The anonymous phone message blasted The Watchdog for my coverage of W. Neil “Doc” Gallagher’s arrest. The financial adviser is accused by federal and state authorities of running a $20 million Ponzi scheme victimizing more than 60 seniors who trusted him.
Gallagher, 78, known from his many years of buying air time on local radio stations, remains in Dallas County jail on $1 million bond.
“Your article on Doc Gallagher is a disgrace,” the female caller said. “What did you hope to gain? His family is suffering, and there is no reason for you to print that. It’s already common knowledge.
“Good men fail sometimes. He was a good, great Christian speaker, Bible study teacher and did many, many, many, many good things for foster children. ... I am very disappointed that you would take the time to be vindictive.”
Why did I write the story? I did it for Susan Pippi and dozens of others who bought into Gallagher’s alleged schemes and trusted him.
The 71-year-old Bedford woman told me that she and her husband lost about $675,000, their life savings. They say they’ve nothing left but Social Security.
That is why I write this story.
‘We trusted him’
Gallagher knew Susan Pippi suffered from lymphoma, she said.
“Gallagher took all my resources with nothing left to fight my disease.”
Their relationship began after she heard him on the radio. She and her husband attended two sales pitches at restaurants.
They bought in.
“We trusted him. He sent you flowers, bought you gift cards, invited you to dances at big hotels.
“He made every individual feel special. You would think he was family. He was your brother. We were so stupid.”
The couple didn’t find out their world had crashed until they saw a TV news report about his March arrest.
“It was a kick in the gut,” husband A.J. says.
“This killed me psychologically,” Susan says. “I didn’t want to live anymore. That’s how I felt when this hit.”
Gallagher remains in jail eight weeks after his arrest. His Gallagher Financial Group is shuttered and under the control of a court-appointed receiver trying to find the missing money.
Gallagher denied The Watchdog’s request for a jailhouse interview.
His lawyer hasn’t returned my calls.
Why is he still in jail? I found one clue in one of his books, The Money Doctor’s Guide to Taking Care of Yourself When No One Else Will.
In a chapter on offshore accounts, he wrote: “All of the investigative agencies ... will not be able to find your sheltered accounts and assets. This makes you a poor prospect for a lawsuit or seizure. Judgments of U.S. courts are not recognized in the Bahamas.”
He continued, “Who should use an offshore corporation? People who work hard for their financial rewards and who want to keep their assets secret and out of reach of lawyers and lawsuits or seizure by government agencies.”
He described “taking on a crusading government regulator who resents your success. And sometimes it’s not a federal regulator. It could be city, county or state.”
He’d know. He’s now had run-ins with regulators going back 20 years.
Reprimanded and fined
In 1999, Gallagher was reprimanded and fined $25,000 for engaging in fraudulent business practices, including falsifying check-receipt books and falsely claiming he was a registered investment adviser.
Gallagher has not been registered to sell securities since 2001 and not associated with an investment advisory firm since 2009, according to the Texas State Securities Board.
Gallagher was licensed to sell insurance. In 2013, a Travis County judge ordered Gallagher to repay investors $200,000 in a busted insurance deal.
His latest troubles began with a complaint forwarded to the Texas Department of Insurance.
TDI fraud investigators worked with the securities board, the U.S. Securities and Exchange Commission and the Dallas County district attorney’s office to bring the indictment.
Why not sooner?
Susan Pippi is angry that the securities board didn’t charge harder and sooner against Gallagher.
Regulators knew about him.
Indeed, the securities board actually refers to him — but not by name — in its Texas Investor Guide, which it offers free to all Texans. (Send an email request to email@example.com with your mailing address.)
In a section titled “Beware of Pundits,” the guide warns of “radio hosts who have broadcast in Texas [and] have promoted themselves as investment experts without disclosing regulatory problems that include suspensions, fines and dismissals from financial firms.”
The securities board confirmed that’s a reference to Gallagher.
I asked Robert Elder, the state security board’s spokesman, why Gallagher’s name wasn’t used in the book.
“The sanction against Gallagher was 18 years old at that point,” Elder said. “The message of that section of the book ... is to investigate before you invest. Don’t accept the word of someone you hear on the radio or at a free lunch or dinner seminar, or someone who appears to share your views in general.”
Is that person registered? Did you do a background check with the help of the securities board? Did you practice self-defense with your investment money?
In his book about squirreling money offshore, Gallagher interprets the Bible his own way.
He wrote, “It is very ethical to protect your money, so you can protect yourself and your loved ones. I like the practical and comprehensive reminder of the New Testament quote that says, ‘Love thy neighbor.’
He continued, “Is that what it says? No, it says, ‘Love your neighbor ... as yourself.’”
Hey Doc, The Watchdog throws a Bible phrase back at you — 1 John 3:18.
“Let us not love in word, neither in tongue; but in deed and in truth.”
Final note: What’s “Doc” Gallagher’s doctorate in? I checked. He earned a Ph.D. from Brown University in ... philosophy.