2.04.09
BY MICHAEL SALLAH
msallah@MiamiHerald.comThree years after his entertainment empire crumbled under debts and lawsuits, Miami concert promoter
Jack Utsick is under
FBI investigation for allegedly diverting millions from his investors to pay for collector cars, a luxury condo, artwork and other personal expenses.
Utsick -- once one of the world's largest concert promoters -- has been ordered to appear in federal court in Miami on Friday in a civil case filed by regulators trying to recover money they say he took from hundreds of investors who backed his concerts.
But Utsick, 65, who is now living in Brazil, has refused so far to obey two court orders to return to Miami.
Utsick, who promoted shows for
Elton John and the
Rolling Stones, could not be reached for comment. But documents in the federal civil case say he has requested immunity from arrest if he agrees to travel to Miami.
Lawyers for the
U.S Securities and Exchange Commission, which has seized his company, said they could not make those guarantees.
"All I can say at this point is that he hasn't shown up," said
Bob Levenson, trial counsel for the SEC.
Judy Orihuela, a spokeswoman for the FBI's Miami office, declined to comment.
The criminal investigation is the latest development in the government's ongoing case against the once-prominent entertainment guru, whose Worldwide Entertainment of Miami Beach consistently put on some of the largest concerts in the United States and Europe.
After disputes between Utsick and his partners, the SEC began an investigation four years ago into the firm's far-flung enterprises.
Initially, investigators determined Utsick and two former partners were selling unregistered securities to finance concerts featuring bands that include
Santana, the
Pretenders and
Aerosmith, according to court records.
Then, regulators said they discovered that Utsick was actually losing money on most venues, though he had been claiming to be earning millions of dollars each year -- $112.5 million in 2005.
"What we were seeing was a
Ponzi scheme," said receiver
Michael Goldberg, a lawyer [Akerman Senterfitt law firm] who has been tracking down assets for nearly three years.
Along the way, Utsick was tapping into his investors' funds to support a lavish lifestyle, including a condo in South Beach's
Portofino Towers, $34,000 for artwork, $200,000 for a yacht, and nearly $500,000 in credit card bills for purchases at
Macy's,
Bloomingdale's and
Victoria's Secret, according to SEC filings.
To keep the company going, Utsick was paying investors -- many of them former airline pilots -- from revenues of future concerts, court records state.
In all, the longtime promoter was accused of
fleecing investors out of $293 million, according to the government's lawsuit in 2006.
Goldberg said many of the investors knew Utsick from his days as a
TWA pilot in the 1970s.
"What's sad is that some of these people lost their life savings," Goldberg said. "They took money from their retirement accounts because they trusted him.''
In previous statements, Utsick blamed his financial problems on the rapid growth of his business and pledged to work to repay investors. But investors will more than likely realize only a return of "pennies on the dollar," said Goldberg, who is expected to soon disburse more than $21 million in a first round of reimbursements.
Court records show Utsick left his home in Miami Beach and moved to Brazil in late 2007.
Just days before he departed, he sold a
Porsche and a
Mercedes-Benz and pocketed the money -- a
violation of a court order, regulators said.
Despite two court orders to return to Miami in the government's civil case, Utsick has refused, court records state.
Utsick's attorney,
Richard Kraut, declined to comment on whether his client would return for the court hearing Friday before U.S. Judge
Paul Huck, who is expected to rule on a contempt motion.
Kraut has asked regulators to give assurances Utsick will not be arrested if he returns to Miami, but the SEC has declined to make any such promise.
Goldberg said he didn't believe the SEC could offer any such protection.
"There is no such provision under the SEC that even allows that,'' he said. "At this point, he's not cooperating with us."
2.06.09
