Utsick’s Next Gig: The Supremes?

Former Florida concert promoter Jack Utsick, now residing in Brazil, has lost his appeal of a U.S. District Court ruling ordering disgorgement of more than $4 million, prejudgment interest of $921,709 and a civil penalty of $120,000.

The judgment stems from a 2006 suit brought against him by the U.S. Securities and Exchange Commission in which Utsick was accused of masterminding a fraud that allegedly cost some 3,300 investors more than $300 million.

“We’re obviously very disappointed with the decision and Jack is considering his options, including a possible petition for review by the U.S. Supreme Court,” Utsick attorney Richard Kraut told Pollstar. “There are constitutional issues involved – whether or not he was denied effective assistance of counsel because the district court would not allow his companies in receivership to advance his legal expenses so he could mount a full and effective defense.”

However, it’s well established that seized assets or money considered “ill gotten gains” and held in receivership can not be advanced in order to pay a defendant’s legal fees. Utsick has admitted liability for investor losses, but neither admitted nor denied guilt of any possible alleged wrongdoing.

Utsick’s companies, Worldwide Entertainment and The Entertainment Group Fund among others, were placed in receivership and Utsick’s assets frozen as part of a settlement agreement with the SEC in 2006. Utsick took issue with some of the SEC findings, including the final judgment setting the dollar amounts, and appealed.

But before depositions on the appeal could be heard, Utsick decamped to Brazil apparently fearing arrest. Kraut has continued to represent expatriate Utsick from his Washington, D.C., office.

In affirming the U.S. District Court ruling, the 11th Circuit Court of Appeals noted in an April 9 filing that the lower court had attempted to accommodate Utsick’s requests for depositions to be taken in a third country, a protective order and payment of his expenses. Even though the court agreed to those accommodations, according to the appeals court ruling, he again failed to appear.

“The court attempted to accommodate Utsick by ‘requiring [the SEC] to pay his expenses for deposition in Miami, granting two months of extensions from the initial discovery period, fulfilling his requests to have the deposition taken in a third country, and entering a protective order that his counsel agreed would assuage his concerns regarding arrest,” the appellate ruling said. “Even so, Utsick failed to appear for his deposition.”

The final offer apparently was not enough to assuage those concerns. Kraut said the appeals court’s ruling was in error in part because it did not disclose that the SEC withdrew its offer to pay Utsick’s expenses in order to be deposed. He added that while the court agreed to a protective order preventing the SEC from disclosing the date, time and place of the deposition, it didn’t go far enough to guarantee that Utsick would not be detained by U.S. agents already in the undisclosed country.

“But going into the country that was involved, there’s absolutely no doubt that as he stepped off the plane that other U.S. authorities in that country would know that he was there,” Kraut said. “There just weren’t adequate protections.”

Kraut added that Utsick “continues to offer the receiver his assistance to help recoup as much money as possible for the investors.”

In the meantime, Kraut reports that Utsick remains hopeful of resurrecting his concert promotion business in Brazil. “Jack is not currently promoting; he’s trying to,” Kraut said. “He would obviously like to get back into this business because it’s his whole life.”