Category: San Diego

Ray Lucia Is Wrong on REITs

Ray Lucia speaking at Sean Hannity’s Freedom Concert in San Diego. Photo by Andi Hazelwood.

For more visit: A Professional’s View of Ray Lucia’s Non-Trade REITs

 

In 2010, radio talk show host Ray “Buckets of Money” Lucia threatened to sue me for $300,000 for defamation over a blog post on this website. My post pointed out Lucia’s relationship to a securities firm that paid $2 million to settle U.S. Securities and Exchange Commission charges.

Nothing ever came of the threats and, coincidentally, (or not?), Lucia shortly thereafter told the SEC that he would no longer register with them as investment adviser. Lucia still hosts his radio show and rounds up new clients at his free seminars with actor Ben Stein.

I was content to leave things alone until last week when I heard from a client of Lucia’s son, Ray Jr., who now runs the investment business started by his illustrious father.

This person, whom I’ll call Joe, is, runs a small home repair based business and is approaching retirement age. Joe attended one of Lucia Sr.’s “Buckets of Money” seminars 18 months ago and entrusted his money to Lucia Jr.  He wishes he had read this blog beforehand.

Today, they are illiquid. About $80,000 of Joe’s money — 30 percent of his net worth — is locked away in real estate investment trusts (REITs) that aren’t traded on any exchange and therefore can’t be sold for years.

Joe’s wife is ill and may need to take early retirement, which leaves Joe wondering how he’s going to pay the bills.

For some retirees, REITs can be a good investment. REITs are required to repay at least 90 percent of taxable income to investors or the forfeit their tax exempt status. So, they are sort of function like bonds but with much better rates, something like 6 percent.

So what’s the catch? The REITs Joe is invested are non-traded REITs. This is an investment that can’t be sold for years — at least not without taking a big loss. FINRA, the financial industry self-regulatory body, last year issued an investor alert warning about the dangers of these non-traded REITs.

Both Ray Lucia Sr. and Jr. are big believers in these non-traded REITs. What they don’t tell you is that it’s a great deal for the folks at RJL Wealth Management. Brokers love non-traded REITs for the whopping commission a sale generates, which can range between 10 percent and 15 percent (!). If you really feel that you need a REIT in your portfolio, then buy a publicly traded one on Charles Schwab or some other online broker where the commissions run $8.95.

Joe never found out what the commissions were on his non-traded REITs including Behringer Harvard Multifamily I, which for years has combined high fees with poor performance. (For more, see reitwrecks.com’s Non-Traded REIT Forum.)

But that’s not all! For getting Joe in this predicament, RJL Wealth Management, Lucia Jr.’s company, collects a 1.9 percent fee — more salt on the wound. Buyer beware.

 

Brent "The Enigma" Wilkes Continues to Drain Taxpayers

Another Winning Hand for "The Enigma"

It’s been a long time since we heard from Brent “The Enigma” Wilkes. But the Enigma is back, baby!

Last week, the 9th U.S. Circuit Court of Appeals granted Wilkes a new hearing in his case in San Diego federal court.

Wilkes, you may recall, was the sleazy defense contractor at the center of the Randy “Duke” Cunningham bribery trial. Cunningham steered defense contracts to Wilkes, who used the money to live high on the hog. He was poker buddies with Kyle “Dusty” Foggo, once the No. 3 guy at the CIA.

In 2008, Wilkes was convicted of bribing Cunningham with prostitutes and other goodies and sentenced to 12 years prison. By all rights, he should be there. But Wilkes, the master manipulator, continues to game the system.

The 9th Circuit allowed Wilkes to go free on bond pending his appeal. While Cunningham, Foggo and others do time, Wilkes runs around playing poker at San Diego casinos (where he goes by the nickname “The Enigma”). Meanwhile, his taxpayer-funded attorneys bombard federal prosecutors with reams of paper on his behalf. What a fucking waste.

Now it looks like the legal maneuvering by Team Enigma will drag into a fourth year. Your taxpayer dollars bought Wilkes more time because The Enigma’s lawyers argued successfully that the judge presided over Wilkes jury trial failed to read the minds of the judges 9th Circuit Court of Appeals.

The trial judge, Larry Burns, declined to grant immunity to one of the government’s witnesses that Wilkes wanted to call for his defense. According to the 9th Circuit, this was a no-no because Burns failed to apply the 9th Circuit’s holding in a separate, unrelated case that was decided after Burns made his ruling. Wow. Just wow.

All of Wilkes other arguments were brushed aside, including one that I found particularly interesting: Why was Cunningham never called to testify. According to prosecutors, “one of the reasons the Government did not call Cunningham at trial was because prosecutors did not trust him to refrain from fabricating testimony that he believed would help the prosecution (and thus enhance his chances for a reduced sentence).”

 

Awlaki FBI FOIA Request

October 4, 2011

David M. Hardy
Section Chief, Record/Information Dissemination Section
Federal Bureau of Investigation
Attn: FOI/PA Request
170 Marcel Drive
Winchester, VA 22602-4843

Dear Mr. Hardy:

This letter constitutes a request (“Request”) pursuant to the Freedom of Information Act, 5 U.S.C. subsection 552.

I am requesting a copy of all records or information concerning ANWAR AL-AWLAKI (aka Anwar al-Aulaqi).

Mr. Awlaki was born in 1971 in Albuquerque, New Mexico. He was killed in Yemen on Sept. 30, 2011, according to a statement President Barack Obama made the same day. I trust the attached statement of the president will serve as the proof of death you require for this request.

Awlaki was a leader in al Qaida in the Arabian Peninsula (AQAP) and was one of the most wanted terrorists in the world. He was the subject of numerous investigations by the FBI for more than a decade.

If you deny all or any part of this request, please cite each specific exemption you think justifies your refusal to release the information and notify me of appeal procedures available under the law. I expect you to release all segregable portions of otherwise exempt material.

I look forward to your reply to this Request within twenty (20) business days as required by 5 U.S.C. 552(a)(6)(A)(i).

Thank you for your assistance.

Sincerely,

Seth Hettena

Anwar al-Awlaki's Death

The US is announcing the death of Anwar al-Awlaki, a U.S. citizen who moved to Yemen where he waged jihad against his former homeland. Assuming this is true — and not a repeat of what happened in 2009 when Awlaki was falsely reported as dead — it’s a major blow against one of al Qaida’s superstars.

What made Awlaki so dangerous wasn’t his so-called operational abilities, as the U.S. is now claiming, although no one is actually bothering to ask what that means. Awlaki was an intellectual, not a fighter. What made Awlaki so dangerous was his somewhat unique ability to inspire disaffected Muslims in the West to take up arms in the cause of jihad.

Awlaki may have rejected the West, but he knew how it worked. He spent many years here in San Diego and spoke both Arabic and English beautifully. Recordings of his sermons are very popular. He also knew how to use the Internet to reach people. I don’t think it’s a coincidence that U.S. counterterrorism officials started linking him to terrorism in the very same month that Awlaki started his now-defunct jihadist website.

What I always found fascinating about this so-called holy man got busted for prostitution twice in San Diego and was picked up by San Diego police for “hanging around a school.”  Maybe that’s why he needed his martyrdom, so he could wash his sins away. (I’ve written about him before here.  I also put together a comprehensive timeline.)

I won’t be shedding any tears for a man who plotted to kill Americans and praised the Fort Hood shooter Nidal Hasan as a “hero.” But Awlaki wasn’t Osama bin Laden. He wasn’t an Iraqi insurgent or a Taliban trying to kill U.S. troops. Awlaki a U.S. citizen.

He knew his death would point out the hypocrisy of a country with a constitution that guarantees its citizens due process of law and then goes out and assassinates them in Yemen with a drone strike. He knew we would succumb to our fears.

Like it or not, he was one of our own.

Reader haunted by encounter with man who attended San Diego mosque

I received this striking comment today from a reader who commented on my 2009 post on the San Diego connections to the Fort Hood shooting. I am reposting it here so hopefully more people will read it. He’s not sure whether the mosque he is referring to is the Rabat mosque in San Diego, where Anwar Aulaqi preached in the 1990s:

I am haunted by an encounter I had in 1996 with a man who attended that San Diego mosque. I was working at a military inpatient psychiatric hospital and the man was a patient of ours. He was with us long term because he was awaiting discharge from the military. There was not much notable about the patient until he started getting passes that allowed him to leave the hospital on weekends and certain evenings during the week. He did not have an Arabic name nor was he Arab, but at some point he began attending the mosque. Almost immediately there was a drastic change in he personality. He was constantly angry and confrontational. Our patients were not allowed in their rooms during the day (for their own safety.) We kept finding him in his room praying and kept having to re-direct him out onto the day area to do his prayers. (I couldn’t care less that he was praying, but we had to enforce the rules on everyone irregardless. This was a locked down, very acute care inpatient psychiatric unit that received patients via MEDI-VAC from all over the world) One day I had to go coax him out of the room again cause he had sneaked in there to pray. He instantly became confrontational, but it then took an unexpected turn. He began confronting me about being a Christian. (I didn’t tell him anything about my religious beliefs. He just assumed I was Christian.) Then he began yelling at me that one day I’ll have to stand in front of Allah for judgment and that he will be standing there with me laughing at me. He said something about Jesus being a fool and carried on about how he hates Christian’s & Jew’s and they will all burn in hell. I finally cut him off while laughing at him and I told him to get out of his room now I’ll he was going to have to spend some time in our isolation room. He stopped yelling and walked out into the day room to continue his prayers. I acted as though I had laughed it off, but truthfully it shook me up inside. I was not intimidated by him physically. I towered over this little man. I’m 6’4″ and weighed 250 pounds at the time. I had never seen anyone truly look at me with such hatred that there was murder in his eyes. I know if he had a weapon in his hand at the time, he would have used it. Knowing now what kind of people were coming and going from that mosque, my haunted, shook up feeling I experienced was justified.