Council hopeful tried to sell her ad agency; now it’s looming over her campaign

Last fall, a little known company called Blume Media Group announced it was buying one of Long Beach’s homegrown advertising agencies, one with tight ties to City Hall.

In a recent four-year span, the agency, ETA Advertising, landed more than $1 million in city business. Its founder, Cindy Allen, a former Long Beach police officer, was in Mayor Robert Garcia’s wedding.

After ETA’s sale was announced, Allen said she was excited to leave her business in good hands and move on to the next phase of her life.

“I want to do something in public service,” Allen told a reporter.

Days later, Allen announced she was running for a seat on the Long Beach City Council, quickly snagging endorsements from Garcia, state Sen. Lena Gonzalez, the countywide Democratic Party and powerful local unions, including those representing police officers and firefighters.

But now, in the closing weeks of the campaign, Allen is finding herself answering questions not about her political agenda about a business she’d hoped to leave behind—along with potential criticisms that her agency’s city contracts would represent a conflict of interest for her as a council member.

The reason: The sale of Allen’s firm remains clouded in uncertainties. Blume Media Chief Executive Zachary Stroud acknowledges that he has failed to follow through on financial commitments and Allen says she may need to hire a lawyer to sort out the mess.

“We expected to have more funding for operations and that has not happened although I am working as hard as I can to make it happen despite challenges,” Stroud said.

Meanwhile, Blume Media’s facade as a global media company has crumbled under scrutiny from journalists who have found a series of red flags about Stroud, including fabricated executives, accusations of fraud and a slew of failed start-ups stretching back at least two decades. They range from web services to e-commerce to green technology ventures, according to records from the state of Georgia, where he incorporated most of them.

Candidate Cindy Allen for the 2nd District City Council seat during the Long Beach Post debate in Long Beach, Thursday, January 30, 2020. Photo by Thomas R. Cordova.

Although Allen has positioned herself as a savvy businesswoman, she now says she may have been duped by Stroud into believing he had the resources and know-how to take over her firm. Allen says she had no inkling of Stroud’s spotty past, despite talking with him for months about the deal.

“He talks a good game,” Allen said, but declined to provide details of the proposed deal with Blume Media, citing a confidentiality agreement.

For his part, Stroud says his only transgression in the affair has been to aim too high.

“I’m just a small-time entrepreneur with big aspirations but very big failures,” he said.

Separating fact from fiction

One thing Allen and Stroud agree on is how they came into contact with each other. Stroud responded to an online ad Allen placed to sell the firm she created in 2005.

After numerous discussions, Allen said she picked Stroud from several suitors, in part, because he produced financial documents showing he was in a good position to acquire ETA. He assured her he’d let the ETA staff—including Allen’s son—keep operating as a standalone business in Long Beach while he figured out how to integrate them into Blume Media’s larger live-streaming and video platform, according to Allen.

In a series of emails with the Long Beach Post, Stroud offered conflicting accounts of the sale. Initially, he said he tried to buy the business but never gained control of it, contradicting what Allen had told the Post. He later backtracked, saying the sale had been finalized—with some money being wired to Allen and employees being brought aboard—before his financial situation collapsed.

No matter the case, the public persona Stroud crafted doesn’t reflect a trace of those difficulties.

Like Stroud himself, Blume Media’s website projects a veneer of success, including a list of executives with resumes that include purported stints at other high-powered tech firms and media organizations.

A screenshot from a portion of Blume Media’s website that’s since been deleted.

But a reverse Google image search reveals that pictures of four listed executives were taken from stock images on the web. The photo of a man listed as the company’s chief financial officer, Jay Kennedy, can be found on Shutterstock, which supplies generic stock photos for websites. The photos of the three other executives can be found around the web under various names. None of the executives listed on the website can be found in Blume Media’s automated phone directory.

What’s more, sections of the website touting Blume Media’s video distribution network and advertising campaigns appear to be plagiarized, with nearly identical paragraphs published on websites for AT&T and Vice Media.

Before it was called Blume, Stroud was promoting his company as speaQ Media. Before that, it was Spoutbuzz. All three purported to provide services around advertising, live-streaming, video distribution and other vague tech-related platforms.

In 2017, Spoutbuzz was operating out of an high-rise office in midtown Atlanta where Stroud had talked his way into a sublease after providing questionable credentials, according to two sources who worked on the real estate transaction.

To secure the space, Stroud presented a letter showing that Spoutbuzz was backed by Google Ventures, the venture capital investment arm of Google, according to the sources.

“I’m not sure that it was a scam or he’s just a big dreamer,” one said.

Although Google Ventures denied ever backing Stroud or his companies, Stroud said he genuinely thought he had the tech giant’s blessing. “I put my faith and trust and hopes and dreams into financial people I thought were legit,” Stroud insisted.

Before signing the lease, Spoutbuzz was renamed speaQ Media and changed the name of its lease guarantor from Google to a company called Mason River Capital Partners, according to one of the sources who represented the tenant subleasing space to Stroud.

SpeaQ, the source said, bought signs for their space and had more than half a dozen employees working at the office.

But the company never paid rent, he said. SpeaQ employees were also left in the lurch, having been promised equity and stock instead of wages, he said. When sheriff’s deputies arrived to evict the company, the workers were already gone.

At one point in the early 2000s, Stroud was evicted from his own Atlanta-area home, according to court records and Muhammad Hillou, the owner of the real estate company that evicted him.

Hillou said the situation was puzzling. When Stroud vacated, he left behind a garage full of “nice furniture, some tables and chairs,” Hillou said. He thought if Stroud had just sold the items he would’ve been able to make the rent.

The next year, Georgia state records show Stroud incorporated Attic Loft, an online home decor company he bragged about in print. In 2004, he told the Atlanta Business Chronicle that he’d just received $50 million in funding from five unnamed firms in California.

But after that grand pronouncement, the company faded away. In 2008, the state of Georgia unilaterally dissolved Attic Loft after its required annual paperwork wasn’t filed—a fate that’s befallen several of Stroud’s ventures.

“Yes I am clearly a failure at building businesses,” Stroud said when asked about his seeming misrepresentations.

He went on to say he and others “might overstate our accomplishments to be competitive,” but it was necessary as a black entrepreneur who is sometimes dismissed because of his race.

“I haven’t always made the right decisions but what I am is a hard worker who works sometimes 13 hours a day, 6 days a week, a living grandfather, a cancer survivor, a military veteran and creative designer,” Stroud wrote.

ETA Advertising. Friday Feb.21, 2020. Photo by Thomas R. Cordova.

Stroud said he wanted to buy ETA to help him raise money for his other business ventures, including the streaming service Blume TV, which he recently launched on the Roku platform. After all his failed start-ups, he said he figured that buying into an existing business might help him along.

Now, Stroud said, he’s run out of funding, and cancer he’s battled in the past has recently reemerged, forcing him to step back from Blume Media and ETA.

“I wanted to buy Cindy’s business because I thought it’d be great for a creative guy like me to finally have a real team to work with and help me expand my business,” he said, “but as I mentioned, finances and health have struck again so once again I’m back to trying to keep it together.”

The candidate’s quandary

Despite the breadth of Stroud’s business troubles, Allen said she was in the dark until an article was published last week in the Beachcomber by Long Beach columnist Stephen Downing, a former Los Angeles Police Department deputy chief.

Beyond Stroud’s financial history, Downing also noted that the businessman had personal legal problems in his past that included a charge of bigamy, which Stroud attributes to a paperwork error.

Allen said she is now worried that Stroud is trying to siphon money out of ETA through his technical ownership of the agency, even though he admittedly has failed to meet the terms of their agreement. According to Allen, her son—who still works at ETA—has seen notices in the mail that Stroud is taking out loans against the company.

“I guess I have to figure out what my recourse is,” Allen said.

Meanwhile, day-to-day operations at ETA have been left to Adam Carrillo, the husband of one of Allen’s backers, state Sen. Lena Gonzalez. Carrillo was already an executive at ETA when Stroud struck the deal and now also has the title of executive vice president at Blume Media. He listed his Blume employment in contributing to Allen’s council campaign, keeping an arm’s length between Allen and the agency she founded.

Despite his leadership role at the company, Carrillo says he’s spoken only to Stroud and one other employee at Blume Media. “Currently I speak with Zachary as required,” he said.

Should ETA end up back in Allen’s hands, she said she’d have to find other buyers or, if that fails, shutter the company.

“At the end of the day, I just think the employees are out of a job and the business closes down,” she said. “I just don’t know what my options are. I really don’t.”

She knows the clock is ticking. The March 3 primary is less than two weeks away.

Staff writers Kelly Puente and Jason Ruiz contributed to this report.

Editor’s note: Cindy Allen owned the Long Beach Post until June 2018, when she sold the publication to Pacific Community Media. She has had no involvement since then.

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Jeremiah Dobruck is the breaking news editor for the Long Beach Post. He began his journalism career in 2007 as an intern at Palos Verdes Peninsula News and has worked for The Forum Newsgroup in New York City, the Daily Pilot and the Press-Telegram. He lives in Torrance with his wife, Lindsey, and their two young children.
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