Sunday, January 18, 2009

April trial set in $2.1 million fraud case against Detroit casino syndicator

In Goldberg v. Malik, the $2.1 million fraudulent transfer case brought by Receiver Michael I. Goldberg against Detroit-based Michael J. Malik, Sr., U.S. District Court Judge Paul C. Huck has calendared a two-week trial to begin the week of 4.20.09 in Miami.

An Order setting civil jury and non-jury trial date and pretrial schedule, requiring mediation and referring certain motions to Magistrate Judge John O’Sullivan was filed 1.05.09 by Judge Huck. The motion reads:
Trial is scheduled to commence during the two-week period commencing Monday, April 20, 2009 before the Honorable Paul C. Huck, United States District Judge, 400 North Miami Ave, 13th Floor, Room 13-2, Miami, Florida. Calendar call shall be held on Wednesday, April 15, 2009 at 8:30 a.m. at the same location.

The Malik case is related to a $300 million fraud case brought by the Securities and Exchange Commission (SEC) against one-time entertainment mogul Jack Utsick, other business partners and their affiliates. The SEC alleges that Utisck was running a ponzi scheme to raise the capital he used to produce Broadway shows, concerts and other entertainment festivals and events.

It appears Utsick has taken asylum in Brazil and is battling court orders requiring his return to Miami.

Receiver Goldberg seeks to retrieve $2.1 million from Michael Malik which the Receiver alleges Malik received in the form of so-called "profit payments" funded through Utsick's ponzi scheme. (See: Original Malik Complaint)

As of 1.15.09, the Receiver has entered settlement agreements with 144 persons totaling $5.3 million. The Malik case isn't typical of these other cases as it seems to represent by far the largest sum sought by the Receiver from any individual.

Malik's Partners - Detroit's Ilitch Family

Since the mid-1990s, Malik has partnered with Detroit's Ilitch family (Mike Ilitch, Marian Ilitch and their seven adult children) on various casino development and real estate projects. His business offices are located at the headquarters of Ilitch Holdings, Inc.

The Ilitch family founded Little Caesars Pizza and owns, among other affiliates, the Detroit Tigers (MLB), Detroit Red Wings (NHL), Detroit's Fox Theater, Uptown Entertainment, Blue Line Distributing and MotorCity Casino.

The family owned Olympia Entertainment, a subsidiary of Ilitch Holdings, produces theatrical productions and music events and operates various theaters, concert halls, arenas and stadiums throughout Detroit including: the historic Fox Theatre, Cobo Arena, Joe Louis Arena, Comerica Park, Detroit's Masonic Temple Theatre, and the City Theatre. The Michigan Gaming Control Board (MGCB) recently granted a waiver to the Ilitch organization allowing Olympia Entertainment to manage theatrical and musical events at various venues within MotorCity Casino. (YouTube: Olympia Entertainment Video)

Royal Oak Music Theatre

For a period in the earlier part of this decade, Utsick affiliates had taken over management of the Royal Oak Music Theatre (ROMT) located in the Greater Detroit area. A former Olympia Entertainment executive producer, Greg Young, had joined Utsick's organization and was involved in the acquisition. Young is reportedly the owner/operator of ROMT and has a new partner, AEG Live (a subsidiary of Anschutz Entertainment Group). ROMT owed more than $400,000 to Utsick which Receiver Goldberg has sought to recover. Court documents and other reports suggest that Young brought in AEG as partner, in part, to help him pay off the debt owed to the Utsick affiliates.

Dana Warg, was hired as president of Olympia Entertainment in 2007. He was previously a vice president of AEG.

Oddly, documents of UCC Liens against Royal Oak Music Theatre and various affiliated organizations indicate the address for four of five affiliated debtor entities at 2211 Woodward Ave., Detroit, MI 48201. That's the headquarters of Ilitch Holdings, Inc.

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