2000 Mules Company Settles Scam-Related Suit for $5 Million
By David Lieberman, October 2, 2022
The company behind the widely criticized and thoroughly debunked voter fraud documentary 2000 Mules has more to worry about than its sliding sock price. Salem Media just announced in an SEC filing that it has agreed to pay $5.325 million to settle a suit in Texas involving its former radio host William Neil Gallagher, who last year pleaded guilty to a Ponzi scheme that cheated more than 190 mostly elderly and Christian listeners out of at least $23 million. He was sentenced to three life terms.
Gallagher told listeners that he was an experienced investor who could guarantee his investors a 5-to-8 percent return as well as “a better life through ‘personal responsibility’ and ‘less government,’ with ‘the help of God’,” The New York Times reported. Cash from new investors was used to repay previous ones, which the suit against Salem described as “a classic Ponzi scheme.” At a hearing last year, the story adds, “more than a dozen victims of the scheme described being forced to sell their homes, borrow money from their children or take part-time jobs to supplement their Social Security payments.”
Salem Denies Allegations
A receiver assigned by a federal court to collect damages charged Salem with violating the Texas Securities Act and the Texas Uniform Fraudulent Transfer Act. In its court filing, Salem says it “adamantly denies the allegations, but nevertheless believes that settling the lawsuit is preferable to protracted and costly litigation, and thus in the best interests of the Company and its stockholders.”
Salem adds that it was “optimistic it would succeed in resolving the litigation for less than $1.5 million” which it reserved for a potential settlement. But on September 12 the court in Texas denied Salem’s Motions for Summary Judgment.
The September 30 announcement follows Salem’s early-September disclosure that its revenues for the quarter ending September 30 would be lower than expected due to “the postponement of the forthcoming book, 2000 Mules by Dinesh D’Souza, lower than expected revenue on (its streaming platform) SalemNOW…the impact on advertising revenue due to the weakening economic environment.”
David Lieberman covered the media business full time for 30 years at USA Today and other publications before joining The New School as an Associate Professor in its graduate Media Management program. His newsletter focusing on management-related issues, Media Office Hours, will launch this fall.
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After the relatively strong performance of its film “2000 Mules,” the conservative media company Salem has hit some speed bumps that has dented its third quarter financial results.
