10:28am PT by Eriq Gardner
Tea Party Television Network Founder Sued By Conservative Investors for $19 Million
Investors of a television network that purported to be the "world's first HD provider of news about the Tea Party" have filed a lawsuit claiming the television network was really "an investment scheme to defraud politically conservative-minded citizens who support the Tea Party mission."
The lawsuit was filed late last month in Tennessee federal court against Tea Party HD founder Anthony Loiacono.
According to the complaint, Tea Party HD was conceived in 2010, and Loiacono prepared an "Investment Brief" to lure potential investors.
Prospective backers were told that Loiacono had put up $60,000, but the lawsuit says he did no such thing. Nevertheless, upon promises that the new network would make nearly $19 million before the end of the third year, investors were offered "membership" and a percentage point of financial rights if they put up $35,000.
One initial backer, Bill Hemrick, put up $60,000. Another investor, James Huffnagle, contributed $70,000. Three other individuals chipped in $35,000 each, and a sixth man contributed $17,500. All six are now plaintiffs in this lawsuit.
Later, Loiacono asked for more investment money, telling his investors that the network website was getting 20 million visitors. The complaint says the number was "completely fabricated."
Loiacono purportedly took the funds to pay himself through a suspended California corporation, Heads & Tails, and his family members for TPHD projects that were allegedly just a "sham."
Meanwhile, the network is said to have stiffed its real creditors and let needed work go unfinished. For instance, the network failed to make timely tax payments and didn't pay its attorney nor its ad salesman owed compensation.
In early 2011, the network was dissolved, but nevertheless, it produced Michele Bachmann's response to President Barack Obama's State of the Union address. That production was ridiculed by many for Bachmann's intense gaze into the camera. It also stressed resources at the network and was the event that "plaintiffs began to realize the conflict of interest and self dealing in which Defendant Loiacono had been engaging."
The plaintiffs are now seeking to punish Loiacono for securities violation, conversion, and torts to the tune of $19 million, the amount of punitive damages the investors say they are owed for reckless and fraudulent conduct.
The Tea Party HD website is still live.
Loiacono couldn't be reached for comment, but sent a news release to The Tennessean challenging Hemrick to settle the lawsuit by facing off in a televised "lie detector challenge" in Nashville. According to the paper, "Loiacono proposed that, if he wins, the lawsuit be dropped and he be reimbursed for all his expenses."
Here's the complaint:
E-mail: [email protected]