Arizona Promoter Accused Of Fraud

An Arizona concert promoter and his partners are being sued by investors who claim they were conned out of money during the last two years that was supposed to be used to stage and promote concerts by top-name artists.

Civil lawsuits filed by 18 investors in Maricopa County Superior Court in May claim they loaned money to Mesa-based finance company TransCapital, its subsidiary Business Growth Advisors and promoter Miko Wady of Dezert Heat Entertainment to supposedly back nationwide concerts by artists such as Faith Hill, Tim McGraw and Mariah Carey.

The lawsuits claim the investors were to be repaid with substantial interest from ticket sales. The plaintiffs haven’t been repaid and allege the money was used elsewhere, according to the East Valley Tribune.

The suits also claim the promoters maintained the illusion by taking investors backstage, giving them concert memorabilia and entertaining investors at after-hours parties, the paper said.

The Cundiff family, owners of TransCapital, filed a separate lawsuit against Wady and Dezert Heat claiming Wady orchestrated the Ponzi-like scheme and that they and investors they brought in are owed about $35 million.

TransCapital President Jim Cundiff told the paper he took his son to see 50 Cent at Denver’s Pepsi Center in 2005, assuming the show was promoted by Dezert Heat. He later learned that Wady was a client of ticket broker Team One Entertainment.

"We understand how the investment groups could think at least initially how we could be involved, because they dealt with TransCapital," Robert Mitchell, who represents the Cundiffs, told the paper. "We have met with other groups, and after explaining the situation to them, they have agreed to let us try to lead the charge to recover what we can (from Dezert Heat)."

The Cundiff’s suit claims Wady conned them by providing fake contracts with artists and venues, insurance receipts and copies of certified checks for concert-related vendors to prove he was a promoter.

The family hired a former F.B.I. agent and former concert promoter to investigate Wady, who reportedly discovered the scam, after Wady stopped repaying TransCapital’s loans earlier this year, the Tribune said.

No hearings had been scheduled in the case at press time.