Troubled concert promoter Jack Utsick is not only under the Security and Exchange Commission’s microscope these days, but also under that of the Miami Herald.
The Florida newspaper recently published a lengthy piece detailing Utsick’s rise and fall in the entertainment world.
It’s an interesting read, and Utsick’s story could be worthy of its own film treatment: ambitious dreamer from rural Pennsylvania rubs shoulders with the likes of
According to the Herald, only the “suddenly” part would be an exaggeration. The paper reports that the modus operandi that put Utsick in hot water is one he’s used since 1980 – the year he was first indicted.
The paper uncovered an item from the Portland, Maine, Press Herald detailing the case, in which Utsick allegedly took $25,000 from an investor to stage a concert on the promise that the deal would bring in a tidy 20 percent profit.
The indictment charged Utsick with exaggerating the size of his stake in the show, but the case was dismissed when a key witness failed to appear for trial.
Earlier this year, Utsick was charged with fleecing 3,300 investors of close to $300 million in what’s been described as a Ponzi scheme spanning from 1998 to 2005. His company, Worldwide Entertainment, is in court-ordered receivership and Utsick lives on a $10,000-per-month allowance while lawyers and accountants sort out his global financial and legal mess.
It’s quite a comedown for Utsick, who built an empire that just last year saw
But Utsick’s accounting system was shoddy, his international interests too far-flung to manage and his books a disaster waiting to happen, according to the Miami Herald.
“It was a mess,” receiver Michael Goldberg told the paper. “We’re going through the corporation’s records to figure out exactly where the money is.”
Utsick isn’t giving interviews but, through his attorney, blamed the financial quagmire on the explosive rate of his company’s expansion in recent years and pledged to pay back investors.
Attorney Michael Rosen of Miami also noted that Worldwide Entertainment is a legitimate business backed by theatres and arenas in Berlin; Philadelphia; Ybor City, Fla.; and Michigan plus a long portfolio of successful events.
“It’s important to note that Jack promoted many concerts and acquired many assets as promised,” Rosen told the Herald.
Utsick’s rise to the upper echelons of the business wasn’t meteoric nor was it without its share of drama, stumbles and legal wrist-slaps along the way.
The Herald reports that according to his entry in “Who’s Who in Entertainment,” Utsick graduated from Northampton College in 1968 with a bachelor’s of science degree after stints at the University of Miami and Moravian College in Bethlehem, Pa.
However, the newspaper confirmed only that Utsick attended Northampton Community College in Pennsylvania, which does not offer B.S. degrees, and he did not graduate.
After college, Utsick went on to train as a pilot and worked for TWA, flying members of the Saudi Arabian royal family from 1974 to 1977.
When he wasn’t flying the Saudi royals, he began promoting concerts on his off time from his home near Portland, Maine, and got pretty good at it, competing successfully with established promoters before his 1980 indictment.
With the dismissal, Utsick went into the business in earnest. The Miami newspaper cited another Press Herald account showing that Utsick made a presentation to town planners in Old Orchard Beach, Maine, to construct a 6,000-seat amphitheatre in 1983.
In 1985, Utsick took a chance on investing in a baldness treatment called Rixivil, containing minoxidil, that he reportedly discovered while traveling in Italy. According to the Miami Herald, he bought the rights to sell the product in the U.S. and sold it at $150 per unit under the name Riahom (Mo’Hair spelled backward).
That got the attention of pharma giant Upjohn, which marketed a similar product called Regaine (known as Rogaine in the U.S. and generically known as minoxidil). Upjohn promptly sued on the grounds of unfair trade practices. The company said Riahom was falsely touting Rixivil as a patented product and using Regaine in its advertising. A federal judge agreed – mandating a recall of Riahom and its promotional materials, ruining Utsick’s company.
By 1997, Utsick had rounded up a pool of investors – many of whom were also former pilots – to establish Worldwide Entertainment. Among them was Robert Yeager and his wife, Donna (who were included in the SEC action against Utsick).
Utsick and the Yeagers traveled the country, pitched to pilots’ associations and on their Web sites and newsletters, and paid finders fees to others who recruited new investors to another company, The Entertainment Group Fund. But by 1997, Wisconsin regulators discovered that TEGF’s agent was allegedly selling unregistered security without a license and, in what by then was becoming a familiar pattern, promissory notes for at least $10,000 with 10 percent interest.
Utsick’s fraternal relationship with pilots’ associations evidently worked in his favor then and, according to one of the 33 investors who sued Utsick earlier this year, still does.
“It gave him a certain air of credibility,” Gregg Mattson told the Herald. “He even did so well that he retired early – that was the air he projected. He seemed rather full of himself.”
Mattson acknowledged Utsick was confident and convincing, and after speaking to about 30 other investors, agreed to pony up his own money.
“No one had a bad word to say about the guy,” he told the paper. “After the first investment was repaid promptly, he rolled over his money.”
But in 2000, Michigan regulators came down on them for unlicensed brokering. Missouri regulators followed suit in 2004 for sales of unregistered securities.
In the Missouri case, Utsick allegedly convinced 30 investors to ante up $500,000 for a new arena in New Zealand and $2.1 million for a
Utsick’s problems began to quickly snowball and this January, Robert Yeager sued him, saying Worldwide owed him $10 million. Investors also sued him for $2.5 million and the SEC seized the company.
Goldberg reports he is tracking down WE and Utsick assets, as well as $10 million in investors’ IRAs and 401(k) monies that were allegedly pocketed by a third-party administrator. The receiver also told the Herald he has amassed a pool of $12 million to be repaid to investors.
He also reportedly hopes to split the remains of Utsick’s former empire into two companies: Fiestar, which will market and grow festivals, and Third Point, which will develop and market live entertainment.
In his most recent report, Goldberg predicted the effort could generate millions for investors.
Despite it all, Utsick’s defenders are loyal and insist he never stiffed performers.
“He always came through, he’s an honorable guy, a straight shooter,” Jim Camacho, the lead singer of local band The Game which was formerly managed by Utsick, told the Herald. “He’s definitely a dreamer. He thinks big, and he goes for it. His dream was to take a band to the top.”
His investors have dreams of their own, however.
“My personal gut feeling is we’ll be lucky to see 50 cents on the dollar,” Mattson told the paper. “I would not have ever invested with him if I had known the whole story. I hope he goes to prison.”