A former WQXI-FM jock Dain Schult, known in town a the “Silver Haired Man of Rock and Roll,” has been found guilty in New Mexico of defrauding about $1.4 million from investors in a pyramid scheme developed over a period of many years.
A jury found Schult, 65, who lives in Austin, and his 69-year-old partner New Mexico business partner Joel Hixon guilty of securities fraud in a pyramid scheme that promised to use investors’ money to promote “mom and pop” radio stations on the Internet.
According to the Las Cruces Sun News, they were both taken into custody and sent to a facility for a 60-day psychiatric evaluation. A judge will render their punishment at a later date.
Schult for many years was attempting to build a media empire. In fact, the name of one of his companies was American Radio Empire.
He met up with many Atlanta radio folks he knew to try to wrangle money for his investment.
Mike Rose, a former radio producer and program director, said in an interview that he gave Schult $4,000 from 2011 to 2014. Schult promised Rose a potential job with the company and an equity stake in the company that could be cashed in after an IPO.
But Rose was calculating. He did this more as a small bet, not as a sure thing.
“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 thought Schult’s radio experience gave him credibility. “He had a real world resume,” Rose said. “He wasn’t just a huckster off the street.”
But Steve Mitchell, a former 96rock and Y106/Eagle 106.7 jock, said Schult called him five years ago seeking money although Mitchell barely knew him. Mitchell was not amused and didn’t take the bait.
Others found his grandiose talk suspect from the start.
“Always had doubts about Schult's American Radio Empire,” wrote John Long, president of the Georgia Radio Hall of Fame, on a Facebook post. “A blemish on Georgia radio people.”
“I was glad he got popped,” said Kelly McCoy, a former WQXI jock who was solicited but did not invest in Schult’s company. “Had ‘weasel’ written all over him.”
Richard Warner, a former radio man who worked at WGST-AM and WSB-AM, was another target.
“I agreed to meet with [Schult] as much out of curiosity as anything else,” Warner said. “I can't claim to be brilliant about spotting a fraud, but my career was moving away from radio and toward my own thing, so it didn't make sense. We met once and he called several times after.”
Nothing came of it, especially after McCoy warned him of Schult’s dubious ways.
Schult promised investors the sale of promissory notes would be used to purchase smaller radio stations around the United States. That never came to fruition because he was using the money to live on, prosecutors said.
Rose said after the initial New Mexico case hit the media last year, he called Schult, who said this was simply a case of an overzealous prosecutor and that he was innocent.
Schult, on his Linkedin page (since deleted), described himself as “a multimedia veteran with decades of hands on experience and success in the broadcast, wireless and Internet industries.”
He worked at WRAS-FM and for many years was a night jock at WQXI-FM, which was 94Q for a period of time while he was there in the 1970s.