Multimillion-dollar Florida condominiums and life insurance policies, deathbed confessions, Latin American lawyers, allegations of a pension-skimming operation and even Louisiana oil wells are all knitted together, not in an Elmore Leonard novel, but a voluminous July 19th report on the receivership of promoter Jack Utsick and two of his business partners.
Michael I. Goldberg was appointed receiver of the companies by a federal court in Florida in January as part of a settlement between the U.S. Securities and Exchange Commission and Utsick, as well as partners Robert and Donna Yeager.
The SEC has accused Utsick, the Yeagers and their companies of defrauding some 3,000 investors of more than $300 million between 1998 and 2005.
The bulk of the 66-page report focuses on Utsick and
DiSalvo owned and operated a company called Group Benefit Specialists (GBS), where she also served as pension administrator. Donald Yeager told Goldberg that he and Utsick were looking for a means of facilitating IRA and 401(k) monies as investments in their companies, and he was introduced to DiSalvo by a mutual friend.
“Originally, DiSalvo, in her role as pension administrator with GBS, would receive referrals from Utsick and Yeager and she would arrange for those investors to forward their IRA accounts to her company’s account,” Goldberg reported. “She would then, at the direction of Utsick or Yeager, transfer the Investor Funds to either a Worldwide or The Entertainment Group Fund (TEGF) account, or to a limited liability company established by the Yeagers, in order to make investments in the [Utsick/Yeager companies].”
She later created ANPS as a successor company to GBS, and transferred all of the accounts and funds from GBS to ANPS.
However, the Yeagers informed Goldberg that they also suspected DiSalvo was skimming money when a pattern of conspicuous consumption, at a level far in excess of what her fees could generate, emerged including cars, jewelry and a Florida property she allegedly paid for with a $1.4 million personal check.
Sarah Simmons, a friend and employee of DiSalvo, informed the Yeagers that she had additional information of DiSalvo’s activities and is also cooperating with Goldberg, according to the report.
DiSalvo died in 2005. Simmons remained close to DiSalvo until her death. On her deathbed, DiSalvo asked Simmons “whether she would go to hell for what she had done,” according to Goldberg’s report.
Simmons also alleges in the report that she was concerned DiSalvo was embezzling funds from WE/TEGF and their investors.
On one occasion, Simmons completed a $3 million wire transfer when she overheard a phone call in which DiSalvo told Jennifer Homan, Utsick’s longtime girlfriend and WE employee, that she had just wired $5 million to the bank. DiSalvo allegedly requested that Homan send her loan agreements for $5 million of investments.
Goldberg is pursuing the allegations and filed complaints against DiSalvo’s heirs and estate in Southeast Florida U.S. District Court in June in hopes of recovering misappropriated funds and to obtain not only recovery but punitive damages.
Goldberg acknowledges the Yeagers’ level of cooperation, which he said is “significantly benefitting the receivership estate.” Also expected to be of benefit is the Yeagers’ investment in a Louisiana oil drilling venture. The receiver has retained geophysicists and other experts to ascertain if the operation could eventually make some money for creditors, and is apparently considering retaining the asset.
While many companies around the world were and are affiliated with Worldwide Entertainment, Goldberg stresses that, for the most part, the relationship between WE and those companies was that of investor only, not in a day-to-day capacity. Affiliated companies are not under scrutiny.
Since being appointed receiver, Goldberg has traveled to Australia, Berlin, Amsterdam, London, New Zealand, Las Vegas, California, New Orleans and other locales to meet with various WE business associates as part of his investigation of assets.
The report reveals that WE “essentially served as a bank to many of its affiliates providing the funding necessary for the affiliates to promote concerts and other live entertainment events,” the report said.
“Many of these affiliates are not profitable or viable without Worldwide continuing to fund their operations.”
Utsick’s business relationships appear to have been especially contentious with associates in Australia and New Zealand, resulting in lawsuits and threats of the same.
One of those business relationships gone sour was between WE and Australia’s Michael Chugg Entertainment (MCE), over an agreement to co-promote some shows.
When contacted for comment after the SEC’s April settlement announcement, Chugg told Pollstar his company’s project-to-project partnership with Utsick ended last year, and declined further comment.
However, in his report, Goldberg said WE invested “several million dollars” with MCE to co-promote events and “after a period of a couple of years, MCE reported that Worldwide’s investment was worthless.”
WE then had MCE’s books audited, according to the report, and found that MCE over-reported expenses, resulting “in Worldwide being shorted approximately $8,000 to $10,000 per show.” Chugg subsequently acknowledged that MCE owed WE approximately $2 million.
During a February meeting in Las Vegas, Chugg reportedly promised Goldberg a repayment of the obligation through funds generated by a summer Coldplay tour. Chugg also acknowledged that he had received some money from a new company, Worldwide Downunder Pty Ltd (WWDU), for use toward promoting the
Worldwide Downunder was formed October 12, 2005, in Sydney for the purpose of financing the tour, with a sole director by the name of Serge Bolzonello. The same day, according to Goldberg’s report, the company purportedly executed – the signature on the document is illegible, according to Goldberg – a Declaration of Trust that appears to acknowledge that a Costa Rica-based lawyer by the name of Diego Matamoros acquired 100 shares of the company.
In addition, between October 24-31, WWDU received a $3 million transfer. “However, the source of these funds is far from clear,” Goldberg said in his report. Another $2 million was transferred out of the account, “purportedly by Utsick upon Matamoros’ instructions,” to be spent toward a
Goldberg and Chugg have continued discussions on a repayment plan, however, and Goldberg indicates he expects an agreement to be finalized. “If such an arrangement is not concluded shortly,” Goldberg reports, “the Receiver will commence litigation against Chugg and MCE to collect this debt.”
Pollstar attempted to contact Chugg by e-mail for comment, but received an automated reply that the promoter was away from his Sydney office.
Back in the States, Goldberg has identified a number of WE enterprises as legitimate business activities and singles out the investments in Wuhlheide Amphitheater in Germany and
Also winning Goldberg’s praise are investments in Jack Utsick Presents N.E. (run by Sid Payne and Bill Rogers), Stone City Productions/Jack Utsick (Jack Orbin),
Goldberg is considering the sale of some assets, including the Keswick Theatre,
The report also details numerous concerns in which Utsick and his companies have invested, including “National Lampoon’s Pledge This,” a movie starring Paris Hilton that has experienced costly production and post-production delays, much of which Utsick had to eat.
Several of Utsick’s other non-concert-industry investments have been shuttered and others are being assessed for their viability.
Among those are a touring show based on Food Network’s TV show “Iron Chef,” a theatrical production based on the life of Frank Sinatra, theatrical projects including Rob Becker of “Defending the Caveman” fame, a touring version of Broadway’s “Little Women,” Michele Pommier Model Management and an associated promotion concept called “Fashion Rocks,” Marvana Day Spa in Boca Raton, Fla., Luna Restaurant on St. Bart’s and a recording label, Omega Records.
Goldberg is also looking to cut expenses literally where Utsick lives. The WE office that Utsick maintains in Miami’s Portofino Tower will be closed and sold. Eventually, the condo in which he currently resides, in the same building, is also expected to be sold. Both are valued in the millions.
With Utsick’s assets frozen, he has requested a $15,000 monthly “allowance” to cover living expenses, while Goldberg is offering $10,000.
Goldberg is also attempting to recover a $500,000 tax prepayment made to the IRS before he was appointed receiver.
Utsick reportedly carries seven term life insurance polices, with total death benefits valued at $54.2 million, and Goldberg indicated some of those may go on the block, as well.
– Deborah Speer