Business

The Rise And Fall Of Wallace Bajjali – Part 1: BizRadio Days

The January breakup of Wallace Bajjali Development Partners left a string of clients in the lurch – including the tornado-blasted city of Joplin, Missouri. The firm’s demise followed years of legal troubles, stemming from its involvement in a multimillion dollar Ponzi scheme.

 

door signThe Wallace Bajjali Development Partners sign in Sugar Land

“All right. Good to have you on board today on the Dan Cofall Show…”

Dallas-based financial advisor Dan Cofall wasn’t looking for a career in broadcasting. It found him. In 2007, he was having lunch with a friend at the Federal Reserve Bank of Dallas.

“He said we couldn’t possibly disagree on more,” Cofall recalls, “but I like what you have to say. How’d you like to do a radio show? And I said, Well, OK, that might be fun. And he said, well, I’m an investor in BizRadio right down the street. I’ll make an introduction for you.”

BizRadio was a small AM radio network with a big online presence. It focused on providing financial advice. The owner and main host was Houston-area businessman Daniel Frishberg. “I went over and met Dan Frishberg,” Cofall says. “I also happened to meet Dave Wallace within a day or two, because generally those two guys were in close proximity to each other.”

David Wallace was the mayor of Sugar Land from 2002 through 2008. The city’s economy was booming, thanks in large part to development projects that came to fruition on his watch. He also ran his own real estate development firm with partner Costa Bajjali.

Dan Stewart worked on and off for Frishberg for about fifteen years, ultimately running the Dallas/Fort Worth office of Frishberg’s financial services firm. Stewart’s parents were early investors with Wallace Bajjali Development Partners.

“Bajjali was more of the nuts and bolts of taking care of the day to day operations,” Stewart says, “and then Dave Wallace was the front man that was out there front and center, usually was the lead doing the presentations.”

Stewart liked Wallace and Bajjali. But he grew more and more concerned as he noticed a large number of transactions between funds tied to the two developers and Frishberg’s operations. “It was just a very incestuous relationship,” he says. “Daniel Frishberg would raise money. They would put money into Wallace Bajjali Real Estate Fund, and then in turn, Wallace Bajjali would pay money back to BizRadio as a real estate investment.”

In fact, money from Wallace Bajjali clients was the only thing keeping BizRadio alive.  Many of those investors were at or near retirement, such as Houston-native Ron Ellisor.

“Wallace was successful with [what he was] doing in Sugar Land,” says Ellisor, now one of the plaintiffs in a lawsuit against Wallace Bajjali. “He was using that as a success story to move into these other limited partnerships. And of course, real estate was going through the roof in ‘05,’ 06, up to ‘07, when it kind of fell apart. But then even afterwards, Wallace was always able to do a soft shoe around it, it seemed like.”

Dan Cofall said many of those drawn into the scheme had no idea where their money was going. “I remember clients that essentially had 100 percent of their investment with Dave Wallace and Costa Bajjali,” Cofall says, “and that’s absolutely unconscionable.”

Finally, in 2009, the Securities and Exchange Commission stepped in, filing civil fraud charges against Frishberg, Wallace, Bajjali, and BizRadio co-founder Albert Kaleta. Neither Wallace nor Bajjali fought the charges, each agreeing to pay a $60,000 fine. But that still left dozens of former clients who’d lost millions investing with the pair, lining up to sue.

We made repeated attempts to reach Wallace and Bajjali for this story. Neither returned requests for comment.

 

The lawsuit against Wallace Bajjali

 

Also, read  The Rise and Fall of Wallace Bajjali – Part 2: Joplin’s Not Sugar Land

 

Share

Andrew Schneider

Andrew Schneider

Politics and Government Reporter

Andrew heads Houston Public Media’s coverage of national, state, and local elections. He also reports on major policy issues before the Texas delegations in the U.S. House and Senate, as well as the Texas governorship, the state legislature, and county and city governments. Before taking up his current post, Andrew...

More Information