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.

Proof that Ilitch Casinos Partner was in bed with Ponzi Scheme Fugitive Jack Utsick

If there was ever any doubt that Detroit casino wheeler dealer Michael J. Malik, Sr., was in business with fugitive Jack P. Utsick, the notorious entertainment promoter wanted for bilking "investors" out of millions, TVT has just discovered this:

Click Graphic to Enlarge or Click Here to See Original Document

On March 10, 2000 Malik and Utsick organized AB Funding Company, L.L.C., with the help of attorney William D. Serwer.  The Articles of Organization, Section V, as filed with the State of Michigan indicate:

The business of the limited liability company shall be manged by or under the authority of one or more managers. The initial number of managers shall be two (2).  This number may be modified from time to time by the provisions of the limited liability company's Operating Agreement that specify or otherwise fix the number of managers.

Directly under Section V, the Articles of Organization were signed by Michael J. Malik, Trustee of the Michael J. Malik Revocable Living Trust, and Jack P. Utsick, President of The Entertainment Group Fund, Inc.

For each and every year through 2007, Michael Malik, as manager of AB Funding Company, L.L.C., filed annual statements with the State ofMichigan.  While there have been no annual statements filed since, there have also been no other documents filed terminating the entity or removing Jack Utsick. 

The State of Michigan records AB Funding Company, L.L.C., as “Active, but not in Good Standing as of 2-16-2010.”

Utsick is now a fugitive reportedly living in Brazil.

Casino syndicator with history of illegal activity contributes $30k to Democratic Senatorial Campaign Committee

According to OpenSecrets.org, Detroit casino syndicator Michael J. Malik, Sr. contributed $30,400 to the Democratic Senatorial Campaign Committee on 6.19.09.

Previously such contributions by Malik and his casino gaming partners Mike and Marian Ilitch flowed to committees to re-elect Michigan Senators Debbie Stabenow and Carl Levin -- two who have spearheaded Congressional activity that would pave the way for Malik and his partners to develop an off-reservation Indian casino (Bay Mills Indian Community) in Port Huron, MI.

For more than a decade Malik has failed to win such Congressional approvals despite raising hundreds of thousands of dollars for those who have carried his water including Stabenow, Levin, Michigan Representative Candice Miller, Alaska's Representative Don Young and several others that have been key to Malik's schemes.

Malik and Ilitch are also behind similar off-reservation Indian casinos proposed in Barstow, CA (Los Coyotes Band of Cahuilla and Cupeno Indians) and Hampton Bays, NY (Shinnecock Indian Nation).

In December 2008, Malik was found guilty on firearms charges in Arizona. As a result he was forced to pay a nearly $15,000 fine and stripped of his right to hunt in a majority of U.S. states for a period of five years.

In February 2009, Malik was found to have violated California campaign finance laws and was also fined. Malik has a history of repeating such violations in California.

In April 2009, Fifth Third Bank filed a complaint in Oakland County (MI) Circuit Court claiming Malik had defaulted on a $1 million line of credit.

In May 2009, Malik entered into a settlement agreement in Florida Federal Court acknowledging that he had previously accepted at least $620,000 in fraudulent transfers (Goldberg v. Malik) as part of a Ponzi scheme. That case stemmed from a $300 million Ponzi scheme case brought by the Securities & Exchange Commission against Jack Utsick and others. Utsick has subsequently taken asylum in Brazil.

Ilitch partner enters settlement agreement in fraudulent transfers case

Michael J. Malik, Sr., has entered into a Settlement Agreement filed in Florida Federal Court in which a court appointed Receiver (Michael I. Goldberg) contends Malik received $620,000 in fraudulent transfers. Under terms of the Agreement, Malik has twelve months to repay the Receivership or face further penalty.

The case against Malik (Goldberg v. Malik) stems from a $300 million ponzi scheme case the SEC brought against one-time concert promoter John P. Utisck (Jack Utsick) and his affiliates including Worldwide Entertainment.

Court records indicate Bruce Glatman, believed to be a California resident, was the matchmaker who brought Malik together with then Florida-based Utsick. Utsick has since taken asylum in Brazil. It's not clear how Glatman came to know Malik or the scope of other dealings between Glatman and Malik.

Malik's primary business attorney William Serwer was also involved in the transactions that resulted in the fraudulent transfers.

Malik has been the gambling and casino development partner of Detroit's Marian Ilitch for more than a decade. They bankrolled efforts during the 1990s to legalize gambling in Detroit. She is now sole owner of Detroit's MotorCity Casino.

Mrs. Ilitch and her husband Mike Ilitch are co-founders of Little Caesar's Pizza and owners of the Detroit Red Wings hockey franchise. Mike Ilitch owns the Detroit Tigers baseball team.

AZ Game and Fish Commission denies appeal by Michael J. Malik

As TVT previously posted, Detroit-based Michael J. Malik, Sr., requested the Arizona Game and Fish Commission reconsider its December 2008 decision to suspend Malik's right to hunt, trap and fish in Arizona and more than 30 other states including Michigan for a period of five years and assess Malik with a $14,995 fine.

The Commission entertained and denied Malik's request at its 4.17.09 meeting. He apparently has a 30-day window to make an appeal to the Arizona Superior Court.

On 8.29.08, Arizona's Pinetop Justice Court found Malik guilty of discharging a firearm while stalking elk within the quarter-mile limit of occupied residences. (See: Michigan man found guilty on charge stemming from elk hunt).

That criminal conviction authorized the Commission to take civil action against Malik at its 12.05.08 meeting. (See: Michigan man assessed $14,995 for killing trophy elk near homes).

Malik reportedly has yet to pay the $14,995 civil fine assessed by the Commission in December 2008.

Malik is the gambling and casino development partner of Detroit's Marian Ilitch. She is sole owner of MotorCity Casino. Mrs. Ilitch and her husband Mike Ilitch are founders of Little Caesar's Pizza and owners of the Detroit Red Wings hockey franchise. Mike Ilitch owns the Detroit Tigers baseball team.


Malik's Growing Record of Illegal Activity

In 1999, the Michigan Gaming Control Board (MGCB) failed to grant Malik a gambling license and he was forced to divest himself of interest in Detroit's MotorCity Casino. Among other things, it was reported that Malik had been arrested in 1997 and accused of beating a girlfriend's 12-year-old son. He served a year of probation in the matter.

Since the MGCB denied Malik a license, he has developed a growing record of illegal activity:

• The criminal and civil actions in Arizona noted above related to Malik's illegal discharge of a firearm. He's been assessed multiple fines and stripped for the next five years of his right to hunt in 32 states.


• Malik has twice (2006 & 2009) been found guilty of, and fined for, violating California's political reform laws. Over the course of several election cycles, he's simply failed to report more than $52,000 in political contributions.


• Fifth Third Bank, a Michigan Banking Corporation filed a complaint in Oakland County Court on 4.03.09 (Fifth Third Bank v. Michael M. Malik, Sr.) alleging Malik was in Default on a $1 million line of credit that had come due on 9.01.08.


• In April, Malik entered into a Settlement Agreement (Goldberg v. Malik) with a court appointed Receiver who contends Malik received more than $620,00 in fraudulent transfers. Malik has twelve months to repay the funds as agreed. That action is related to a $300 million ponzi scheme case brought by the SEC against Worldwide Entertainment and promoter Jack Utsick who has since taken asylum in Brazil.

Is this known record of illegal activity a red flag that there's more?

CA FPPC finds Detroit casino syndicator Michael Malik violated campaign reform laws

As published in the Public Notice & Agenda for a 2.19.09 meeting of California's Fair Political Practices Commission (FPPC):

In the Matter of Michael J. Malik Sr., Michael J. Malik, Sr. Trust, and MJM Manistee, Inc., FPPC No. 07/195. Staff: Commission Counsel Angela Brereton. Respondents Michael J. Malik, Sr., Michael J. Malik Sr., Trust, and MJM Manistee, Inc. (collectively, “Respondent Committee”) jointly qualified as a single “major donor committee” under the Act for calendar year 2006. Respondent Committee filed a required semi-annual campaign statement but failed to disclose on the statement 17 contributions made during the reporting period totaling $26,500, in violation of Government Code sections 84200, subdivision (b), and 84211, subdivision (k)(5) (1 count). Total Proposed Penalty: $4,000. Order / Exhibit

This isn't the first time Malik has broken the law. Considers these incidents:

Malik is currently facing federal fraud charges in Florida (Goldberg v. Malik) relating to a Securities & Exchange Commission ponzi scheme case against one-time entertainment promotor Jack Utsick.

Last year, Malik was found guilty on illegal firearms related charges in Arizona.

In its 2.19.09 findings, the FPPC acknowledges that a casino affiliate of Mrs. Marian Ilitch and Malik, BarWest LLC, was found in 2006 to have violated the same CA campaign reform laws and Malik agreed to pay fines and file the appropriate disclosures in that matter.

Malik was once arrested for beating up the 12-year-old son of a girlfriend.

Ilitch partner violated campaign laws by failing to report casino related campaign contributions

In its first public action resulting from a nearly two year investigation into the campaign finance and lobbying practices of Detroit Casino developer Michael J. Malik, Sr., California’s Fair Political Practices Commission (FPPC) has found Malik violated state political campaign laws by falsely filing a campaign finance report in January 2007 that failed to disclose political contributions Malik made to 17 campaign committees and totaling $26,500 between the period July 1 – December 31, 2006.

Malik is the principal casino and development partner of Mrs. Marian Ilitch. She is the owner of Detroit’s MotorCity Casino. Ilitch and her husband Mike Ilitch are co-founders of Little Caesars Pizza and co-owners of the Detroit Red Wings. Her husband owns the Detroit Tigers. The parent company of their various affiliates is Detroit-based Ilitch Holdings, Inc. Marian Ilitch and Malik have formed various affiliates to pursue gambling opportunities across the U.S. including BarWest LLC, an entity pursuing casino resort development projects in Barstow, CA.

In its 2.19.09 decison, the FPPC notes this isn't the first time Malik has been involved in similar violations. In 2004, BarWest LLC failed to report a $26,600 contribution to a San Joaquin County GOP committee. In the Fall 2006, Malik acknowledged those violations, and paid a fine to the FPPC.

Malik is currently facing federal fraud charges in Florida (Goldberg v. Malik) related to a Securities and Exchange Commission ponzi scheme case against concert promoter Jack Utsick.

Public Notice & Agenda: FPPC Meeting 2.19.09

Press Release: FPPC Enforcement Decisions 2.19.09

Jack Utsick faces contempt in SEC ponzi scheme case that spawned Paris Hilton & Michael Malik, lawsuits

2.06.09

Ex-promoter faces contempt in Fla. SEC fraud case

By CURT ANDERSON

MIAMI (AP) — A once high-flying concert promoter of acts such as Aerosmith, Elton John and Shania Twain could face contempt charges for failing to show up in Miami for a Securities and Exchange Commission fraud case that has spawned a multimillion-dollar lawsuit against Paris Hilton.

The promoter, John Utsick, 66, now lives in Brazil and refuses to return to the U.S. out of fear he'll be arrested for possible criminal violations, his attorney Richard Kraut said at a hearing Friday. The SEC wants to take his deposition regarding assets he took from his former company, Worldwide Entertainment Inc.

"Mr. Utsick has created this issue. He decided to flee," SEC attorney Robert Levenson said at the hearing.

Kraut said Utsick isn't hiding, but he wouldn't divulge in court where he lives in Brazil. "He's not in the Amazon someplace," the lawyer said. "He's not dodging anything."

The deposition dispute is the latest twist in a case first brought by the SEC in 2006 claiming that Utsick fleeced some 3,000 investors out of nearly $300 million between 1998 and 2005. Utsick, whose company promoted tours and concerts by top rock and country music acts and other shows, allegedly created a Ponzi scheme in which he paid older investors out of money from new investors, while his business actually lost gobs of money.

U.S. District Judge Paul Huck previously found against Utsick and appointed a receiver to identify assets around the world intended to return some of the lost investments. That receiver, Michael Goldberg [Akerman Senterfitt], said he soon will send the first installment of as much as $25 million to be divided among investors, and eventually hopes to recover up to $60 million.

One of Utsick's yet-to-be sold former assets is a 17,500-seat amphitheater in Berlin, Germany. There's also sizable property in northern Florida, condos in the Miami area and six homes in California, Goldberg said.

The SEC wants to take Utsick's deposition to find assets he took personally and may still have. Kraut said Utsick's position is that as chief of the company he was entitled to the assets as a form of salary. Huck said he would give the two sides one more week to reach an agreement before deciding on the contempt issue.

"I don't have a lot of sympathy for Mr. Utsick. He's the one who put himself in this situation," Huck said.

The Hilton lawsuit stemmed from a 2006 film in which she appeared called "National Lampoon's Pledge This!" Utsick's old company, Worldwide Entertainment, invested in the movie and was an executive producer. Part of the deal was that Hilton was to pitch the movie on TV talk shows and media interviews, but Goldberg says that never happened.

"Hilton failed to attend any talk shows or telephonic or in-person interviews," the lawsuit says.

Goldberg said he is seeking about $7 million from Hilton and her management company, with trial in that case set for May 18. Ultimately any money recovered would go to Utsick's defrauded investors.

Hilton's lawyers contend that she fulfilled her main obligation to the film — publicity events at the Cannes Film Festival — and that there were only "vague and unspecific requests" that she do other appearances after it was released. At the time, they said, she couldn't do it because she was filming her reality TV show "The Simple Life."

"Defendants are not currently aware that the producers ever arranged any dates or agreements for Ms. Hilton to appear on any talk show," attorneys Michael Weinstein and Stephen J. Binhak said in court papers.

NOTE: this case also spawned a multimillion dollar fraudulent transfer lawsuit against Detroit casino syndicator and real estate developer Michael J. Malik, Sr., (Goldberg v. Malik) who is a longtime business partner with Mrs. Marian Ilitch. Ilitch Holdings, Inc. subsidiaries include Detroit Tigers (Comerica Park), Detroit Red Wings (Joe Louis Arena), Fox Theatre, MotorCity Casino, Olympia Entertainment, etc.

Ex-promoter faces contempt in SEC fraud case

2.06.09

MIAMI - A once high-flying concert promoter is facing contempt for failing to show up in Miami for a Securities and Exchange Commission fraud case.

A federal judge decided Friday to give 66-year-old John Utsick another week to give a deposition in the case. Utsick moved from Miami to Brazil in 2007.

The SEC claims that Utsick and others fleeced thousands of investors out of $300 million from 1998 to 2005.

Utsick once promoted shows around the world by acts ranging from Aerosmith to Elton John to Shania Twain. Utsick's lawyer says he won't come to the U.S. unless he is guaranteed he won't be arrested on possible criminal charges. SEC lawyers say they have no authority to make such a promise.

Criminal investigators examining ponzi scheme centered around concert promoter Jack Utsick

2.04.09

Fla. rock concert promoter in Ponzi probe

MIAMI, Feb. 4 (UPI) -- Criminal investigators have joined a financial probe of former Miami concert promoter Jack Utsick accused of cheating investors in a Ponzi scheme, sources say.

Utsick, 65, was once of the world's biggest rock concert promoters, staging shows by such music stars as Elton John, the Rolling Stones, Santana, the Pretenders and Aerosmith. But now officials allege Utsick, who is living in Brazil, has refused to obey two court orders to return to the United States in a civil lawsuit, The Miami Herald reported Wednesday.

The newspaper, without naming sources, said Utsick is also part of an FBI criminal investigation for allegedly diverting millions from his concert investors to pay for collector cars, a luxury condo, artwork and other personal expenses. The U.S Securities and Exchange Commission has seized Utsick's company, Worldwide Entertainment of Miami Beach, Fla.

"What we were seeing was a Ponzi scheme," plaintiffs' attorney Michael Goldberg told the Herald.

Court records indicate Utsick is accused paying investors -- many of them former airline pilots -- from revenues of future rock concerts.

Federal case against one-time concert promoter Jack Utsick now includes FBI investigation

2.04.09

Feds want promoter Jack Utsick in Miami for Ponzi case
Miami Beach concert promoter Jack Utsick has rejected court orders to return to Miami, where he is under investigation by the FBI for allegedly fleecing his investors out of millions.

BY MICHAEL SALLAH
msallah@MiamiHerald.com

Three 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."

Utsick Receiver recommends initial payouts to creditors

1.08.09

Goldberg Recommends Creditor Payouts In WWE Case

MIAMI (CelebrityAccess MediaWire) -- Creditors waiting for money from the resolution of Jack Utsick's Worldwide Entertainment may be starting to see a glimmer of light at the end of the tunnel after court appointed receiver Michael Goldberg's December 10th court filing.

The filing constituted a request for the court to authorize an initial disbursement to creditors with claims that have been reconciled as undisputed. This category covers 2727 of the 2,924 claims, leaving just 197 claims as disputed. All told, the claims total up to approximately $300 million.

The legal imbroglio surrounding Jack Utsick's Worldwide Entertainment began in 2006 when the Securities and Exchange Commission alleged that Utisck had been improperly traded in unregistered securities, and was in essence, operating a "ponzi" scheme along with several other violations.

At that time, the court appointed Michael Goldberg to act as a receiver as Worldwide Entertainment was unwound and the claims of creditors were evaluated. This latest filing signals that the court proceedings in the matter may be nearing completion, although Utsick and his legal team still dispute several of the allegations leveled by the SEC. - CelebrityAccess Staff Writers

Utsick fails to appear in Miami as ordered by Federal Judge; SEC Motions for Contempt and Final Judgement

One-time entertainment mogul Jack Utsick (John P. Utsick) has apparently failed to appear in Miami as ordered by Federa District Court Judge Paul C. Huck. That has prompted counsel for the Securities & Exchange Commission (SEC) to file Motion for Contempt and Final Judgement against Utisck.

Utsick who's been charged by the SEC with running a $300 million ponzi scheme used to finance Broadway productions, concerts and various other events and festivals, had been ordered to cooperate in Discovery and appear in Miami Federal Court to be deposed by the SEC sometime prior to 1.28.09.

Utsick claims to be residing in Brazil and unwilling and unable to travel to the U.S. although Judge Huck had ordered the SEC to cover reasonable travel expenses to bring Utsick back to Miami. Utsick has, in effect, taken asylum in Brazil.

The SEC originally brought charges against Utsick, Robert Yeager, Donna Yeager, Worldwide Entertainment, Inc., The Entertainment Group Fund, Inc., American Enterprises, Inc., and Entertainment Funds, Inc., in April 2006.

Michael I. Goldberg, the Court Appointed Receiver in the matter has filed action against scores of entities and individuals seeking to recover so-called "profit payments" and other debts owed to the Utsick, Worldwide Entertainment, etc. Among those from whom Receiver Goldberg has sought recovery: Paris Hilton, Australian Concert promoters Michael Chugg and Kevin Jacobsen, and Detroit casino syndicator Michael J. Malik, Sr.

Judge Huck orders Jack Utsick to return to Miami for SEC deposition no later than Jan. 28th

A Miami-based U.S. District Judge, Paul C. Huck, has ordered defendant Jack Utsick (John P. Utsick) to appear in Miami, Florida for a Deposition with attorneys representing the U.S. Securities and Exchange Commission (SEC) no later than 1.28.09. Judge Huck filed the order on 1.15.09.

Utsick has attempted to maintain asylum in Brazil where he claims he now lives. Among other things, Utsick represented that the expense of travel prohibited him from returning to the U.S.

Judge Huck ordered the SEC to pay reasonable travel expenses associated with Utsick's return to Miami. The Judge denied Utsick's attempts to win advances on legal expenses.

The SEC alleges that Utsick, a one-time entertainment mogul, was running what amounted to a $300 million ponzi scheme. This is allegedly how he received new capital to pay previous investors and produce theatrical productions, concerts and festivals around the world.

Judge Huck has also ordered all parties in the primary matter to complete Discovery by 1.28.09. But, then again, Judge Huck has attempted to compel discovery on several previous occassions.

Michael I. Goldberg, an attorney at the Akerman Senterfitt law firm, is the court appointed Receiver in the matter. Goldberg has filed numerous actions against individuals who are alleged to have received fraudlent "profit payments" from Utsick or whom otherwise were indebted to Utsick, Worldwide Entertainment Group or any of several other Utsick partners and affiliates. (See: Receivership's Web Site)

Among those who Goldberg has charged: Paris Hilton; two of Australia's top concert promoters Michael Chugg and Kevin Jacobsen; and Detroit-based casino syndicator Michael J. Malik, Sr., who has strong ties to the Ilitch family (Mike & Marian Ilitch) owners of Olympia Entertainment, Detroit Tigers (MLB), Detroit Red Wings (NHL), Detroit's Fox Theater and MotorCity Casino.

The Ilitch Family controls a significant number of Detroit's top theatrical, sports and concert venues including Cobo Arena, Fox Theatre, The City Theatre, Joe Louis Arena, Comerica Park, MotorCity's Sound Board Theatre and the Masonic Temple Theatre.

Utsick showbiz fraud, ponzi scheme case stretches to Australia

1.08.09

Million dollar rift over rip-off claims

By Ben Butler

Two top concert promoters misappropriated millions of dollars from shows including Robbie Williams and Coldplay tours and the hit musical Dirty Dancing, it has been alleged.

Veteran rock promoter Michael Chugg has agreed to pay $1.5 million to settle the stoush. And a separate claim against showbiz stalwart Kevin Jacobsen, worth up to $3 million, is ready to go to court in New South Wales next month.

The allegations against Mr Chugg and Mr Jacobsen follow the collapse of Worldwide Entertainment Group, run by Florida promoter Jack Utsick.

Worldwide, which funded shows put on in Australia by Mr Jacobsen and Mr Chugg, failed in 2006 amid allegations that the company had been a Ponzi scheme.

US authorities appointed receiver Michael Goldberg to collect the company's debts.

In a report filed with the Miami District Court in November 2007, Mr Goldberg alleged Worldwide had invested about $5 million in a partnership with Mr Chugg, "who proceeded to fraudulently divert much of the funds to his own use".

Mr Goldberg alleged Mr Chugg kept rebates from venues that should have been paid back to the partnership and had used Worldwide's money to invest in three un-named music festivals, two of which failed.

In a report filed in August, Mr Goldberg said Michael Chugg Entertainment had agreed to pay $1.5 million, made up of a downpayment of $500,000 and 15 monthly payments of $66,666.66.

Mr Chugg said yesterday a "disagreement about the proper interpretation of various agreements" had been amicably finalised.

Worldwide's separate claim against Mr Jacobsen has been before the NSW Supreme Court since 2005.

Settlement discussions are believed to be taking place, and a court is yet to rule on the allegations. The case is to return to court on February 13.

In an August 2005 judgment, Justice Clifford Einstein said Mr Jacobsen and companies associated with the promoter might owe Worldwide as much as $3 million.

Worldwide is not related to Geelong-based World Wide Entertainment.

WHAT IS A PONZI?

Ponzi schemes pay returns out of money received from new investors, rather than from real investments such as in shares or property.

To continue, a Ponzi scheme relies on ever-increasing numbers of new investors.

Eventually, not enough new investors can be found or the fraud is uncovered, and the scheme collapses.

Defendant withdraws motion to dismiss $2.1 million fraudulent transfer case

In Goldberg v. Malik, the $2.1 million fraudulent transfer case brought against Michael J. Malik, Sr., by a Florida court appointed Receiver Michael I. Goldberg, the Defendant Malik filed a Notice on 1.16.09 withdrawing his previous 1.02.09 Motion to Dismiss the case.

Malik had sought to have the case dismissed on administrative and procedural grounds. Among other things, Malik's attorneys argued the court had no jurisdiction over Malik, that Malik did not have any business relationship with any of the Receivership Entities, and that Malik, a resident of Michigan did not have any Florida business interests nor did he own any property in Florida.

According to Malik's attorneys, the Complaint against their client:

alleges that Defendant, Michael J. Malik, Sr. ("Mr. Malik"), invested in the business affairs of the Receivership Entities and ultimately received back more than he invested. The Receiver alleges that any "profits" that Mr. Malik earned are unlawful because, over time, the Receivership Entities became nothing more than a Ponzi scheme.

Goldberg v. Malik is one of dozens of cases related to a larger $300 million fraud case brought by the Securities and Exchange Commission (SEC) against one-time entertainment mogul Jack Utsick (John P. Utsick), his business partners and their affiliates. The SEC alleges Utsick was running a ponzi scheme used to produce Broadway shows, concerts and other entertainment events and festivals. Receiver Goldberg has also sued Paris Hilton as part of his recovery efforts.

With a value of $2.1 million, Goldberg's fraudulent transfer case against Malik is likely the most substantial recovery attempt he's made to date. Goldberg alleges Malik received so-called "profit payments" in addition to a return of his original investments and that the "profit payments" were funded via the ponzi scheme.

In an earlier court document Malik says he never received so-called "profit payments."

U.S. District Court Judge Paul C. Huck has set the trial for Malik's case to begin the week of 4.20.09 in Miami Federal Court. He has previously ordered parties to exchange documents in order to faciliate discovery and keep the case moving forward.

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.

$300 million SEC Fraud Case includes related actions against Paris Hilton and Michael Malik

8.15.08

Michael Goldberg v. Paris Hilton

MIAMI (CelebrityAccess MediaWire) -- Attorney Michael Goldberg, the receiver for Jack Utsick's Worldwide Entertainment has filed a lawsuit against heiress socialite Paris Hilton seeking recompensation for profits allegedly lost in a promotional contract for the 2006 film "National Lampoon’s Pledge This!"

According to the South Florida Business Journal, Goldberg filed the lawsuit as a part of his duties as receiver.

Hilton had been hired by one of Worldwide's subsidiaries, Entertainment Group Fund, at the sum of $1 million to promote the film that she also starred in. However Goldberg now contends that she didn't hold up her end of the bargain and is seeking in excess of $75,000 in compensation from Hilton.

In the lawsuit, filed in U.S. District court in Miami, Goldberg asserts that "Hilton failed to attend any talk shows or telephonic or in-person interviews."

Goldberg has been serving as the receiver for Jack Utsick's Worldwide Entertainment for two years after the SEC sued Utsick for fraud, finding that his entire company was in essence a ponzi scheme.

Hilton's attorney was unavailable for comment.

http://encore.celebrityaccess.com/index.php?encoreId=148&articleId=27584

NOTE: Receiver Goldberg has also gone after others whom he alleges unduly were awarded "profit payments" by various of the Receiver Entities. Among those, is Michael J. Malik, Sr. of Detroit whom Goldberg alleges received such fraudlent transfers of more than $2.1 million. Malik and his affiliates are partners with Marian Ilitch whose family owns Detroit's Fox Theatre; manages Detroit's Cobo Arena, Masonic Lodge Theatre, Comerica Park and Joe Louis Arena; and owns the Detroit Tigers, Detroit Red Wings, MotorCity Casino, Olympia Entertainment and Little Caesar Enterprises. Malik shares offices with other Ilitch Holdings Inc. executives in the Fox Theatre Building.

Goldberg v. Malik.

SEC v. John P. Utsick, Robert Yeager, Donna Yeager, Worldwide Entertainment, The Entertainment Group Fund Inc., et al

John P. Utsick, Robert Yeager, Donna Yeager, Worldwide Entertainment, Inc., The Entertainment Group Fund, Inc., American Enterprises, Inc., and Entertainment Funds, Inc.

On April 17, 2006, the SEC obtained permanent injunctions and other relief by consent against Worldwide Entertainment, Inc., Entertainment Group Fund, Inc., and their principal John P. ("Jack") Utsick, American Enterprises, Inc., Entertainment Funds, Inc., and their principals Robert Yeager and Donna Yeager. The SEC’s complaint alleged that from at least 1998 through late 2005, the defendants raised more than $300 million from over 3,300 investors nationwide in connection with their fraudulent sale of unregistered securities used to fund entertainment ventures produced and/or promoted by Utsick. For more information about the SEC’s action, you can read Litigation Release No. 19659 (Apr. 17, 2006).

On April 20, 2006, the Court appointed Michael I. Goldberg, Esq. as Receiver over the corporate defendants. For the latest information about the Receivership, you can visit the Receiver’s website.

http://www.sec.gov/divisions/enforce/claims/worldwideentertainment.htm

http://investor.gov/litigation/litreleases/2006/lr19659.htm

Among the other related cases brought by court appointed Receiver Michael I. Goldberg:

Goldberg v. Michael J. Malik, Sr.
Goldberg v. Paris Hilton et al

Defendant in SEC's alleged ponzi scheme case has taken asylum in Brazil

Concert/entertainment promoter John P. Utsick (Jack Utsick) is a Defendant in an alleged $300 million ponzi scheme fraud case filed by the Securities and Exchange Commission (SEC) in 2006. (SEC v. John P. Utsick, Worldwide Entertainment, et al).

The SEC wishes to seek a final judgement against Utsick but requires some discovery and his deposition. It appears that Utsick has fled the U.S. and is living in Brazil.

Utsick has confirmed that he had been based in Miami during the period of the alleged fraud. In recent months the SEC has sought to compel Utisck to appear for deposition. In his latest move, Utsick has submitted an affidavit in which he swears that since 11.29.07 he has made Brazil his primary home.

In email communications the SEC now reports Utsick is refusing to attend any court deposition in the U.S. including one set for 1.15.09; and Brazilian law prevents Utsick from being deposed by U.S. officials in that country.

Michael I. Goldberg is the court appointed receiver in the fraud case in which other defendants include Worldwide Entertainment, Inc. and Entertainment Group Fund, Inc. as well as American Enterprises, Inc. and Entertainment Funds, Inc. and their principals Robert Yeager and Donna Yeager.

(SEC: Enforcement Action Charges Entertainment Promoter Jack Utsick and Others in Connection With $300 Million Offering Fraud)

In a related $2.1 million fraudulent transfer matter, Goldberg v. Malik, Judge Paul C. Huck has set the dates for trial to begin 4.20.09 in a Miami U.S. District Court.

In this case, the Receiver Goldberg alleges that Defendant, Michael J. Malik, Sr., invested in the business affairs of the Receivership Entities and ultimately received back more than he invested. The Receiver alleges that any "profits" that Malik earned are unlawful because, over time, the Receivership Entities became nothing more than a ponzi scheme.

According to the original complaint, Receiver indicates specifically that The Entertainment Group Fund Inc. (TEGFI) paid Malik $2,100,669.90 in excess of Malik's original investment.

Malik has yet to deny the charges filed by Goldberg; rather, he's sought to have the case tossed out or delayed based on procedural or administrative causes.

In a related matter, Receiver Goldberg has also filed charges against Paris Hilton.

You may wish to review these related posts:

• Judge Huck orders Jack Utsick to return to Miami for SEC deposition no later than Jan. 28th
• Utsick showbiz fraud, ponzi scheme case stretches to Australia
• Defendant withdraws motion to dismiss $2.1 million fraudulent transfer case
• April trial set in $2.1 million fraud case against Detroit casino syndicator
• $300 million SEC Fraud Case includes related actions against Paris Hilton and Michael Malik
• Judge Huck denies Defendant Malik's Motion to Stay Discovery, orders exchange of documents yet again
• UCC Filing ties Malik, Ilitch headquarters to Royal Oak Theatre affiliates?
• Olympia Entertainment partners with new entertainment promoter
• Olympia Entertainment and World Wide Entertainment/Jack Utsick Presents
• Two with ties to Ilitch organization involved in $300 million fraud case
• Receiver says regardless, concert promoter was running a Bernie Madoff-like ponzi scheme
• SEC v. John P. Utsick, Robert Yeager, Donna Yeager, Worldwide Entertainment, The Entertainment Group Fund Inc., et al