Kiley denies role in Cook Ponzi scheme

Pat Kiley, a former radio talk-show host who solicited investors for Trevor Cook's $190 million Ponzi scheme, accused his former attorneys Thursday of a "web of skulduggery" that included forging his signature to a court document, doing little work on his behalf and acting in cahoots with Cook, who handpicked the lawyers and paid their fees.

Kiley, 72, appeared before Chief U.S. District Judge Michael Davis in Minneapolis to explain that he wants to be represented by Henry Nasif Mahmoud, a lawyer from Stone Mountain, Ga. But he said they haven't found any local counsel to sponsor Mahmoud's appearance in Minnesota because of the publicity the case has received in the Star Tribune.

Steven Seeger, an attorney for the U.S. Securities and Exchange Commission (SEC), said the agency's lawsuit against Kiley has dragged on for 11 months already and he should be required to file a response. If he fails to do so, Seeger said, the SEC would pursue a default judgment. An attorney for the Commodities Futures Trading Commission (CFTC), which has a parallel suit against Kiley, echoed that sentiment.

Kiley fired his former attorneys -- Peter Wold and Aaron Morrison of Minneapolis -- in August, citing differences over legal strategy. But Thursday Kiley complained that he had never wanted them to represent him and said they failed to prepare a response to the lawsuit.

"They got $110,000 and did nothing for it," Kiley said. "They never even sat with me and gleaned the facts of the case."

Kiley accused Wold and Morrison of forging his signature on a temporary injunction in the case. "I never even knew of the temporary injunction," he said.

Wold chuckled when a reporter asked him about Kiley's allegations. "I can say we never forged Pat's name to anything, and I'm sorry he's misguided about that. I wish him luck," he said. "I wish him the best, but obviously we had disagreements about what was in his best interests."

Kiley said that "while Wold and Morrison were taking orders from Cook and [his attorney William] Mauzy, Mahmoud was not." He said Mahmoud helped him prepare a 56-page response to the allegations in the SEC and CFTC lawsuits.

"I was duped, just like the investors," Kiley told Davis. "I lost everything."

Kiley, a longtime associate of Cook's, pitched the currency investment scheme on his "Follow the Money" radio show, which was broadcast on a Christian shortwave radio network and on more than 200 radio stations in the U.S. He said Thursday that he believed the foreign currency strategy Cook pitched was legitimate until Cook got "greedy" and turned it into a Ponzi scheme.

Davis cut him off, saying he wanted to ensure he was protected. He told Mahmoud that he would help him find local counsel to sponsor his admission as the attorney of record in the case.

That might be difficult in a civil case, however, considering that Kiley says he's destitute.

After the hearing, Kiley filed his response in the case, telling the court clerk that it should be placed under seal. After a reporter objected, the clerk checked with the court and filed the document publicly.

In it, Kiley denies any wrongdoing. He claims that any misrepresentations about the foreign currency investment were the responsibility of Cook; Marc Trimble, a St. Paul Web designer who also pitched the program; and others.

Cook pleaded guilty to fraud and tax charges and has been sentenced to 25 years in prison. Trimble has not been charged and has said he's cooperating with authorities.

Kiley wrote in his court filing that he believed in the program "100 percent" until some Ohio investors filed suit in July 2009 complaining they couldn't withdraw nearly $5 million. Before that, Kiley said, he understood from Cook that a pending SEC investigation had to do with one of Cook's business associates -- money manager Bo Beckman -- who allegedly had filed false financial statements with the National Hockey League in an effort to buy into the Minnesota Wild.

Kiley denied sending any money by wire or even writing a check. He said that Beckman, along with former business associates Gerald Durand and Christopher Pettengill, used his signature stamps to make withdrawals and transfers from accounts he controlled.