Thanks for telling your story. You can see from my blog (http://www.johnpgarcia.blogspot.com/) that John Garcia lied to the Los Angeles Times.

The Director of the Chapman University Leatherby Center for Entrepreneurship and Business Ethics, Dr. P.K. Shukla, confirmed to me last night that Garcia is not on this board.

It is normal for John Garcia to lie but he is usually a better liar. He usually lies about things that are hard to check out. At first I was upset to read this particular lie in the article but now I think it helps our case to expose him more clearly.

Most every word he said to the Los Angeles Times is a lie. At least by my definition. My mother taught me the difference between truth, fudging the truth and lies. She said that fudging the truth counts as a lie.

John Garica is usually fudging the truth or telling lies. I must say he is a better liar than Bill Clinton.

John Garcia is not on the advisory board of the Leatherby Center for Entrepreneurship and Business Ethics at Chapman University. P. K. Shukla, Director of the Leatherby Center for Entrepreneurship and Business Ethics, shukla@chapman.edu, (714) 997-6817

FP: The Los Angeles Times printed this clarification: "An article in Sunday's Business section about complaints against John Garcia and his company, Angel Strategies, said he serves on the advisory board of Chapman University's Leatherby Center for Entrepreneurship and Business Ethics. Garcia served on the board in 2002. The board became inactive in 2003 and has since been disbanded."

(Frank: I was copied on this email)
Geo-

As I think you and I have discussed in the past, Angel Strategies walks with the bad guys. "Consultants" that attempt to help build businesses by making promises to entrepreneurs that they ultimately cannot keep, have created a bad name for the for-profit, entrepreneur-services segment. I have been approached by many who want to enter this arena and have explained that they are choosing to enter a field dominated by shady characters and will ultimate be tainted by that brush.

How do I know? Firsthand experience is a great teacher. Bill Botts (as an entrepreneur) and I (as one of Bill's investors) encountered just such a guy in San Diego in the late '90s. He was so popular locally that he had his own radio program. But, he was an incommunicative, unethical, incapable flake. $20K later (I think) we walked away, sadder but wiser.

I don't know enough about Angel Strategies to make a judgment, but the stories told in this article are typical of how these guys work. Promise the world for upfront fees and a piece of the action and then deliver nothing useful.

For me, the saddest part of the story linked to below is the fact that 'Angel' Strategies is now tainting angel investing, simply by incorporating the word "angel" in their name.

Frank, let's set the record straight. I did not know you were an investor in Otra Beer until many months later. I did not solicit you to make an investment. (FP: When I expressed interest you delegated this to Elliot Reiff.)

I invited you to a fun night on the Queen Mary, not as a potential investor. I didn't even know you were a potential investor as I had not heard of you making any investments previously. (FP: I introduced myself to the group as President of Tech Coast Angels in Orange County.)

Regarding your attempt to take over as Chairman of OC Innovation. I saw this attempt as one of complete self promotion on your part and your attempt to use that organization for your own benefit. Isn't that where the Frank Peter's show got started? Wasn't I your first interview? (FP: Yes) Didn't the fine group at OC Innovation give you the first names of OC icons to interview? You were new to town and needed "contacts". (FP: I have lived in southern California since 1974.)

We all thought it odd that once you left the board you took the pod cast show and called it your own. If you review the OC Innovation board minutes you will read that several times I reiterated to all involved that no one person should be get any personal gain from their association with the board. You clearly have benefited and to date I believe you are the only one that has. (FP: I left the OCI podcast show website and all content with the organization then began a new show with a new name focusing on different issues on a new site.)

It took no amount of "charm" on my part to convince the board to vote against your petition. Do you recall that you did not get a single vote and that you resigned on the spot. I still have your resignation on a napkin which you gave me as you abruptly left the board meeting. Why you bring this up and now include OC Innovation in this shows your lack of respect for that fine group which I co founded and you joined only after the organization was getting some real traction. Sounds a little bit now like your involvement at the Digital Media Center in Santa Ana which I helped get started as well. (FP: other than being a guest speaker one time 2 years ago I have no involvement with the DMC.)

Regarding the Chapman Leatherby advisory board. I have not had a single contact with Chapman for several years after I ended my term as a member of the Board of Governors. It may be that the Leatherby Center staff has not removed my name from their lists but I do not at this time feel I have a relationship with Chapman.

Frank, I respect your intellect and your ability to network. I would respect you immensely if you posted this on your blog which sets the record straight.

In response to John Garcia's comments... His posting hardly sets a record straight. The Los Angeles Times got a few things correct but the reporter missed the whole point of the story that I gave her.

While she was trying to warn entrepreneurs not to enter into contracts with people like John Garcia she failed to say that each of us who hired John Garcia or those who have invested in Angel Strategies were entrapped by John Garcia's fraud.

We all hired John Garcia, or invested in him, because we believed the lies he told us. The lies are on the video here. Just a few of the lies we all heard were that Garcia had 226 investors who put in $l million a year for ten years and that included himself. He lied when he said that those 226 investors earned 12xs their investment each and every year. He lied when he said he has 126 companies in his portfolio. He lied when he said he doesn't let companies fail. He legacy web site was a lie as he used the names and excellent bios of others who want nothing to do with him to prop up his scam. And on and on the lies go.

Did John P. Garcia have a willful intent to defraud?

I am not a lawyer, but I believe the issue at hand with John P. Garcia of Angel Strategies is if he has had a willful intent to defraud. Of all the investment dollars that he ever collected from clients, how much was actually invested? Of all his lies, which of them were used to entrap people to employ him as a consultant?

Certainly a court should be able to get to Garcia's records and see how many investment dollars he actually collected, how much he invested, and what he did with the remainder. That will tell one of the stories about his intent.

In a quite ironic fashion, the other side of the story is told for the records by Garcia himself. He reveals his entire entrapment scheme -- it was recorded in December 2008 in Malmo, Sweden* -- where he actually entraps himself. The tragedy is that I think he really believes his statements are true.

The fact is that very few of them are true.

You will see how compelling he can be. He is a good salesman. He has the gift of the pitch. Certainly he has learned a lot. Certainly he can be quite compelling. The fact is, his cornerstone and foundations are filled with lies.

The five key lies that he makes in this Malmo presentation are:

On investments: "There are 226 investors who put in $1 million per year, including myself. Those investors have seen a return of twelve times their investment each and every year."

The $226 million is what we have to invest every year into the economy.

"As a result we've been averaging 12 times our money."

On investment results: "We currently have about 30 companies in the portfolio. Some are ready to flip and that means they will sell for many millions."

On commitment: "The money that we use is money from our own pockets as well as capital from our friends and losing is not an option. We refuse to lose money."

On operating style: "We are extremely hands-on. If we cannot be involved in the companies we will not invest. If we can't open doors for you, we will not invest. If we don't know who's going to buy you down the road, we won't invest. If we don't think that you're thinking the right way, we won't invest. If we don't believe your family is with you, we won't invest."

On his group's results: "I will tell you that we have out-scored every other angel and venture fund in the United States and maybe in the world. We have never disclosed these numbers until last year as we started to break off with a new venture fund under the name of Innovateur."

Certainly if these statements were true, wouldn't you want to be associated with such a performer? Unfortunately, the curtain was pulled back in January 2009. Not one of these statements has been validated as truth. If any of us knew that these statements were fabrications, we would never have invested and we would never have hired this person as a consultant.

Over the months, he has made many other claims to us and other people; and upon discovery these, too, have been found to be total fabrications.

The tragedy is that we all wanted John Garcia's stories to be true. We wanted to be in the same room with somebody who has had that kind of unusual success. Yet, John Garcia's primary success has been in gaining people's trust based on lies, then with just about perfect timing, asking for the investment participation.

Ten years from now, we'll look back and not believe how we were snookered. Today it just feels like bad, it smells bad, it looks bad, so we conclude it must be bad.

To learn more about our very positive mission in life, you are most welcomed to come to our website at http://search.smallbusinessschool.org where this story will eventually become a case study. Thank you.

-Bruce Camber, CEO and founder, Small Business School

* This link: http://tinyurl.com/JohnGarciaLies is a popup window that will take you to http://www.youtube.com/watch?v=zlkhNZNomwU

John Garcia's comments are not related to the issue of those claims he's made in that video but to a personal feud with Frank. It looks to me like John Garcia just wrote 3 paragraphs of addressing any bitterness he thinks Frank has while dodging, or just not acknowledging, the claims he has made.

Also, with a website like www.angelstrategies.com , you have to wonder how a fund of 200+million or whatever that site is supposed to be dedicated to, looks like it was made in 30 minutes by a high school student taking web design class.

That is a sweet looking office building though, looks like you bought it from Bear Stearns.

Recent guest on the show, George Lipper, forwarded this link to Martin Zwilling's blog: Entrepreneurs: Avoid Fallen Angels

John Garcia had no involvement in the start-up or the continuing operations of the Digital Media Center in Santa Ana. Above John states, "Sounds a little bit now like your involvement at the Digital Media Center in Santa Ana which I helped get started as well."

John had no involvement in "getting" the Digital Media Center in Santa Ana started. He was invited to be on the board of advisors after the project was near completion in construction (circa 2004). He showed up for one free lunch meeting. And that was the only thing Garcia did on that project.

Let me set the record straight. I started the Digital Media Center. I am Jill Dominguez formerly of WRJ Group, Inc. I brought the original concept and $1.5 million EDA grant to Orange County. The entire project was built around that concept and those grant funds. We ended up in Santa Ana after Rancho Santiago Community College District expressed interest in the project when Tom Fuentes the Chairman of the South Orange County Community College District referred to the program as "corporate welfare" and voted down accepting the grant for the Tustin Airbase campus called ATEP (2000).

From that point on until now John has never shown up at a meeting for the advisory board. Recently the DMC Advisory Board asked that his name be removed from any collateral material left over from early material still being used at the DMC.

And that is the final word.

Frank - I just wanted to reiterate the substance of my conversation with you over coffee yesterday. I apologized for my failure to connect subsequent to OTRA running out of cash. I did make a number of calls but never connected and lost the thread.

Like many companies seeking Angel level investments, OTRA required a continuing cash infusion to support the burn and sufficient cash was not raised to get it over the hump.

According to the upcoming Growth Capital Conference, paying John Garcia, or another "deal maker" as they call it, is a legitimate and worthwhile pursuit, in fact meeting John Garcia and other such deal makers is touted as a reason to attend the conference.

As I was reading this article I was wondering why this is news. I didn't read anything that hasn't been going on for many years. People that charge entrepreneurs up front but never deliver are dime a dozen. Some legitimate VCs and Angels have also participated in such endeavors. Other schemes include expos, conferences, and contests that charge hundreds or thousands of dollars. They promise face-time with important VCs, but sometimes a check on the VCs website reveals that their current fund is completely committed or they are not interested in your type of venture even though the advertising for the event says they are. Brokers whose fee includes a percentage of the company have been around since the dotcom heyday. There are also numerous websites that promise to connect the entrepreneur with qualified potential investors. Even law firms and accounting companies promise connections to investors. There is no shortage of people making such promises.

The way the industry conducts itself not only leads to the lack of successful exits over the last ten years but also contributes to the hype that helps legitimize these con artists. VCs and Angels hype themselves just as much, if not more, than they hype their investments. They may claim their advice, and connections are more important than the investment opportunity.

Another example of Angel hype is when TCA calls its fast pitch competitions must attend events but later admits that they have no investment goals. They say you'll see 12 outstanding investment opportunities, but they end up including hair extensions and other opportunities without exit potential. I've recently received another email from TCA encouraging me to attend the Growth Capital Conference in which John Garcia mentioned in this article is a guest speaker. The GCC event claims billions of dollars are available so I should attend. It is obvious to me that attending just puts a target on my forehead for the many guest speakers that are actually interested in selling me their services. There is no prequalification of investors or entrepreneurs to see if they are a match, its just every man for himself. Somehow I don't think the VCs will be sitting on pins and needles to hear the talks from most of the guest speakers. The topics are not even posted.

All this hype just makes it easy for the con artists. When we think about large companies that develop new products, somehow we don't envision them entertaining a bunch of hype.

But Angels measure their success by the number of people who attend and not by the number of successful exits.

John Garcia also screwed POW! Entertainment and Stan Lee