Arthur Laffer, the right-wing economist who is second only to Reagan in right-wing masturbation fantasies for allegedly proving that lowering taxes increases revenue (it doesn't), has been sued for his alleged involvement in a Ponzi scheme that bilked investors of at least $3.1 million.
Laffer gave us the Laffer Curve and was a prime architect of Reaganomics; he's so dreamy to tax-haters that Newt Gingrich speaks his name, and touts his endorsement, with reverence. Turns out he's also—at least according to 52 investors who are suing him in Texas for fraud, negligence, and breach of fiduciary duty—a con man who lent his name to a Ponzi Scheme.
The plaintiffs accuse an investment fund called Laffer Frishberg Wallace Economic Opportunity Fund, of which Laffer was a principal, of fraudulently funneling investor dollars into a radio company called BizRadio that the firm's managers were tight with. From the complaint:
The BizRadio business was a Ponzi Scheme constructed with the support of the 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. Defendants were the primary source of BizRadio's funds.... [The investors] were repeatedly solicited for additional investments with returns which Defendants knew were not possible except through a pyramid scheme. Defendants continued to provied funding to BizRadio...long after they were aware that the promised returns were false and that BizRadio was perpetrating a fraud on investors.
Laffer, it turns out, was a radio personality for the failing network at the same time his investment firm was funneling other people's money into the venture—along with his partner (and fellow defendant) Daniel Frishberg, he offered "top-level insights into the world-wide markets...using language and stories that everyone can understand and enjoy." Frishberg, the complaint notes, was the target a fraud lawsuit from the Securities and Exchange Commission in 2009.
The complaint doesn't specify how much money the investors lost—one of the funds it is suing plowed more than $3 million into BizRadio, and Laffer's fund "contributed significantly more than that." The suit, which can be read here, seeks unspecified restitution and damages.
Neither Laffer nor the plaintiff's attorney returned phone calls.
[Image via AP]