Dan Bilzerian’s company and father face criminal charges
Federal prosecutors announced criminal charges against a company founded by Las Vegas celebrity Dan Bilzerian, and against his father, alleging the elder Bilzerian “funneled” money to his son’s business while owing judgments that now surpass $180 million.
A federal grand jury returned a nine-count indictment last week against Ignite International Brands Ltd., Paul Bilzerian and Ignite executive Scott Rohleder on charges including conspiracy to defraud the United States and wire fraud. According to prosecutors, the defendants conspired to thwart securities regulators from collecting on judgments against the elder Bilzerian, a former Wall Street investor.
Dan Bilzerian, a social media star with more than 31 million followers on Instagram, is not a defendant in the case and was not accused of any wrongdoing. He was identified in prosecutors’ news release about the case, and in the indictment, by his initials “D.B.”
His Las Vegas mansion is also mentioned as prosecutors alleged Rohleder falsely characterized the 5-acre compound on Patrick Lane near Jones Boulevard as a rental property in the younger Bilzerian’s tax returns.
The indictment also alludes to Paul Bilzerian’s recent comments to a Las Vegas Review-Journal reporter, in which he said he never owned or controlled an entity that prosecutors say he used to funnel money to his son’s business.
“This indictment alleges a long-running pattern of criminal behavior to avoid a regulator’s judgment, mislead investors, and cheat the IRS,” Martin Estrada, U.S. attorney in Los Angeles, said in a news release Friday.
Paul Bilzerian, who lives on the Caribbean island of St. Kitts, did not respond to requests for comment Monday.
The U.S. attorney’s office in Los Angeles said it had no comment on whether the government was trying to extradite him.
Rohleder was arrested Friday, prosecutors said.
Rohleder’s attorney, Elliot Abrams of Cheshire Parker Schneider PLLC in North Carolina, said, “We look forward to responding to these allegations in court.”
Ignite executives did not respond to a request for comment.
‘De facto control’
Famous for being famous, Dan Bilzerian portrays himself online as a wealthy, successful jet-setter who is always surrounded by beautiful women, fires heavy guns and flies in private aircraft. His business interests include Ignite International Brands, which sells liquor, apparel and other products.
Dan Bilzerian was Ignite’s chairman and CEO, but according to prosecutors, his father had “de facto control” of the business. With Rohleder, the elder Bilzerian oversaw Ignite’s operations, strategy, marketing and fundraising, the U.S. attorney’s office said.
The Securities and Exchange Commission also filed a civil complaint last week against Ignite, Paul Bilzerian, Rohleder and others, alleging the company fraudulently reported revenue.
Dan Bilzerian was also not a defendant in that case or accused of any wrongdoing by the SEC.
Known for corporate takeover bids, Paul Bilzerian was convicted of securities fraud in 1989. He was sentenced to four years in prison and served 13 months, according to The Wall Street Journal, which reported in 2014 that he was living in a condo on St. Kitts.
The SEC obtained more than $62 million in civil judgments against him in 1993 but has recovered only about $547,000. With interest, the judgments now surpass $180 million, prosecutors said last week.
Paul Bilzerian operated numerous shell companies, including International Investments Ltd., while concealing his interest in and control over them, according to prosecutors.
He was not the official owner of International Investments. But the entity operated at his direction and for his benefit, and he pumped millions of dollars through that company and others to Ignite, the 21-page indictment alleged.
‘Email to a journalist’
The Review-Journal recently reported that Blitz NV, a holding company owned by Dan Bilzerian, filed for bankruptcy last year. The company stated in court papers that its largest creditor was International Investments Ltd., of St. Kitts, which had loaned $3.9 million to Blitz.
Blitz sought court approval to borrow more money from International Investments, saying in court papers that without the additional funds, it would potentially face “administrative insolvency followed by a liquidation.”
It did not reveal in that filing who was behind International Investments.
According to court papers filed in the case by Steel Supplements, a company that previously sued Blitz, the lender was associated with Paul Bilzerian. Steel later said the entity was affiliated with Bilzerian’s mother and perhaps his father.
Paul Bilzerian’s email address includes International Investments’ name, and his mailing address is the same as International Investments, down to the same P.O. Box number, the Review-Journal found.
Reached by email a few weeks ago, Paul Bilzerian told the Review-Journal that he has never owned shares in, or controlled, International Investments.
The newspaper published its story about Blitz’s bankruptcy case on Sept. 19.
The federal indictment against Paul Bilzerian states that, on a date before Sept. 19, he “wrote in an email to a journalist that he had never owned shares in, or controlled, International Investments.”
Indictment by Las Vegas Review-Journal on Scribd
Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342.