Friday, October 28, 2011

Disclosure? And their tangled web: Detroiter Michael Malik, the Jack Utsick Ponzi Scheme, Shinnecock & Bay Mills Indians, and Akerman Senterfitt

Michael J. Malik, Sr.
According to official lobbying records, during 2008 & 2009 the D.C. office of Akerman Senterfitt (Akerman) a legal/lobbying firm, registered as a lobbyist for the Bay Mills Indian Community but did not report any related income. At the same time Akerman also represented the Shinnecock Indians and was paid $230,000 for that work. Detroiter Michael J. Malik, Sr., or his affiliates pay all or part of the lobbying bills and manage the lobbying contracts for both Native American groups who are also his intended gambling partners. Should either tribe receive the necessary approvals, Malik affiliates have the exclusive rights to develop, manage and operate their respective gambling halls.

Simultaneously, Michael I. Goldberg, an Akerman attorney and "shareholder" in Florida, had been retained as the Receiver in a $300 million federal ponzi scheme case (SEC v. Utsick) against entertainment promoter John P. "Jack" Utsick, his Worldwide Entertainment Group and other parties. Utsick has reportedly taken asylum in Brazil and failed to appear during final court proceedings. 

Michael I. Golderg
In the matter of the ponzi scheme, Receiver Goldberg had brought a fraudulent transfer case in Florida federal court against Malik (Goldberg v. Malik , Jun 9, 2008) alleging Malik was involved in a $2.1 million fraudulent transfer.   

After the usual legal maneuvering, the Court received a Settlement Agreement (April 29, 2009) in which the Receiver, an attorney with and "shareholder" of Akerman whose associates had simultaneously represented the gambling interests of Malik and/or his affiliates, had revised down the amount of money alleged in the fraudulent transfer from $2.1 million to $620,000 and the parties agreed Malik would repay the Receivership $170,000 in-full within twelve months or be responsible for repaying the entire $620,000 minus any payments. It's not clear if Malik made good on the terms of the Settlement Agreement. 

By the terms of the negotiated Settlement Agreement, Goldberg agreed Malik, a guy who reportedly spent $300,000 on a Las Vegas wedding and paid $5.4 million for a Manhattan Penthouse both in early in 2010,  would repay just 8% of the funds Goldberg had originally alleged were fraudulently transferred.

It unclear whether Receiver Goldberg or the Court were aware of the following circumstances prior to entering into the Settlement Agreement: 
  • Michael J. Malik, Sr. (as Trustee under the Michael J. Malik Revocable Living Trust dated 5/13/98) and Jack Utsick (as President, The Entertainment Group Fund, Inc.) organized AB Funding Company, L.L.C., a Detroit-based enterprise, on March 10, 2000.  In court documents it was revealed the pair were introduced by Bruce Glatman.

It is also unclear whether or not Malik ever disclosed his relationships with Akerman associates in D.C.; Goldberg ever checked for conflicts; and/or if those details were ever disclosed to the Court:
  • From 2007-2011 Akerman has represented the Shinnecock Indians and the Shinnecock paid $510,000 to Akerman.  Akerman represented the Bay Mills Indians during 2008 & 2009 but there are no records that Akerman was compensated directly for that work. Malik or his affiliates either pay directly or funnel funds to other parties responsible for paying the lobbying bills for these Native American entities.  Should these parties get approvals to build casinos in the future, Malik affiliates have the exclusive rights to develop, manager and operate the gambling halls.

It is noted that since Malik and Goldberg entered into the Settlement Agreement, the Shinnecock have paid Akerman approximately $250,000 or nearly half of all the payments Akerman has received from Malik affiliates/partners; and Akerman terminated representation of the Bay Mills Indian Community.  Since the Shinnecock achieved Federal Recognition, Akerman has continued to be paid, at least $70,000.

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