Campaign finance disclosures suggest controversial casino syndicator employed by Ilitch Holdings, Inc.

A review of records on file with the Federal Elections Commission (FEC) indicate that Detroit casino syndicator Michael J. Malik, Sr. reports he was employed by Ilitch Holdings, Inc. despite repeated attempts by spokespersons to create the impression of an arms length distance between the often controversial Malik and the parent company of such household brands as Little Caesars Pizza, the Detroit Tigers baseball team and the Detroit Red Wings hockey franchise.

During the 2004 campaign season, official political finance reports were filed with the FEC indicating that Malik made contributions totaling $24,100 to sixteen different political committees; each reporting his employer as Ilitch Holdings, Inc.

Ilitch Holdings, Inc. is a privately held company controlled by members of the Ilitch Family. Patriarch Mike Ilitch is the chair of Ilitch Holdings, Inc. and his wife Marian Ilitch is reported as vice chair.

As the owner of MLB’s Detroit franchise, Mike Ilitch is prohibited from sharing any interest in gaming related ventures. But Marian Ilitch is sole owner of Detroit’s MotorCity Casino.

Marian Ilitch and Malik were original partners in MotorCity Casino; however, the Michigan Gaming Control Board (MGCB) wouldn’t grant Malik a gaming license and he was forced to divest his interests before the gambling hall could open its doors. Since then, Malik’s various business affiliates have headquartered out of the executive offices at Ilitch Holdings, Inc.

Suit alledges Ilitch partner involved in $2 million fraudulent money transfer

Michael I. Goldberg, a Ft. Lauderdale-based attorney at Akerman Senterfitt, is the court appointed receiver for entities known as Worldwide Entertainment Group.

As Receiver, Goldberg brought charges forward on 6.09.08 in Federal District Court (Goldberg v. Malik) alledging that Detroit casino syndicator Michael J. Malik, Sr. was involved in a $2.1 million fraudulent money transfer -- so-called "profit payments" -- that were funded through a classic Ponzi scheme.

The Receiver's complaint seeks Malik's return of the "profit payments" plus interest and other costs. It is one of numerous subsequent complaints stemming from an earlier Securities and Exchange Commission (SEC) investigation.

(Complaint: Fraudulent Money Transfers)

In April 2006, the SEC announced it had filed a civil injunctive action in the United States District Court for the Southern District of Florida charging Worldwide Entertainment, Inc. and Entertainment Group Fund, Inc. and their principal John P. (Jack) Utsick, and American Enterprises, Inc. and Entertainment Funds, Inc. and their principals Robert Yeager and Donna Yeager, in connection with a fraudulent offering that raised over $300 million from over 3,300 investors nationwide.

Malik was one of the original backers of Detroit's MotorCity Casino but couldn't get licensed by the Michigan Gaming Control Board (MGCB) so it was reported that he sold his shares to Mrs. Marian Ilitch in 1999 before the casino could open its doors.

Since then, Malik's numerous business affiliates have been based out of the executive office suite at Ilitch Holdings, Inc. Malik and Marian Ilitch have pursued other projects together including casinos in Hawaii, California, Michigan and New York.

The Detroit-based Ilitch family (Mike Ilitch, his wife Marian and their children) controls a privately held sports, entertainment and dining empire including the Detroit Tigers, Detroit Red Wings, Little Caesars Pizza and MotorCity Casino.

The Ilitch family also owns or manages some of Detroit's largest sports and concert venues including Joe Louis Arena, Comerica Park, the historic Fox Theater, the Masonic Temple Theater and Cobo Arena.

Michael Malik is suddenly entangled with the Akerman Senterfitt law firm

Michael I. Goldberg, a partner in the Ft. Lauderdale, FL, offices of the Akerman Senterfitt law firm, filed a federal Securities/Commodities/Exchanges suit in District Court (Broward County, FL) on 6.09.08 against Detroit casino syndicator Michael J. Malik, Sr. Goldberg's practice includes bankruptcy and ceditors' rights as well as securities receiverships.

Goldberg is the Court Appointed Receiver in the matter of the Securities and Exchange Commission (SEC) v. Utsick et al -- a $300 fraud case described as a ponzi scheme. And Goldberg v. Malik is one of the cases in which Receiver Goldberg seeks to recover money owed the Receivership Entities.

As it turns out, several Malik affiliates are clients of Akerman Senterfitt:

In June 2008, the Washington, D.C. office of Akerman Senterfitt registered as lobbyists for the Bay Mills Indian Community (a tribe Michael Malik has partnered with on casinos and other business ventures). The lobbyist is Joe Findaro.

On 7.12.08, Akerman Senterfitt filed an amended lobbying registration indicating that Blue Water Resorts, LLC, a Malik affiliate, was paying the Bay Mills tribe's lobbying bills.

Akerman Senterfitt has represented another of Malik's casino venture partners since July 2007, the Shinnecock Indian Nation. And on 7.21.08, Akerman Senterfitt filed an amended lobbying registration for this client as well; indicating Gateway Casino Resorts, LLC, another of Malik's affiliates, is paying this tribe's lobbying bills.

Michael Malik facing federal lawsuit in Florida involving Securities/Commodities/ Exchanges

Goldberg v. Malik

Plaintiff: Michael I. Goldberg
Defendant: Michael J. Malik, Sr.

Case Number: 0:2008cv60870
Filed: June 9, 2008

Court: Florida Southern District Court
Office: Fort Lauderdale Office [ Court Info ]
County: Broward
Presiding Judge: Judge William P. Dimitrouleas
Presiding Judge: Judge Paul C. Huck
Referring Judge: Magistrate Judge Robin S. Rosenbaum

Nature of Suit: Other Statutes - Securities/Commodities/Exchanges
Cause: 28:0754 Receiver of Property in Different Districts
Jurisdiction: Federal Question
Jury Demanded By: None

NOTE: Goldberg is a "shareholder" (partner) in the Ft. Lauderdale office of the Akerman Senterfitt law firm. His practice includes bankruptcy and creditors' rights.

MotorCity Casino realizes 1.57 percent after betting on $300M expansion

According to a review of monthly casino revenues published by the Michigan Gaming Control Board (MGCB), average monthly gaming revenue at MotorCity Casino for the 12 months prior to the June 2007 opening of MCC's expanded gaming floor were $39,641,650.62.

In the 12 months since MotorCity opened its bigger gaming floor -- and then opening its new hotel -- average monthly revenues for Marian Ilitch's casino have been $40,264,844.87.

Increasing the gaming floor by 25% -- and adding a 400-room hotel to the property -- MotorCity Casino Hotel has realized a 1.57% increase in its monthly gaming revenues.

Can that be what investors expected?

It's been reported that Marian Ilitch borrowed $1 billion or more in order to acquire MotorCity Casino from MGM Mirage and then complete the expansion of the gaming floor, add the hotel, and cover the costs of debt service during the construction.

When the MotorCity Casino construction project started it was announced the project would cost $275 millon and would be completed by the end of 2007. The expansion project is still not complete and the Detroit Free Press has published construction costs at $300 million -- almost 10% higher.

During the last two years Moody's and Standard & Poor's have both downgraded credit ratings for CCM Merger, Inc., MotorCity Casino's parent company, because the casino's debt ratios had grown higher than originally anticipated during the construction period.

Ilitch casino partner committed perjury failing to report political contributions

The casino partner of Detroit businesswoman Marian Ilitch filed fraudulent political campaign finance disclosures in California and failed to report numerous political contributions totaling more than $20,000.

In January 2007, Michael J. Malik, Sr., (Mike Malik) filed a campaign finance disclosure statement with California's Secretary of State as required of all "Major Donors" under state law. Malik represents in that statement, signed under penalty of perjury, that he made no political contributions in California during the second half of 2006. TVT has learned that's simply not true.

A review of other information on file with the Secretary of State reveals various political committees in California actually received more than $20,000 directly from Malik between 7.01.06 and 12.31.06.

Malik failed to disclose those contributions as required of "Major Donors" at various times during the 2006 election season. And then, as referenced above, Malik submitted a semi-annual "Major Donor" statement on 1.30.07 representing he had made no political contributions during the second half of 2006.

It would appear Malik committed perjury and possibly fraud in knowingly filing the false disclosure statement on 1.30.07.

Ilitch is the owner of Detroit's MotorCity Casino and co-owner 0f the Detroit Red Wings and Little Caesars Pizza. Her husband Mike Ilitch owns the Detroit Tigers. Marian Ilitch is vice chair of Ilitch Holdings, Inc. For more than a decade, she and Malik have partnered on various casino projects in California, Hawaii, Michigan and New York. While spokespersons indicate Malik is not an employee of Ilitch Holdings, Inc., or any of its affiliates, his business offices are located within the executive suite of offices at Ilitch Holdings.

California's Fair Political Practices Commission (FPPC) is reportedly investigating circumstances surrounding political contributions and lobbying payments made by Malik and other Ilitch/Malik affiliates. BarWest, LLC, an Ilitch/Malik casino affiliate, was fined in 2006 on two counts of violating California election law when they failed to report a $26,600 contribution made in 2004.

Michael Malik and lobbyists for various Ilitch/Malik casino related affiliates find themselves at the center of various well-publicized political scandals and investigations involving Rep. Don Young (R-AK), former Rep. Richard Pombo (R-CA) and others.

You may want to review these related posts:

• Political contributions made by Michael Malik link him to Sacramento-based lobbying firm Governmental Advocates, Inc.
• Michael Malik failed to report a $5000 contribution to the California Democratic Party
• Port Huron casino promoter fined for breaking California's political reform laws; denied a casino license in Michigan
• BarWest drops California Lobbyist Keith Olberg
• It appears the Big Lagoon Rancheria failed to file lobbying disclosures for 2nd Quarter 2007