with French cuffs and striped ties, she said. They married in 1971 in Anoka and were divorced in 1984.
Bonnie Kiley said Pat changed jobs a lot during that time, with stints selling insurance, a computer-education program and small "Scamp" travel trailers over the phone.
"I'll tell you this -- Pat Kiley can do the dance on the phone," Bonnie Kiley said. "He knows how to manipulate the words and paint the picture for people."
In 1985, Kiley married Deborah Jo Martin, who said they met at a Twin Cities singles dance. She said he had told her he owned a big business, but it turned out to be a small operation in which he clipped obituary notices and laminated them to cards as keepsakes. After it flopped, Martin said, they moved to Palm Springs, Calif., where Kiley went to work selling for ICA Numismatics, one of several investment coin businesses that he would ultimately work for. Martin left after just two weeks, she said, because Kiley was mean to her sons from a previous marriage. They were divorced in 1989.
At the time, Kiley said he was grossing $1,500 a month from a company he started in May 1988 called Manufacturer's Direct Disposables. State business records list his girlfriend at the time, Mary Wilson, as the registered agent.
Wilson said she met Kiley at a singles gathering in Bloomington. They dated for about two years, but Wilson said she grew tired of his carousing. "He was a raging alcoholic," she said.
Martin and Bonnie Kiley also said he'd been a heavy drinker, a pattern reflected in court records. Most recently, Bloomington police seized and sold Kiley's Lexus automobile after his fourth drunken driving conviction in 2006.
Wilson said she understands the concerns of Kiley's investors. She said he stiffed her and his dry cleaner, Gerald Mashek of Hopkins, on loans for his disposable medical products business.
Mashek shrugged off the debt. "What's $10,000?" he said.
Not Wilson. "The $7,000 or $8,000 he took from me is like a million dollars," she said.
Worldwide reach
Pat Kiley began broadcasting on the Worldwide Christian Radio network in April 2004, according to sales manager Rick Shelton. He said the shortwave station covers the United States and reaches into Canada, Europe, the Middle East, southern Africa and Australia. On the air, Kiley said his program also was carried on 202 AM or FM stations around the country. The show was distributed by a publicist in Grand Rapids, Mich., and went on KSTP in October 2007.
Mitchard, a self-described "blue-collar girl" from Chicago, said she and her husband, Christopher Brent, a master carpenter, "run terrified from most people who do things in the name of the Lord."
But Kiley convinced them that the strategy of using interest-free money from Islamic banks to make bets on foreign currencies would produce consistent, double-digit profits without having to invest in companies that made tobacco, weapons or other products they found ethically objectionable.
Many of Kiley's investors said they learned of his radio program and websites through Bob Chapman, who publishes the International Forecaster, an investment newsletter rife with New World Order conspiracy theories. Chapman was such a regular on Kiley's radio program that he got the moniker "cohost for life."
The men started feuding last summer, and Chapman began warning his readers away from Kiley. "Anyone who has an account with Pat Kiley who has not talked to us regarding it, please e-mail or write us, include a phone number," he wrote in October.
Those who called, like Patty and Ron Sower of Westlake Village, Calif., say Chapman advised them to get their money out of Kiley's investments -- fast. Patty Sower said that Chapman told her that Kiley "was running a Ponzi scheme, and he's a liar; he's not who he says he is."
The Sowers, who invested $158,000 through Kiley, had considered him such a good friend that they saved a message he'd left on their answering machine several years ago. They told him about Chapman's allegations. "He kind of just listened," Patty Sower recalled.
Kiley asked her what she planned to do. "And I said, 'Well, we believe you. You've always been honest with us ... so we're not going to pull our money out.' And we didn't."
Chapman did not respond to requests for comment. In recent weeks, he has been following what he calls "the Kiley saga" in his newsletter, which is widely circulated among Kiley's investors. "Rumor reaches us of a Panamanian casino and high-rise condo investments of some of those involved in the disappearance of funds," he said in a recent entry.
Accounts frozen
In mid-July, many of Kiley's clients began getting form letters saying they could neither make deposits nor withdrawals because of the Ohio investors' lawsuit and pending investigations.
Mitchard said her family's "substantial" investment required decades of scrimping. She and Brent have seven children and are about to adopt two "AIDS orphans" from Africa. "It's heart breaking. I am going to write a story about the human toll of this," she said.
Ward Northrup, 67, of Bloomington, said he's had Kiley to his home for dinner, and Kiley even offered him a high-paying job once.
"Pat Kiley became a personal friend," said Northrup, who invested nearly $100,000 invested through Kiley.
A number of Kiley's clients said they've spoken with investigators from the FBI, the Securities Exchange Commission and the Commodities Futures Trading Commission. Dozens have hired attorneys. But many others said that they'd invested so much of their money through Kiley that they now lack the resources to hire an attorney. Their best hope may lie with the government that Kiley advised them to distrust.
In the meantime, singer-songwriter Shirley Dorr of Warren, Ore., called on her fellow investors Saturday "to go to war through prayer and fasting."
"Pray that the mouthpiece, who had the audacity to use My Holy name deceitfully in order to steal from My people -- Pat Kiley -- Pray that he will have a nervous breakdown," she wrote in a widely distributed e-mail. "Pray that he will be overcome with remorse."
Dan Browning • 612-673-4493
dbrowning@startribune.com
