Monday, November 1, 2010

Follow The Money: The Power & Politics Behind The UFC-Owning Fertitta Family

By: Rich Bergeron

Follow the money. It's a piece of advice many criminal and private investigators are taught as trainees. Once they graduate and get out into the field, they're reminded of the importance of that lesson nearly every day.

Money is the root of all evil to some people, but seemingly not enough when you look at the sad state of affairs in our materialistic world. Greed is a curse on society, and those overcome and driven by it will often take all they can any way they can get it. Corruption and conspiracy couldn't thrive without huge pools of unaccounted-for currency getting lost in the mix. It doesn't matter if it's your money or the next guy's, someone's always getting screwed because the worst scams are kept secret so the right people can profit while the little people always seem to lose the most. From Charles Ponzi to Bernie Madoff, the sophistication levels may have changed, but the core principles of the schemes never have and never will.

Consider the international financial picture. Forget Swiss banks. The Cayman Islands are small potatoes in the global banking power structure. The banking institutions where criminals exclusively keep and/or launder their money are only part of the problem. A worse disaster is wrapped up in the banks and businesses the "black-ops" and "spook" funds are kept for countries all over the world. Hiding money becomes a matter of national security and discretionary spending goes out the window in pursuit of global domination. HERE'S PROOF.

Each time a small scam artist pulls off a minor success, the chances of that criminal's operation growing larger increase exponentially. Scammers grow like weeds in the garden of capitalism. They sprout and grow incessantly, and there isn't enough Round-Up in the universe to exterminate them all. Too many of these small time scammers slip through the cracks. In time, these once tiny weeds become towering trees.

The size of the previous scam must always be much smaller than the latest one in the mind of an ego-driven mastermind of sweeping financial crime. Bent on the same pursuit of power and accumulation of excessive wealth, these type of criminals always crack in the long run, or they just simply piss too many people off. One way or another, justice finds them, or Karma miraculously kicks in. Yet, every now and then these type of masterminds conglomerate, and it takes longer for them to be revealed to the general public for what they really are. They make powerful friends, they contribute to the right political campaigns, they donate to charity, and they pay lots and lots of taxes to keep the government out of their affairs.

The Fertitta Family's money is not so hard to follow. Much of it is now re-invested in their own casino chain that they bought out of bankruptcy. Station Casinos is really only the tip of the iceberg, though. It's what's visible to the naked eye, but it's not the only major family asset.

Anyone remember that Casino that caught on fire a few years ago? The Monte Carlo was all over the news on January 25, 2008 as the facade began smoldering and black smoke poured into the Vegas atmosphere. Lots of YouTube Videos caught the action live.

At the time of the fire the Xyience bankruptcy had just been triggered by Fertitta Enterprises with their chief lien position over the company. I was talking with a Vegas-based investor on the phone that same day, not knowing what I know now about Victoria Partners and the Fertitta investment in MGM.

A Nevada Business Entity Search reveals seven active business entities operating in Nevada bearing the Fertitta name:

1. Fertitta Capital, LLC
2. Fertitta Capital II, LLC
3. Fertitta Colony Partners, LLC
4. Fertitta Enterprises, Inc.
5. Fertitta Gaming, LLC
6. Fertitta Partners, LLC
7. The Frank and Victoria Fertitta Foundation, LTD

There's also one revoked entity: Fertitta Management, LLC.

There's even a trademark out on the name Fertitta in Nevada.

There are additionally so many spin-offs and subsidiaries not under the Fertitta name that the full scale of Fertitta controlled and/or connected assets is virtually impossible to fully quantify. One company not often mentioned or thrown around in the mix is Victoria Partners Limited Partnership. William J. Bullard is the company's registered agent and the officers are listed as Fertitta Enterprises. This is the same family company the Fertittas used to bankrupt Xyience through Zyen, LLC. It's also the same company Frank Fertitta, Jr. served as Chairman of the Board for, even while he was "retired" from Station Casinos and making campaign contributions through Fertitta Enterprises.

MGM filed official SEC paperwork in February, 2010 that clearly lists Victoria Partners as a subsidiary of that massive gaming company. The listing reads: Victoria Partners, dba Monte Carlo Resort and Casino. So, at least on paper it looks like the Fertittas also have a controlling interest in the Monte Carlo. Ironically, just a few days after the ultimate decision by Fertitta Enterprises brass to burn Xyience investors in a figurative sense back in 2008, their other investment was burning for real.

Following the family money further, dating back as far as the late 90s, reveals a number of family trusts in different names, such as the ones listed HERE. The Centris Group paperwork also confirms Frank Junior was at the helm of Fertitta Enterprises for more than a decade with this passage: "Frank J. Fertitta, Jr. serves as chairman of the board of Fertitta Enterprises, Inc., an investment company."

For an investment company, Fertitta Enterprises is a very low profile operation. There's no company internet site, very little news about what the business actually does, and at least a few surreptitiously named and situated entities that fall under the company banner.

Of course the Fertitta ownership of Zuffa, LLC and Gordon Biersch Brewery are also significant. Zuffa, LLC has 13 separate registered Zuffa entities bearing the company label in Nevada alone. A broader national or international search would likely show many more companies owned and/or controlled by the Fertittas or their close associates. A recent re-broadcast of an old UFC card featured the Gordon Biersch Brewing Company all over the UFC mat. Looking up Gordon Biersch in a Nevada Business Entity search also produced interesting results, showing a default status for the company and William J. Bullard as the registered agent.

Further cross-referencing the other companies Bullard is a registered agent for gives you the following businesses:

1. Campione, LLC (Lorenzo Fertitta is a managing member)
2. Export Limited Partnership (Fertitta Enterprises listed as General Partner)
3. Gordon Biersch Brewing Company
4. KB Enterprises (Victoria K. Fertitta is President and Director)
5. Victoria Partners Limited Partnership
6. Zyen, LLC (parent company of Xyience, Inc. and subsidiary of Fertitta Enterprises)

So many companies linked to the Fertittas are mired in scandal, fraud, and/or lawsuits. Station Casinos alone is dealing with a labor union debacle in the midst of their bankruptcy and just settled a huge wage dispute with employees who filed suit against the company. Station Casinos executives basically put the whole casino chain around 6 billion dollars in debt to cause the bankruptcy, blaming the tough economy the whole way through. Now they just happen to be hiring again just a few months after they bought most of the company back in the bankruptcy courts for a song. Why didn't the Fertittas take any flack for tanking and then banking back into their own chain of casinos? Why do these billionaires keep getting bailed out of big trouble?

Even the Gordon Biersch takeover by the Fertittas became hostile when they ran into an executive with some ability to fight back against their fraudulent actions.

William J. Bullard was reported to be one of the central figures in attempts to defraud a former executive of McDonald's named Thomas B. Allin who had invested in the brewing company:

"On Dec. 13, 1997, Allin alleges, he was informed by Bullard that the company's board of directors had determined that the fair-market value of the company was about $12.3 million and that the value of Allin's stock was now $40 a share, or worth $2.2 million less than he paid for it 18 months earlier."

Bullard was also implicated in shady dealings at USA Capital, another company mired in a long bankruptcy process. One of our previous articles here outlines Bullard's alleged involvement in some of the massive fraud perpetrated at the company that at the time of the bankruptcy held over $950 million in "assets." Bullard had the opportunity to speak to an unruly crowd of USA Capital principals according to a piece in the Las Vegas Review Journal, which quoted him:

"The longer this thing goes on (in bankruptcy court), the more the attorneys are going to get paid," Bullard said.

As if all of the above isn't enough to question and investigate further how and why the Fertittas make their money, there's deeper questions that need to be asked. Where do they keep all that money, how do they spend it, and who have they made friends with that keeps them from getting caught in their past swindles?

Meadows Bank is a great place to start. The records for Fertitta Enterprises and the Fertitta family's political donations over the past decade are also worth a look. The Board of Directors at Meadows Bank includes Lorenzo Fertitta, Andre Agassi, Key Reid (Son of Harry Reid), and Las Vegas Media Magnate Brian Greenspun. Timothy Poster is also on the same board and happens to be the same guy who sold The Golden Nugget to another Fertitta (Tillman Fertitta)in 2005. The bank was too late on the scene to be damaged by the housing crisis and just in time to benefit from a new season of bailouts and big spending in Washington. The current Community Bank Legislation funnels billions to institutions including Meadows Bank via the SBA 504 Loan Pool also known as First Mortgage Loan Program or FMLP.

Here are a few interesting articles and links on the Meadows Bank players and their games:

Meadows Bank and the TARP Tax A question of Ethics for Senator Harry Reid

Book excerpts describing Harry Reid's days as Gaming Commissioner.



With political D-day today: November 2, 2010, it's also no surprise that so many UFC personalities are stumping for Harry Reid to stay in power. It's no surprise the above article also quotes Ross Miller, the guy who oversees all those business entity registrations for the Fertittas and their associates and friends:

"The UFC is one of the most powerful brands in the world for reaching 18- to 30-year-olds," Nevada Secretary of State Ross Miller said. "Anytime a candidate gets their endorsement, it sends a powerful message to that demographic."

Follow the money, see who greases what wheels and how, and you begin to realize how corrupt these financial masterminds really are. Though they've left a trail of broken lives and burned investors in the wakes of all their financial scheming, the Fertittas still look slick and smart somehow. They get away with fraud after fraud, one bankruptcy after another only they benefit from, and they just keep patting the politicians who help them on the back and putting money in their campaign coffers.

No matter what your political allegiance may be or where your sympathies lie as far as the big ticket issues go, far too many elected officials abuse their power and influence to serve themselves, their associates, their friends, and/or the people who helped pay for them to get elected. Nobody's keeping an eye out for the average everyday person anymore struggling to pay rent and put food on the table for his family. Politicians are far too busy feeding billionaires more benefits they don't need for kickbacks and consideration or campaign contribution payback.

It really is time for Americans to get more educated and follow the money in their own states and locales to see where it leads. I doubt the Tea Party or any new party of any kind is really the answer. It doesn't really matter who leads us if not enough of us are intelligent and active enough in society to hold our leaders accountable for their actions. Rather than rock the vote, it's time to truly rock the system and radically alter the status quo as far as what we accept from our leaders and our society's systems as a people. Get educated on what the real facts are and don't listen to the repetitive 24-hour news cycle. Dig deeper. Explore and expose what you can in your own neck of the woods. Be conscious of the real everyday problems that surround you, not just the ones CNN or Fox News tells you about.

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