SEC charges founder of Chicago Sports Webio in fraud

By Ameet Sachdev | Tribune reporter

11:02 AM CDT, June 15, 2009

The U.S. Securities and Exchange Commission on Monday accused David Hernandez of running a fraudulent investment scheme. Hernandez started an Internet-based sports talk show with Chicago radio personality Mike North.

In the civil lawsuit, the SEC charged Hernandez of operating a Ponzi scheme and diverting investor funds to buy cars, jewelry and a piano among other things. He also transferred funds to the bank accounts of two other companies he controlled, including Spectrum Entertainment Group Inc., which funded the talk show, Chicago Sports Webio, the SEC said.

The complaint also said that Hernandez is a convicted felon and that he and his wife, Gina Hernandez, have filed for bankruptcy in 2004, 2005 and 2006. In 1998, Hernandez was convicted of wire fraud arising from previous employment at a bank.

Hernandez could not be immediately reached for comment.

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"I still think its a tremendous idea".
"It's my baby".

This guys has an incredibly checkered past. Bankruptcies each year from 2004 to 2006, convicted felon, wire fraud.

He's clearly the bad guy but North and Schwartz are total idiots for hooking up with him and betting 30 people's lives on a guy like this.

I'm betting North asked all of the webio talent to stay at work to preserve the value of the entity while he tries to take control, which should be much easier now that this guy has been charged. It may just work, but the dog still won't hunt.

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"I still think its a tremendous idea".
"It's my baby".

My guess is the feds will move to freeze all of Hernandez' assets. Any liquidation would be years away.

This can't be good for CSWebio.

well the guy is a long-time fraud, he obviously knows how to con people so it may not be north's complete stupidity to hook up with the guy. still though... public record could have told mike that shit is questionable.

hopefully this will give the station back to its rightful owner though. north can run the webio as it should be, honestly i wouldnt mind if he left comcast to focus on the webio... but either way im GLAD the SEC and FEDS are taking care of business. sounds like this hernandez guy is a real piece of shit.

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the world will always the world. your entire existence is defined by your response.

+1

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"I still think its a tremendous idea".
"It's my baby".

its sad as hell. sad for the employees, sad for the hosts, sad for listeners... and of course mike. i wish i could have 5 min in a room with hernandez. i would fuck that nigga up.

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the world will always the world. your entire existence is defined by your response.

You are a fucking idiot, Ike.

oh nos what am i goin to do a burrito from the internets said i suck. ouch bro, that hurt. black asshole.

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the world will always the world. your entire existence is defined by your response.

Its obvious that Hernandez is a bad guy based on what we've all read but the real issue is how North and Schwartz could have gotten in bed with him. A $100 background check would have revealed all of this. Perhaps they knew and chose to ignore in order to get this funded but that would be worse than stupidity and I can't imagine they'd do that as you know this would come home to roost eventually. This is basic business IQ test stuff and everyone involved failed the test.

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"I still think its a tremendous idea".
"It's my baby".

unreal. what a douchebag.

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@audioidkid

Hernandez or Ike South?

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North has lawyers, North has contacts in the Chicago business world and Chicago media, North has his oft-mentioned "street smarts." My mind is still reeling at the thought of North hooking up with this guy in such a high-risk business environment with the futures of so many of North's "friends" and former colleagues on the line and not having any inkling of this guy's past. Yes, North may be a victim of David Hernandez, but it also must be said that he's a victim of his own stupidity and irresponsibility if he really thought this crook was his ticket to the future that is webio.

Why would you be suprised that he didn't do a background check? Hernandez fooled EVERYONE not just North or Spaceball, besides North isn't really known for intelligence is he. He is a radio host not a Mensa! People get conned from every walk of life, I think that the hatred of North clouds the rational thinking of people who normally are rational.

Isnt there a limit on number of bankruptcies one can file?

a piano? Really???????

if the webio fails there is one thing certain- it was hernandez's fault, his fault solely, and everybody else is completely innocent in every way.

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the world will always the world. your entire existence is defined by your response.

+1. I know most people are saying that it not North's fault, but I still feel like North sold these people a bill of goods.

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The thing is not only North got in on this but all of the other hosts went along with it without checking out their "benefactor". It seems to me if you are going to get involved with a risky internet venture you might want to know who is signing the checks. Who knows maybe even do a google search on the guy. But that would make too much sense.

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North has (or should have) "people" to look into these kinds of things. This isn't like getting taken by an unscrupulous contractor who's puting new tile in your bathroom; this was the startup of what was to become a major business with big-time payroll and advertising commitments.

I wouldn't say Ike's a douchebag. Just really really weird.

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Kid Cairo's Boers & Bernstein YouTube Channel

Kid Cairo: 2013 March Madness Tournament Winner!

"Cowabunga? Cowa fucking piece of dog shit! This game is diarrhea coming out of my dick!"

Hernandez...

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@audioidkid

A little of both. Nothing like tough guys.

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Middle Aged Crazy, like Uncle Terry

I guess the grass isn't always greener on the other side of the fence.

I hope some of these guys land on their feet and get employed.

It is pretty sad for the employees - but North and Spaceball should have run SOME type of background check on this guy before being blinded by the bling. This has a certain 'Boiler Room' feel to it...

Dealer's choice ...

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Power is always in the hands of the masses of men. What oppresses the masses is their own ignorance, their own short-sighted selfishness.
- Henry George

Apparently Jen didn't have the names of any good background-checkers in that "best Rolodex in the business" of hers.

I'm not feeling the racial tone that IkeSouth is bringing to this thread.

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But we don't really know what Ike is.

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Kid Cairo's Boers & Bernstein YouTube Channel

Kid Cairo: 2013 March Madness Tournament Winner!

"Cowabunga? Cowa fucking piece of dog shit! This game is diarrhea coming out of my dick!"

Perhaps the real question here is who gets the piano now?

It's hard in the current—both hopefully strengthening—regulatory environment to get charged by the SEC. Anyone see last night's 60 Minutes piece about the SEC? It's much worse than I thought.

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I distrust those people who know so well what God wants them to do, because I notice it always coincides with their own desires. -Susan B. Anthony

Yeah but he's ignorant to call Chris in St Charles a black a-hole...I've hung with the dude and he aint black...

Ok, I'm done talking about Ike South...back to the real DB - Mr. Hernandez.

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