OutFoxed

If you loaned money to this former Fox News staffer -- and many did -- you may be out of luck.

On April 20, a number of people in the broadcast and public-relations fields received a succinct e-mail from Scott McDonald, managing editor of news for Channel 31: "I wanted to let you all know that I had made the decision to resign my position at KDVR Fox 31 in Denver. The decision comes for a variety of personal reasons."

But lurking behind these two benign sentences is a much more intriguing story -- one built upon murky motivations and questionable investments between McDonald and a surprising number of high-profile locals who may now be at risk of losing huge chunks of change.

The most prominent of these individuals -- self-proclaimed "troubleshooter" Tom Martino, who specializes in exposing scams on Channel 31 and a nationally syndicated radio show heard locally on KHOW -- isn't taking the passive approach to the potential loss of his investment with McDonald: a whopping $50,000. With the help of his lawyer, Jody Reuler, Martino has drafted a lawsuit naming both McDonald and his own station, which he feels bears some responsibility for allowing a management-level employee to brazenly lure co-workers into what he views as dubious financial schemes. "The attorneys I consulted said I really had to involve Fox since it was such a blatant example of workplace harassment and lack of supervision," Martino says. As a concession to the station, Martino is allowing Fox representatives to examine portions of the suit before it's been filed, but he says he'll officially place it before the courts by week's end unless he receives a satisfactory settlement. In addition, Denver District Attorney Bill Ritter confirms that an investigation has been initiated into McDonald's dealings.

A spokesman for Channel 31, noting that it's against station policy to publicly discuss personnel issues, refused to comment about the specifics of McDonald's departure, as did McDonald himself -- and a later call to Fox requesting a response to Martino's looming lawsuit went unreturned. However, McDonald was eager to weigh in regarding the suit -- "If Tom decides to file, that's his prerogative, but I don't think that involving Fox is productive or justified" -- as well as to talk in general terms about what he describes as "private business opportunities." Just as willing to chat were several people who say they loaned McDonald money or invested with him on losing or aborted propositions during the past year-plus, and more than a dozen others who confirm that McDonald approached them with similar offers that they rejected. Many of these people -- mostly staff members at either Channel 31 or Channel 9, where McDonald had previously worked, plus business types and public-relations pros with reputations for being smart and savvy -- are withholding their names, because they're embarrassed to find themselves in this situation.

Nevertheless, the anger and frustration felt by a number of these sources is mingled with genuine concern for McDonald, who's in his late twenties and universally described as bright and likable. Even Martino is only looking for his money back: His suit doesn't seek any punitive damages against either McDonald, whom he describes as a former supervisor, or Channel 31 -- unless, that is, he suffers additional injury to his status in the future. "My reputation could be tarnished as a result of this," he says. "It could seriously affect my credibility as a consumer advocate if people thought I'd fallen for something like this. Because we're not talking about lunch money.

"Maybe I was stupid," he admits, "but you've got to understand that this guy was my boss. He was somebody in authority who I worked with and who you assume had been checked out. If I'd met him anywhere else, he would never have gotten a dime from me. But he was presented as a young man with a lot of credentials -- as a newsroom leader."

McDonald, meanwhile, disputes Martino's characterization of his position at Fox: "I handled the logistics of the newsroom, but I had very minimal contact with Tom in regard to his stories." Moreover, he insists that there's nothing hinky in the deals, about which the media grapevine has been humming for weeks, and pledges that everyone who gave him cash will be reimbursed, with many set to receive a 10 percent fee above and beyond their investment to compensate them for their trouble. "Every person that was involved in any investment deal that I helped run made that decision willingly, after being provided with complete information on the deal itself," he says. "And I also made it clear to everyone that there was a risk involved. But I'm making Herculean efforts to repay people who are involved, sheerly to prove my good faith and to maintain my reputation."

In an effort to prove that these aren't merely empty promises, McDonald provided Westword with the names of two investors in a previous deal gone wrong -- an Internet radio operation that folded before it could go public -- who had gotten money back. But after supporting this portion of McDonald's story, the pair in question, both of whom gave McDonald comparatively small sums, noted that there remain several other investors in the defunct company who have not been repaid after well over a year. Furthermore, none of the investors in more recent transactions who spoke to Westword had received reimbursement by press time.

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