The legality of the loan was investigated for several reasons, including the Boys and Girls Club being a charity organization and a conflict of interest as Evan Cohen was at the time chairman of both entities.
In July 2005, the Bronx News reported Gloria Wise Boys and Girls Clubs of Co-op City loaned $480,000 to Progress Media, then owner of Air America Radio.
On August 2, 2005, the New York Sun reported that the Gloria Wise executive committee estimated a total of $875,000 was transferred from the club to Progress Media as well as directly to Evan Cohen.
[1] As the organization received substantial funding from the City of New York at that time, the legality of the transfer went under criminal investigation by NY State Attorney General Eliot Spitzer.
[8] A report issued by the New York City Department of Investigation said it had uncovered evidence that director, Charles Rosen, allegedly collected another $69,000 from money "stolen from public agencies."
It also found that Gloria Wise's executives deliberately obstructed the DOI's investigation by "falsifying records, fabricating and back dating documents, and being untruthful in interviews.
[18] On September 8, 2005, Danny Goldberg, CEO of Air America, announced that the board of directors of the network's owner had accelerated its payment schedule and deposited the full $875,000 into the escrow account to settle the loan from the Gloria Wise Boys and Girls Club.
Goldberg stated that Al Franken's signature on the agreement between Piquant LLC and Evan Cohen "was simply to waive his own claims in order to facilitate the transaction and allow the network to survive under new ownership."