Erick Mathe had a vision of creating a media empire. Well, maybe not an empire, more of a small keep. His plan was to broadcast over Low Power Television Service. Those are locally-oriented television broadcasts in small communities. Mr. Mathe had a line up of streaming music and infomercials. He just needed capital to get the business going.
It won’t surprise you that Mathe has been charged with fraud. There is an SEC complaint in Florida and a criminal indictment in Pennsylvania. Mathe has not responded to the charges so I have to rely on the government’s view of the facts. It looks like Mathe saw that raising the capital and taking a commission was more lucrative than running the television business.
Vision Broadcast Network had four stations lined up for delivery of its content and said that it had licenses for 70 more. It’s “Ask the Specialist” subsidiary was lined up to provide medical educational resources. That subsidiary was particularly useful because it put Mathe in contact with wealthy doctors who were potential investors.
What caught my eye was a registration filing that Vision Broadcast Network made in 2009 with the Securities and Exchange Commission. It looks like it had the good intention at that time to be a legitimate business.
In the filing, there is a Code of Ethics as an exhibit.
“Act in good faith, responsibly, with due care, competence and diligence, without misrepresenting material facts or allowing one’s independent judgment to be subordinated. “
Mathe met Ashif Jiwa who persuaded him that he could help raise additional investment funds because he operated a hedge fund and acted as a financial adviser to the Prince of Dubai. Mathe paid Jiwa a commission on capital raised. At some point Mathe decided that he should also pay himself a commission for capital raised.
Perhaps that was the turning point. Mathe became more focused on raising capital than operating his business. According to the SEC complaint Mathe was misleading investors about revenue, capital commitments, and the success of the business.
He was ignoring his own code of ethics.
Sources:
- SEC Complaint against Erick Laszlo Mathe and Ashif Jiwa
- DOJ Complaint against Erick Laszlo Mathe and Ashif Jiwa
- Press release on action against Laszlo Mathe and Ashif Jiwa
- Form 10 Registration Statement for Vision Broadcast Network
- Code of Ethics for Vision Broadcast Network
- FCC Guide to Low Power Television (LPTV) Service
- Ask the Specialist Promo Video
- Image of WTVR Television Antenna is by Jim