A small-time Minneapolis salesman who found his niche on the radio peddling investments in foreign currencies was sentenced Monday to 20 years in federal prison for his role in a $194 million Ponzi scheme that bilked more than 700 investors nationwide.
Patrick Kiley, 75, had attracted 70 percent of the investors through his former radio program, "Follow the Money," which was broadcast on a Christian shortwave network and bought time on about 200 stations at its peak. He appealed to listeners with a pitch that fomented distrust of the U.S. government and fanned fears about a cratering stock market.
But the investment product Kiley sold was a sham created by his longtime sidekick, Trevor Cook, who was sentenced to 25 years in prison after pleading guilty in 2010 to running a Ponzi scheme. Several other participants in the scheme were sentenced in January to terms ranging from 7½ years to 30 years in prison.
Kiley has protested his innocence all along, claiming he was duped just like the investors. Then in January, he managed to delay his sentencing, accusing his attorney at the time of misconduct and ineffective advocacy. Chief U.S. District Judge Michael Davis delayed the sentencing, appointed new attorneys to represent Kiley and ordered an independent psychiatric and physical evaluation.
Kiley, who once prided himself as a sharp dresser, appeared in court Monday wearing a baggy green polo shirt and oversized bluejeans with a four-inch cuff rolled above black canvas sneakers. He ambled to the podium and told Davis that what he once believed about Cook's investment product turned out to be wrong, adding that he was prepared to take his punishment.
Kiley's new attorney, veteran white-collar defense attorney John Lundquist, said Kiley is remorseful and aware of the seriousness of his crimes. But he asked for leniency, noting Kiley's age, the fact that he has recurrent prostate cancer and a bladder tumor.
"Any sentence carries the very real potentiality that it might be a life sentence for Mr. Kiley," Lundquist said.
The hearing took a strange turn when attorneys clashed over the accuracy of comments Kiley made during his psychiatric evaluation.
Lundquist cited excerpts from the report asserting that Kiley's mother "routinely beat" him, rendering him "an adult survivor of traumatic physical, emotional, verbal abuse and neglect" and contributed to him becoming "compliant, conciliatory and placating" as an adult.
Assistant U.S. Attorney Tracy Perzel then read three letters from investors and one from Kiley's brother, Michael O'Brien, urging a harsh sentence.
O'Brien said his brother's claims of abuse are a "total fabrication." He said he and his five siblings were disciplined by their parents but only when they deserved it.
"Patrick was a bully. He had a history of being just plain mean," O'Brien wrote. "I will not allow him to trash the memory of my mother or my father."
O'Brien said he changed his surname as he developed a successful career as a radio disc jockey — and because of his brother's actions he's glad he did.
Ken Locklin of Fredericksburg, Texas, called Kiley's psychiatric evaluation part of a continuing con game. He noted that Kiley portrayed himself on the radio as a sophisticated and successful financial adviser with worldwide connections. "He now has changed his role to schlep as a helpless invalid bereft of ability or will of his own. Perhaps he should have been an actor," Locklin wrote.
Margueritte Witte of Meadview, Ariz., described herself as a 74-year-old widow who lost her life savings of $20,000 in the Ponzi scheme, and asked Davis "not to be taken in by Mr. Kiley as I was."
Kiley slumped forward as Davis sentenced him to serve 180 months for his 13 fraud charges, and 60 months on two money-laundering charges. The fraud and money-laundering charges will run consecutively, for a total of 240 months.
Davis noted that the scheme cheated ordinary people who worked all of their lives, not hedge funds, and that it targeted religious people who might be more inclined to trust others of similar beliefs.
"You brought in more than $140 million into this scheme," Davis said. "Let it be said, your age does not trump what you did here. You were the engine that kept the Ponzi scheme going."