Dain Schult, who was an on-air talent at the former WQXI-FM Atlanta in the 1970s, has been found guilty of defrauding nearly $1.4 million from investors in a pyramid scheme. Schult and his business partner Joel Hixon were tried and convicted in a New Mexico court for conning investors out of money said to be used to build a new radio conglomerate.
The two claimed the money was being used to pay for services ahead of a planned initial public offering of Schult’s American Radio Empire. Schult and Hixon also said that investors’ cash would be used to buy up smaller radio stations to help form a larger group, with false plans that they would be available online and on a companywide app, similar to iHeartRadio.
Some of the investors targeted included well-known Atlanta radio personalities. Mike Rose, who served as a program director and producer in the market, told the Atlanta Journal-Constitution that he gave Schult $4,000 over the course of three years. In return, he was promised a potential job and an equity stake in the company.
“My idea was, I’d invest enough to keep me in the game but not enough to kill me,” Rose said. “So if the money went away, I’d be fine.” He believed Schult was credible due to his past radio experience. “He had a real world resume,” Rose said. “He wasn’t just a huckster off the street.”
Others were not so quick to part with their cash. Veteran programmer/air talent Steve Mitchell said he was approached numerous times by Schult, even though the two did not personally know each other. Former WQXI jock Kelly McCoy was also approached and is thankful he trusted his instincts and did not invest in the fraudulent company. “I was glad he got popped,” he told AJC, adding that Schult “had weasel written all over him.”
Schult and Hixon were convicted of fraud over $20,000, securities fraud, conspiracy to commit fraud, the sale of unregistered security and the sale of security by an unlicensed agent. The two were taken into custody and transferred to Los Lunas for a 60-day psychiatric evaluation, the Las Cruces Sun News reports.
“All told, from 1998 to present, we estimate Schult earned $1.4 million strictly from convincing people to give it to him,” Matt Bouillon-Mascareñas, director of securities for New Mexico said, the Sun News reports.
Schult, who now lives in Austin, worked in the Atlanta market at WRAS-FM and WQXI, now known as “Star 94.1” WSTR. Hixon is also a former radio talent that worked in Albuquerque and Las Cruces.