Investors Say Supply Sider Arthur Laffer Backed a Ponzi

[The Straight Story]

Investors Say Supply Sider Arthur Laffer Backed a Ponzi


HOUSTON (CN) - Fifty-two investors claim fund managers associated with supply-side economist Arthur Laffer took $3.1 million to prop up a Ponzi scheme, then said nothing as their money was "wasted with no reasonable expectation of recovery."

Lead plaintiffs Ronald and Lavonne Ellisor sued David Wallace, Costa Bajjali, and their entities Wallace Bajjali Development Partners LP, Wallace Bajjali Investment Fund II LP, the Laffer Frishberg Wallace Economic Opportunity Fund LP, and Arthur Laffer in Harris County Court.

Laffer is best known for the Laffer Curve, an economic theory that says reducing taxes will increase government revenue. He was a member of President Reagan's Economic Policy Advisory Board during the 1980s.

...

It continues: "The limited partnerships are investment vehicles run by defendants Wallace and Bajjali, with endorsement and participation from Laffer. They started out primarily in real estate investments, and solicited investors for their various real estate investments. In September 2006, WBIF II made its first investment in Business Radio Network, LP ('BizRadio') in the form of advancing convertible promissory notes. By December 31, 2006, WBIF had advanced to BizRadio $1,493,170.00, and by June 30, 2007 the invested balance in BizRadio was up to $3,157,170.00. LFWEOF [Laffer Frishberg Wallace Economic Opportunity Fund] has contributed significantly more than that. At that time, BizRadio was looking to purchase radio stations in both Houston and Dallas/Fort worth at an estimated cost of $12,000,000.00.

"The BizRadio business was a Ponzi scheme constructed with the support of defendants. BizRadio never generated sufficient revenue through the sale of airtime to keep itself a viable entity. BizRadio was able to exist through the continuous influx of additional capital until it eventually collapsed in upon itself.

http://www.courthousenews.com/2012/01/11/42956.htm

[DURHAM D]

1. So Laffer is no longer laffing...

finally.

[rfranklin]

2. Well, you can't really blame Laffer...but anyone who invested based on his name...

should be too embarass to make a stink.

[ErikJ]

3. He probably wrote out his business plan on a napkin

during a 3 martini lunch. Like he did with his famous Laffer Curve.

[Jello Biafra]

4. Doesn't the Laffer Curve depict a Ponzi scheme? n/t

[louis-t]

5. I did not know Laffer was part of the Reagan team.

That explains why the national debt tripled under Reagan. Idiot.