Smoking Gun Evidence that Bergeron Case Was Unfounded in Law or Fact

The above email chain dates back to the beginning of the $25 million Xyience lawsuit filed against me in Las Vegas District Court back in 2007 by Attorney Jamie Cogburn. These exchanges came from an email recently sent to me by the brother of Xyience Founder Russell Pike, who is currently incarcerated due to a conviction for tax evasion. I will be publishing a large cache of other insider emails in the near future.

At the time these emails originated, Pike was working feverishly to get more investors to come in to keep Xyience viable. My reports were making those efforts nearly impossible. The lawsuit described investors willing to enter into financing with Xyience, but only if my articles were removed from the Internet. As soon as the case resulted in a preliminary injunction against me, Russell Pike sent a representative out to deliver copies of the injunction order to local investors. This rep wrote the following statement in an affidavit I filed in my counterclaim:

The Fertittas always denied through their attorneys that they had anything to do with the suit against me, but it's obvious from this testimony that they forced Xyience's hand. Dana White didn't end up investing anything, but before Fertitta Enterprises went through with their loan package they did get White's approval.

This email chain will be the main exhibit in a new case against Attorney Cogburn in Nevada. There will be much more to come on this front in the days and weeks ahead. Stay Tuned. 

Xyience Dismisses Claims Against Rich Bergeron; Accepts Summary Judgment on Counterclaim

orderdismissingcaseacceptingclaimxyience

By: Rich Bergeron

It's been a long time, but even a six-year legal battle did not deter me from continuing to report the truth about the history and current operations of Xyience. Today I can look back knowing I finally managed to get the claims against me completely dismissed. Four different judges oversaw the case over those six years, and multiple law firms and attorneys for the opposition.

The above order also allows for a summary judgment request on my counterclaim against Xyience to go unopposed, so it marks the first major judgment on my behalf in any legal action I've ever been involved in. It's all the more impressive since the opposing lawyer admitted the now-dissolved $25 million case against me had no merits.  

Though this order officially releases me from any liability and confirms my efforts to expose the truth, it does not end the litigation entirely. I still have an extensive sanctions motion in play with multiple affidavits supporting that motion. My own affidavit and evidence files explain the whole situation, but after a September 19th, 2013 hearing I can honestly say I don't think that presiding Judge Lloyd King bothered to read any of that content. 

Judge King certainly did not even consider the fact that the judge prior to him (Judge Mike Nakagawa) allowed me to amend the motion for the record. Judge Nakagawa would not allow me to amend a motion which had already been decided, which was the contention of the Fertitta lawyers going into this hearing.

The hearing resulted in an indefensible decision I will appeal to the 9th Circuit. That hastily-made ruling proved Judge King is biased against me to the point of believing everything the opposing lawyers contend, even if it happens to be a lie. Judge King actually made the effort to locate and read out loud an order on the motion before him, and that moment will be a major basis for my appeal. If it was a "senior moment" for the aging federal judge, his capacity to continue in such an important judicial role should be seriously questioned at this stage of his career. 

Now, I'm no law school graduate, but the last time I checked a summary judgment denial is not in the same legal ballpark as a complete claim dismissal. How could any acting federal judge get as far as Judge King has without knowing the difference between those two distinctions? 

Judge King read the decision on a 2008 summary judgment request in my case like it was a smoking gun for the Fertitta lawyers during the September 19th hearing. The motion he referred to is actually the most viewed document I currently have on Docstoc.com and can be accessed HERE. The Fertitta lawyers also tried to represent at the September 19th hearing that the same motion was dismissed on the merits, but the actual dismissal order concludes the dismissal is mandated by technicality, because I did not properly serve the motion on all creditors involved in the bankruptcy. I would have had to file my own bankruptcy petition in order to pay the postage alone on such notifications. I don't have the kind of budget most lawyers and law firms typically bring to the legal process. Everything I do is fueled by extremely minimal financial resources. 

So, Judge King read this order denying summary judgment on my sanctions claims. He read it right out loud in court for the record right after trying to explain that it meant the whole issue had already been litigated and dealt with. Why even have a hearing in the first place if his conclusions were true? If he reviewed the record and came to the decision that the Fertitta lawyers were correct in their false representation of the record, there would not even be any basis for holding the hearing where he made this huge mistake. I immediately corrected him at the hearing, but that only made things worse for me. He continued to betray an overwhelming bias against me along with a willingness to praise and commend the opposing lawyers. He even rejected a legally feasible and logically sound request for a default judgment against all parties who did not answer the claims and did not have any representation at the hearing. 

I gave Judge King multiple chances to hold a more comprehensive hearing when I could physically attend, asking for the hearing on September 19th to be considered a scheduling conference. Instead, he allowed the telephonic appearance to be my final say in the matter, and I had a great deal of issues with the court hanging up on me and not being able to hear me clearly. Judge King couldn't even be bothered to come up with any official legal background for his denial of my claims. He left that up to the main opposing attorney and his law firm. 

Gordon Silver is a high-class Las Vegas law firm, and the main guy they put on this case is a managing partner named Greg Garman. This shark is a well-trained and experienced lawyer with a very esteemed position at his firm and in the legal community. So, how could he really confuse the record himself to the point that he put such incredible misrepresentations in print and then repeated them in open court after I corrected him in my reply brief? The most logical answer is that he was never confused at all and just purposely painted the record in a false light to make his case look like it could be easily dispatched on a technicality instead of actually being examined on the merits. Lawyers seem to love winning legal battles on technicalities. It saves them the trouble of actually defending against or pressing claims based on actual facts and evidence. 

This time, the basis for giving Garman the win on a technicality was completely fabricated. His argument that a technicality existed at all made Judge King look like a fish out of water when he tried to take the bait. 

Once again, the September 19th hearing proved to me that justice is an evil bitch. The judicial system in this country is hopelessly bogged down by patronage, abuse, waste, and incompetence. People like me were not intended to be able to even make it this far into the legal process. I jumped through every hoop my opposition put in front of me, and by some miracle I remain standing more than six years into this extensive litigation that went from an obscure district court claim to a major bankruptcy adversary proceeding. I simply could not make it to this point if I did not have the truth on my side. 

Over time I learned to realize that pointing out serious flaws in the opposition's arguments and legal citations did not mean those points would even register with a judge who came into the process as a biased party. I came to appreciate how twisted the system is when it comes to pro-se (self-represented) parties. I knew at some point only an appeal examined by competent and unbiased federal judges would set the record straight. At this point, Mr. Garman hasn't even filed any order to appeal, but I'm eagerly awaiting the moment when I can actually see what the court's official decision will use for a basis in law. 

Perhaps the most interesting aspect of the hearing came in the response to my opening comments (which went largely unheard due to a bad connection). Mr. Garman began his statement by confessing that the Fertitta brothers are already suffering due to my work. He did not get into specifics, but he claimed I was responsible for their recent issues with the Nevada Gaming Control Board. If their trouble with the gaming authorities is my doing, I wonder what else about the Fertittas gaming officials might need to know. I haven't even really investigated Station Casinos as much as I have researched the Fertitta involvement in Xyience.  

Garman's remarks proved to me what I've always known in the back of my mind: courts are far too slow at delivering justice. Real justice comes from the court of public opinion. Exposure of inherent evil is often fatal to its ability to fester and grow out of control. Station Casinos has a history of leaving victims behind as the Fertitta brothers continue to hoard their billions in personal assets. As a gaming licensee in Nevada, these casino barons ought to have a much cleaner background than they currently do. The fact that the Fertittas brought Ultimate Poker into legal status as the first official online poker outfit in the state of Nevada is disturbing when you look at what Fertitta Enterprises is really capable of when it comes to fraud. Their connections to the illegal Full Tilt Poker operation through their ownership of Strikeforce is also egregious considering they should have known the illegal status of online poker when they made decisions to retain their sponsorship agreement with the company when it came under Zuffa control. Even worse, US prosecutors labeled Full Tilt Poker a Ponzi Scheme since the outfit's owners were allegedly pocketing player funds. 

The Station Casinos expansion as a management firm into California casinos governed by Native American tribes is even more troubling under the circumstances. Their indirect financial connections to California senators are telling. Senate Majority Leader Harry Reid also has a son named Key Reid who is on the board of directors for the Fertitta-run Meadows Bank. 

It makes sense that even a federal judge would be afraid to rule against people with this kind of power and access. They are virtually untouchable. Still, Judge King also refused to sanction me despite saying in open court that he actually felt I was the one who deserved sanctions. So, basically he admits he is not willing to even rule in favor of what he feels is actually justified. 

The appeal process should be intriguing, but I also plan to report Judge King to the state bar for displaying a complete lack of ability to do even minimal research into the claims he decided so hastily. The most important development at this stage is regarding my long break from working on this site. The litigation process leading up to my departure from Las Vegas was draining and stressful, and I needed a break from all of it. The hearing designation and dismissal of all claims against me opened new doors and brought me back to the heart of the story and the need to expose the real truth here. 

With no legal obstacles, I can now pursue a non-fiction book project on the case. I can also begin to plan out a documentary. At the rate I'm going, such projects will have a better potential to benefit burned Xyience shareholders than any legal action I could possibly undertake. I am also compiling an extensive report to deliver to Nevada, California, and Native American gaming authorities, which could do more to bring the Fertittas to justice than any judge in any court in this land. Someone must show these ruthless robber barons that there is a price to pay for screwing over innocent people and destroying their investments needlessly and thoughtlessly. 

Although I should be disappointed upon losing the decision on the most important motion in my case thus far, I am actually thrilled. My passion for this story is renewed. My prospects for a successful appeal are promising. Judge King's bias was more pronounced than ever at this latest hearing. Over the next few weeks I will be working to revamp this site to include all the relevant information and documentation detailing the irresponsible and corrupt history behind the Fertitta family facade. Stay Tuned for more frequent updates in the days and weeks to come.

EDITOR'S NOTE:

All stories on this site are now free to read with no subscription fee required. I will be spending some time updating broken links on the site in the next few days. This is mostly due to an unfortunate issue with the loss of all customer files hosted on fileden.com. We had a ton of material hosted there that now needs to be relocated to another public server. Some of these files are now hosted HERE. We will make a formal announcement when all bugs are fixed. 

The Choice of a NOS Generation

By: Rich Bergeron


It's only fitting that Xyience's star is falling and the brand is collapsing into debt just as Coca Cola's NOS brand of energy drinks cements a spot as the top sponsor of The Ultimate Fighter. TUF is the show that put Xyience on the map in the first place, so it's a strange coincidence.

News is trickling in lately surrounding the stable of fighters Xyience once sponsored, and it sounds like Xyience and Xenergy are at DEFCON X. Virtually all of the current UFC fighters on "Team Xyience" were cut from their sponsorship deals in recent days and weeks, and inside sources say the company owes at least 1.5 million dollars to Cott, the beverage giant responsible for creating and canning Xenergy. Without a bailout from the same Fertitta Family that owns the majority of the UFC, the company could be headed for a second bankruptcy or a fire sale. Fertitta Enterprises still owns and operates the brand, but a recent ultimatum from Frank Fertitta III and Lorenzo Fertitta forced the brand to make attempts to stand on its own without further financing from the billionaire brothers.

Inside sources also report that the Fertittas and UFC President and Part-Owner Dana White recently tried to convince Coca Cola's NOS brand to replace Xenergy as an official UFC sponsor. Right now NOS does not appear in any other octagon outside of the one on the TUF series. It's a relationship that the company fostered more with the Fox network than with the UFC itself. Yet, Dana is always drinking from his can of NOS whenever the show's camera crew catches him with one in hand. That's pretty interesting considering in past years fighters were sometimes caught "drinking" from closed Xyience cans. Dana's can is always open, much like his mouth.

What makes the NOS connection even more interesting is the fact that only a little less than six years ago, Dana White was telling NBC Sports that the UFC didn't need Coke's sponsorship:

“I’m cool with Mickey’s and Toyo Tires, man, believe me, you’ll never hear me bitch. The way that we’ve run this business and the way we have come up, think about it… we didn’t have any mainstream press, we didn’t have any mainstream sponsors, and look at how huge we are. I don’t ******* need Coke to keep doing what we’re doing, man. Believe me, the big time sponsors if they come on, of course that’d be fantastic. I don’t need ‘em. 18-to-34 year old males, they’re here hanging out with me. If Coke wants them, Coke needs to come to us.”

Suddenly it seems that White's words have come back to haunt the UFC, and apparently Coke still holds a grudge and won't bite on the league's multi-million dollar price tag to move their branding beyond the reality show. They don't need actual UFC fighters to flaunt their brand, either. The same tired commercial featuring a flashy, overconfident MMA fighter getting dropped with one punch is the new standard for NOS when it comes to marketing to the TUF fan base. And you can tell the winner of the fight in the commercial is really drinking from the can in the TV spot. He chugs it so fast, much of it ends up dripping down his face. Another jab at the UFC, although it seems unintentional, is the fact that the whole made-for-TV fight happens inside a ring, not a cage.

The Fertitta-run Xyience is in crisis mode these days, recently laying off multiple sales personnel and leaving the rest of the staff in fear of an imminent implosion. The company the Fertittas surreptitiously acquired by stealing it out from under hundreds of earnest investors is now a money pit. The Fertittas don't seem to want to spend the capital to keep the operation going despite getting a hold of the company for a song. It's the ultimate payback for all those shareholders who didn't get a dime out of the deal when the Fertittas purposely bankrupted the company and then retained ownership through a scandalous scheme involving former Cott executives pretending to enter into a serious purchase agreement only to later default on that deal.



For a little while the Fertittas made all the right moves to make the brand appear stable and ready to X-pand. Sponsorship deals with top-notch fighters like Jon Jones and Anthony Pettis appeared to be signs of the brand's resurgence as a key UFC sponsor. None of the fighters pictured above represent the brand any longer according to inside sources at the floundering supplement company. For Matt Serra, this marks the second time he's getting screwed for associating with Xyience. His prize for winning The Ultimate Fighter ended up getting wiped out by the company's bankruptcy, and he was the only fighter from that Xyience stable to come back to the brand before Chuck Liddell came out of Xyience retirement in recent months. Since Liddell's sponsorship agreement came with a pre-paid setup, he is among the last of the Mohicans still repping the brand. That's also fitting seeing as his initial Xyience sponsorship was one of the most lucrative deals in the history of the sport at the time of his first signing with the company.

The operation of Xyience once the Fertittas had control of it certainly betrays their attitude toward the fighters they employ in the UFC. It shows these silver-spoon billionaires just don't give a damn about the people who line their pockets. These recent developments illustrate an underlying selfishness on the part of the UFC's royal family that pervades everything they do. Xyience only mattered to them when it was a way to get a HUGE LOAN or a way to pay the UFC with the same money they used to get the chief lien position over the company just before they rigged the bankruptcy process to work in their favor.

At the moment my own legal battle with Xyience and the Fertittas is in limbo. I've been waiting for the right moment to ask for a final hearing on my remaining claim asking for millions of dollars in sanctions against the Fertittas and their associates who made the whole fraudulent bankruptcy possible by silencing my reporting. Should Xyience and Xenergy fold due to the Fertittas failing to put their own money up to bail their UFC sponsor out, it will be the perfect cap stone for the case I've built brick by brick and year by year to prove that Frank and Lorenzo Fertitta only wanted Xyience to be a going concern if it operated as a personal piggy bank. Without any way to siphon money off the brand or use the brand to make the UFC look better than it actually is, the Fertittas just don't need it. Sadly, this has been the trend as long as Xyience has been in business. It's been passed from one abusive management and ownership crew to the next. Everyone seems to find a way to smack it around and treat it like another red headed stepchild with no real identity or meaningful purpose for living and thriving.

What seems to get lost in translation to most of the fans who stumble onto this story is that there are real victims behind this ongoing scandal. As the saga continues to unfold the people who suffered most are only reminded of the savings they invested into the fledgling Xyience. They saw all their hard-earned dollars put into the company get wiped out by a couple of scumbag brothers who have way too much money to begin with. Some of the children of these victims had to forego college. For many, their retirement plans were catastrophically altered. The money some of them spent their entire lives putting away for a rainy day is just gone, flushed down the drain by the careless and ruthless actions of a couple of casino barons who had all their wealth passed down to them from Daddy Dearest. They will never know what it is to truly earn a paycheck, but those they victimized over the years to keep themselves healthy and wealthy will always know what it's like to lose everything and have to start over.  

Let it be known that the Fertittas just don't care about real people with real struggles. They don't have any genuine concern for their own fighters, and they don't get bent out of shape in ruining families just to make themselves a little richer. Making things right for every individual they burned in the Xyience bankruptcy would be a drop in the bucket for these two billionaires with their ever-growing business empires, but they choose to ignore the suffering and act like it never happened.

While I never rooted for Xyience to fail in the past, it seems to be sweet justice to see it failing now. I seriously doubt my fledgling BOYCOTT XYIENCE campaign made a dent, but I'm at least proud that I never really gave up the struggle to educate the public about who the Fertittas really are and where their motivations really lie. I will never forget the people who really put Xyience in position to be successful in the first place, and I will cherish the day I am allowed to put Frank and Lorenzo on the witness stand to answer some real hard hitting questions about the damage they've done and the lives they've destroyed in the name of pure greed.

In all honesty, I hope Xyience doesn't fail just yet. I hope that the Fertittas actually sink a few more million into trying to make it work. I hope they invest just enough so they wind up losing as much as the people they've screwed over the years have lost for believing the brand would be taken care of by the UFC owners. Now that would be real justice. Here's to hoping Karma catches up to these corrupt and spineless scamsters, so even if the burned Xyience shareholders don't get any financial relief they can at least get a little revenge...served with a cold can of Xenergy.   

X Marks the Sport: Xyience Scam Shows Dark Side of MMA's Most Powerful Promotion

"Where ignorance is bliss, 'tis folly to be wise." Thomas Gray, Ode on a Distant Prospect of Eton College, 1742

From the oldest dimestore novels to the most current TV cop dramas, a classic element of detective stories is the old familiar line about the perpetrator always coming back to the scene of the crime.

As Xyience Inc. limped through a controversial bankruptcy process over the past few years, the Xyience and Xenergy branding was relegated to UFC fighters wielding cans of the energy drink and the Xyience.com and other Xyience and Xenergy logos appearing only on the outer ring of the mat or on the ring bumpers.

The old center of the mat space Xyience used to occupy became prime real estate that Harley Davidson and Bud Light occupied for most of Xyience's absence. 

Saturday, May 5, 2012, marked a milestone for Xyience: a triumphant return to their old domain. Once again, the brand picked up where it left off, marking the center of the mat space for UFC on Fox 3 with the "Xenergy" (pronounced Zen-ergy) name, focusing on the company's sugar-free energy drink.

Ironically, this is the same strategy employed by Xyience Founder Russell Pike. Now facing July sentencing for being found guilty of tax evasion, Pike's been someone the current company wants to distance the brand from. Yet it was Pike who first decided to take the Xyience bar code off the mat and replace it with a Xenergy can.

Back then Pike's goal was to drum up interest in a potential buyout of the drink label while the rest of the company would continue under the Xyience name.

Though the Fertittas seem to paint Pike as the prototypical fall guy, they went to great lengths to lock the founder and his friends and family out of controlling the operation so they could bankrupt it after promising shareholders that their involvement and intervention would save the company from such a fate.  

On Oct. 2, 2007, Xyience Co-CEOs Adam Frank and Kirk Sanford informed Russell Pike, William Pike and Michael Clark (shareholders who represented 25 percent of the shares outstanding) that if they did not sign the funding consent form for the Fertitta funding and give up their voting rights, Frank and Sanford would put the company into bankruptcy.

On Oct. 3, under duress, the Pikes, Clark and other major shareholders signed the consent forms. Only 11 shareholders, who represent over 50 percent of the shares outstanding, ever saw the funding agreement before it became official.

An email sent by Fertitta Enterprises GM Bill Bullard to Lorenzo Fertitta on Oct. 4, 2007 discussed a $150 million offer from Cott Beverages to buy Xyience. This email was only found due to an intense discovery process initiated by the trustee's counsel, Jon Backman. The full text of that message is below:

By January 2008, the Fertittas perfected their scheme by foreclosing on their loan and speeding the company ship toward the iceberg of bankruptcy.

Instead of letting Cott buy the company at full price, two former Cott executives wound up agreeing to purchase the brand out of bankruptcy for $15 million through a front company called Manchester Consolidated.

Coincidentally, that purchase price was exactly 10 percent of the $150 million mentioned above. Manchester would later default on their payment plan, ceding control back to Fertitta Enterprises.

All the golden parachutes were reserved for company insiders who were in on the scheme, and over the past four years and counting the result of losing their Xyience investments tore apart innocent families, caused individuals who lost everything significant pain and aggravation, and forced a ton of folks to start over on building their once-substantial nest eggs.

The Fertittas rode into the sunset with their own supplement company that is now making record profits.
  

Few Mixed Martial Arts fans know the true extent of what went on behind the scenes at Xyience leading up to and throughout the ongoing bankruptcy. Wednesday, in a Las Vegas courtroom in front of a substitute judge from Hawaii, Attorney Jon Backman, the bankruptcy trustee's counsel for Xyience, settled some contentious issues with Fertitta Enterprises. 

The re-organized Xyience (Zyen, LLC) staff celebrated the announcement of the settlement recently with a huge catered dinner at Red Rock Casino, the most modern and luxurious casino the Fertittas own in Vegas. They're calling the next phase of the business "Xyience, Round 2."

Meanwhile, 385 original Xyience shareholders will be left with absolutely nothing once the final check is signed distributing the final dollar left in the trust.

Over 65 million shares issued in the company during their early days of rubbing elbows with the UFC will now be worth less than the paper they're printed on. Family trusts, retirement accounts and college funds were wiped out by the Fertitta takeover.  

Some say life imitates art, while others argue it's the other way around. I stumbled upon the Xyience debacle for the first time as an independent investigative reporter covering the sport of MMA in 2006. The resulting project and related litigation eventually became a significant part of my everyday life.

This site will someday make a phenomenal book and/or documentary effort. The experience proves beyond any reasonable doubt that fact is truly stranger than fiction. 

Those MMA fans who might wonder why they should care about scandals like Xyience need to look at the bigger picture. The Fertittas knew they could get away with this from the very beginning when they first pulled the trigger on this scheme. Consider this snippet from a Las Vegas Business Press article printed a month into the bankruptcy:

Attorneys for three unsecured creditors claimed that the deals were part of a "lend to own" strategy pursued by the Fertittas.

The Chicago law firm of Bell, Boyd & Lloyd filed papers alleging that Xyience's "bankruptcy case appears to being run for the sole benefit of Zyen -- the debtor's insider secured creditors."

It added: "Zyen is given a giant axe to hold over the debtor's head, while the debtor's credits are left with no opportunity to defend themselves against improper chopping."

Zyen, a Fertitta company, would have the right to make a bid for the company, the Chicago attorneys contended.

Chicago attorney Jim Morgan told the judge: "There is going to be possibly a forced sale with absolutely nothing left in the estate for unsecured creditors."

Greg Garman, attorney for the Fertitta's Zyen, rejected criticism from shareholders and unsecured creditors, even though his clients' crooked behavior was one of the main reasons why these parties were concerned in the first place. It is unlikely that Xyience shareholders will recover anything from the bankruptcy due to the large amount of debt, Garman said.

The bigger picture reveals that Xyience's bankruptcy basically served as a practice run for the much larger and more profitable Station Casinos bankruptcy. Both companies sit comfortably on the other side of bankruptcy as reorganized entities at the moment. Station Casinos just announced a $6.8 million profit for the first quarter of 2012.

The Fertittas are still rich and getting richer, but at what cost? The little people paid for it all, from the private jets to the tailored suits to the luxurious mansions.

Pension funds and savings accounts across the nation affecting countless average Americans in multiple locales were impacted negatively by the unethical and irresponsible behavior of the Fertittas and their minions. 

Too many MMA fans and even more MMA media professionals stick their heads in the sand and pretend that the UFC's primary owners are great guys, model citizens, and all-around heroes. If you look into their past, you will see that Xyience is just the tip of the iceberg.

Since their transgressions have gone unchecked for so long, these powerful Las Vegas brothers keep generating bigger and bolder schemes, enlisting high-powered local lawyers to deal with the fallout. They grease the palms of enough national political forces to insulate themselves from any federal probe, too. 

This penchant for pulling off fraud and stepping on the toes of little people most certainly carries over into their operation of the UFC at many levels. Silence is golden for the the Fertittas when it comes to the UFC, and there's millions of reasons for them to keep most of their financials private. 

This is why no fighter is making a million dollars per bout in the UFC while there are a number of boxers who can command that amount and more.

Interestingly enough, Russell Pike reportedly gave Chuck Liddell a million-dollar contract to pimp Xyience back in the early days of the company. Pike's regime also signed multiple high-caliber fighters to the brand across the MMA landscape and not just in UFC circles.

Despite his criminal tendencies, the company founder made bold moves and laid the foundation for the UFC's current symbiotic relationship with Xyience.

The Fertittas have much more cash at their disposal now as owners of Xyience, but they don't have nearly the same number of talented fighters in the sponsorship stable these days. The Fertitta-owned Xyience also now only sponsors the UFC and their own fighters instead of branching out to other MMA leagues and sports as Xyience did in past years.

The little people in the UFC to the Fertittas are the fighters, even though many of the men and women fighting for the top dog in MMA become fiercely loyal to the Zuffa, LLC organization. Few fans and media professionals realize that this is a conditioned response.

The Fertittas and Dana White fostered a leadership environment leading to a whole new class of obedient fighters who rarely rock the boat or call out their bosses for any reason at all.

Over the next ten years as MMA athletes who fought the bulk of their careers for the UFC are retiring, we may begin to see the real toll a UFC career can have on a fighter's health. By then it will be too late for the fighters suffering from the worst symptoms to negotiate for a higher per-fight pay or a piece of the royalties the UFC makes off their past fights and likeness rights. 

It's time for the truth to trump the lies. It's time for people to realize the Fertittas built their success off the backs of better men and women than themselves. These silver-spoon-fed brothers are much worse than whoever is responsible for JP Morgan Chase's $2 billion miscalculation the FBI jumped all over recently.

Why aren't any federal authorities taking a harder look at the tactics these billionaires are using to continuously get away with ruining the lives of average Americans who get duped into backing these economic hitmen? 

In reality, Bernie Madoff and Wall Street's worst scam artists are not nearly as bad as the combined negative force of the army of financial wizards in this country like the Fertittas who get away with fraud considered to be legal (or only borderline criminal) and only subject to civil penalties. And those civil penalties only apply if those damaged by the fraud can afford the world's most fantastic lawyers.

Paying law firms to cover up their worst behavior becomes cheaper for businesses and billionaires than it would cost to do business the right way: with respect and responsibility.

The roadmap to riches for the Fertittas ripped apart the lives of regular folks from all walks of life, from firefighters and teachers bilked out of retirement funds, to Xyience investors who had their shares wiped out due to Fertitta greed, to all the fighters the UFC chewed up and spit out for not fighting up to the big dog of MMA's standards.

Don't believe the hype and never forget the people who bought out and rebuilt this league will take care of themselves first and screw the little guy any chance they get if it can make them an extra buck by doing so.

The Fertitta family's Galveston gangster ancestors would be so proud to see what kind of corporate crooks these grown brothers have become. 

FTC INVESTIGATION OF UFC IS NO RUMOR

By: Rich Bergeron

The three letters that changed the mixed martial arts landscape and put the sport on the map in the first place are U-F-C. Not only do those three letters stand for Ultimate Fighting Championships, but they also have been used by many fans to represent and encompass the entire sport of MMA. All too often I've heard even small-scale local shows that have no affiliation with the UFC referred to by patrons as "UFC fighting." Across the world MMA is also known as "Ultimate Fighting."

These realities were present long before the parent company of the UFC purchased the outfit's most powerful competitors, yet it seems that Zuffa's always been intently focused on maintaining and improving their top-dog status in the world of Mixed Martial Arts. Over the years this juggernaut has grown from an obscure, barbaric, and controversial outfit into a widely accepted and heralded business model working on gaining world MMA domination by any means necessary.

No pinnacle Zuffa reaches ever seems to be enough, and the initial $2 million investment in the company by Frank Fertitta III and his brother Lorenzo Fertitta has since been paid back more than 1,000 times over. Three little letters started it all, though they were three letters the Fertittas and their friend Dana White never actually created themselves. The UFC actually started as someone else's vision, someone who didn't have the friends or partners with the tens of millions of dollars it would take to turn the fledgling, struggling sport into a ruthless, all-powerful business.

Three other letters are now looming large to threaten the UFC's complete supremacy and question how the Zuffa banner came to corner the entire market. Those letters are FTC, and they stand for Federal Trade Commission. There have been some articles and blog posts in recent days speculating on supposed "rumors" of an FTC investigation regarding potential anti-trust violations and monopoly concerns that could target the UFC's parent company Zuffa, LLC. Let's put the rumors to rest right now and stop the speculation once and for all.

The Federal Trade Commission has plenty to be concerned about regarding Zuffa's business practices. Sources I speak to regularly confirmed to me last week that the FTC already started an intense investigation into Zuffa and will likely come up with sufficient evidence to file a complaint. Even though it seems that it's mainly boxing industry insiders being blamed for dumping on the UFC's parade, Dana White's openly complained that some of his loudest pugilism-oriented critics are simply copycats and "cry-babies:"



Ariel Helwani, the masterful interviewer who may well be the most recognized MMA reporter on the planet, also broke the story regarding the Zuffa buyout of Strikeforce. During the exclusive one-on-one session with Dana White that helped the UFC explain the Strikeforce purchase, Helwani managed to get White to say the words "business as usual" a total of ten times. This all seemed like Deja Vu to many of the MMA media members who are not on Dana White's top ten list of go to guys he calls to get the word out on a big development.

White's hollow Strikeforce promises sounded strikingly similar to what he said would happen when Zuffa purchased PRIDE from that ciruit's Japanese owners. Instead of holding "Superbowl" events featuring UFC fighters facing PRIDE vets, Zuffa wound up dissolving PRIDE amid a torrent of controversy and legal wrangling. The really dedicated MMA journalists out there like Zach Arnold of Fightopinion.com are not out to please the Zuffa brass enough to get exclusive access. They simply want to educate the fan base and keep them in the loop about what's actually happening behind the scenes rather than simply spouting what White and the Fertitta brothers may want you to hear.

Notice how Dana White would not answer Helwani's question about the government's interest in Zuffa's business practices. Helwani, to his credit, made sure White addressed the question but didn't go far enough to press him for a yes or no about whether White's been approached by anyone in the government. Whether Dana's been given the third degree by investigators or not, the fact is the FTC has a long list of potential avenues to travel down in their investigation. Officials from that agency are already interviewing key witnesses to contract issues and other antitrust and monopoly concerns that continue to play second fiddle to the burgeoning debate about New York state's refusal to regulate mixed martial arts.

My own piece of the pie relating to Xyience shows beyond any reasonable doubt that Zuffa's principals have been using Xyience sponsorships and the intimate relationship with their sponsor to perpetrate insider dealing. The Xyience stable of UFC fighters is expanding rapidly, and since Fertitta Enterprises is the actual owner of Xyience at this point the company policy actually forbids sponsorship of any other league or sport. Though the company is still embroiled in an ongoing bankruptcy litigation steaming toward a trial date later this year, some of the UFC's top level fighters sport the Xyience brand proudly and seem to get preferential treatment for doing so. Meanwhile, a bevy of fighters sponsored by Xyience prior to the bankruptcy are conspicuously absent from the current company roster of marquee fighters. Misrepresenting the strength of Xyience is also an issue at the heart of a senior secured credit facility that allowed the UFC to borrow the money to acquire PRIDE in the first place.

There are multiple reasons for the FTC to look into Zuffa's conflicts of interest regarding the Fertittas' ownership of Xyience. At the same time this intriguing sponsorship push by the reorganized Xyience is taking place, other sponsors have been locked out of the UFC cage for one reason or another. If certain fighters are perhaps being forced to enter into sponsorship agreements to gain special treatment from Zuffa brass or forced to drop other sponsors that compete with preferred sponsors like Xyience, the FTC and the Justice Department should take a close look at this unhealthy scenario. It's called "tortious interference" when a business inserts itself into a contract unfairly and/or exerts undue influence to make or break a contract. Looking back through the UFC's history it's not hard to find multiple examples where fighters were forced into making certain agreements to appease the bosses. One example is Dana White's ultimatum to the UFC organization's fighters forcing them to sign over lifetime rights to their likenesses to a video game manufacturer or be fired. If that isn't textbook tortious interference, I don't know what is.

The UFC did not gain top-dog MMA league status through acquisition alone. They also sold a slice of the business to an Abu Dhabi entity that has endless financial resources. Additionally, the Zuffa brass employs an army of lawyers in numerous venues who seem to be retained in order to sue competitors for even the slightest appearance of impropriety. Few brave souls who sued on their own or counter-sued have been able to gain much ground filing suit against Zuffa, though, especially in light of the Fertitta family's influence on the Nevada judiciary and political landscape.

The Fertitta family and their Station Casinos chain provides regular political campaign donations, and Nevada is a state where many judges are elected to office rather than appointed. The Nevada wheels are thoroughly greased in favor of the UFC due to the Fertitta connection and their generosity to the campaigns of judges, including the first judge to oversee my own case brought by Xyience. Judge Timothy C. Williams was endorsed for the bench by Station Casinos, which also helped distribute election pamphlets on his behalf. It's no surprise Judge Williams was recently over-ruled by an appeals court in another case which had the potential to damage a Station Casinos entity. Not even Mark Cuban's money could stop Nevada from favoring the Fertittas in the case of Randy Couture's contract dispute that Cuban attempted to assist with. Cuban's now a bondholder on the UFC's Senior Secured Credit Facility that paid for the PRIDE purchase and provided huge dividends for Dana White and the Fertitta Brothers.

Initial reports regarding the FTC's potential to come after the UFC seem to focus exclusively on antitrust and monopoly concerns stemming from the Strikeforce purchase. The reality is there are countless bigger picture issues, and the FTC and Justice Department won't hesitate to explore the possibility of filing a major, comprehensive complaint that considers various charges that go far beyond the Strikeforce deal. Some witnesses are being interviewed for hours at a time by a panel of investigators and interrogators who want to know the whole story behind Zuffa's operations, and that tells me these government employees are serious and committed to going full circle on this effort. They won't simply stop at inquiring about the issues currently being aired in the "lamestream" MMA media. Consider the FTC's stated powers by law:

The Commission may" prosecute any inquiry necessary to its duties in any part of the United States" (FTC Act Sec. 3, 15 U.S.C. Sec. 43) and may"gather and compile information concerning, and to investigate from time to time the organization, business, conduct, practices, and management of any person, partnership, or corporation engaged in or whose business affects commerce, excepting banks, savings and loan institutions * * * Federal credit unions * * * and common carriers * * *." (FTC Act Sec. 6(a), 15 U.S.C. Sec. 46(a)).

Odds are there will be plenty of dirt to dig up through talking to the people who know where all of Zuffa's bodies are buried. Though the FTC will likely never publicly admit they're taking a hard look at Zuffa before a complaint drops, it can't be a coincidence that so-called "rumors" are being spread about their curiosity. Where there is smoke there is fire, and if the FTC goes after Zuffa with all of their resources it will only be a matter of time before the resulting inferno burns Dana White's bald head and the rest of the company brass. For once they might be in a situation where their political campaign donations and lobbying efforts won't help in the long run. For once their opponent across the courtroom won't have less money to spend pressing their case. Whether it becomes a civil case or a criminal one--or both--remains to be seen, but a case will most surely materialize in due time.

The only problem seems to be that whatever happens as the saga unfolds, it seems exceedingly impossible to conceive a scenario in which any complaint will result in any actual accountability shown by the Zuffa powers that be. Perhaps the company will pay a hefty fine or a select few high-level co-conspirators will get into a bind with potential criminal charges, but slick lawyers with huge retainers will make sure to save the day either way. Whatever changes might be mandated due to the crackdown will likely make minimal difference since so much of the damage has already been done. Only in a perfect world will we see any public congressional hearings or any corporate crooks in silver bracelets.

What's far more likely is fighters will continue to be screwed by Zuffa management into conceding better benefits and pay days in order to stay under the UFC/Strikeforce banner. Rather than rely on fair compensation from the league, these cage warriors will continue to rely on sponsorships for day to day expenses for training and costs of living. Many of those sponsors will also continue to be forced to jump through hoops and pay out of deep pockets to be in a position to even approach and deal with Zuffa's stable of combatants. Dana White will go right on calling his critics "idiots" and be seen as an everyman who speaks his mind and tells it like it is. He'll keep denouncing unions and making moves to prevent his fighters from ever considering creating their own union, which they may need now more than ever. But...the real journalists who come from the kind of background that only leads to blacklisting for truth-telling will always know the real story too many others are afraid to tell for fear of losing access. That tale casts Dana White and his cronies in a light that makes Don King look like a saint.

I, for one, hope the FTC proves me wrong.

UFC and Station Casinos Facing New Battles

By: Rich Bergeron

The UFC and Station Casinos have both been making headline news over the past few weeks. The two entities typically keep their operations wholly unique without any major overlap. Yet, in many ways these two companies with brothers Lorenzo and Frank Fertitta III at the helm have been suffering from some of the same woes. While the brass at Station Casinos grapple with local Culinary Union workers and a massive National Labor Relations Board (NLRB) Complaint against the casino chain, the UFC recently held a fighter summit at Red Rock Casino (A Station Casino property) and announced measures that appear designed to make sure a fighter's union never materializes. The unspoken message to the MMA practitioners in attendance seemed to say to all of them that the one thing UFC definitely doesn't stand for is Union Friendly Company.

As far as Station Casinos and their union troubles, it seems that they literally have no defense in the NLRB case. Casino brass recently brought back two employees fired for union organization efforts in what looks like a clear surrender, potentially opening the door to further appeasement efforts. Culinary Workers Union President Geoconda Arguello-Kline pointed out recently that the "We love Locals" motto of Station Casinos comes across as slick and disingenuous due to how the company's been treating their union-friendly staff over the years. Arguello-Kline explained, “It is truly alarming that a company which claims to love locals has had the federal government step in to ensure that workers are not retaliated against for exercising their rights under federal labor laws.”

Culinary Local 226 has been anything but quiet about their concerns, and their president seems to have a point about the casino chain's company slogan hiding the real issues related to attempts to unionize. After all, the most recent union protest on March 24, 2011 inspired a response from the company that included rolling out a chain of three "We Love Locals" billboard trucks to mask a 1,000-member, two-mile march from union headquarters to Palace Station. 100 of those 1,000 "Locals" were arrested for trying to block the entrance of the casino during the protest.





Whatever happens with the NLRB complaint, it seems highly unlikely that any company executives responsible for the anti-labor climate at Stations will leave their offices in handcuffs. Like the fat cats on Wall Street who saw their companies pay fines their personal, irresponsible behavior inspired, the most culpable company employees at Station Casinos will probably get off with no real punishment at all. Ths is despite the fact that the original 166-count complaint featured charges of threats, intimidation, interrogation, surveillance, bribery, discouragement, discrimination, discipline and even physical assault to thwart workers efforts to form a union. Yet, any resolution of these disturbing issues is most likely to involve the company being forced to pay fines and institute changes that will make it easier for workers to organize without repurcussions and retaliation.

Station Casinos was once labeled as one of the 100 best companies to work for by Fortune Magazine. Yet, despite the union issues and a highly contentious bankruptcy process, the Fertitta brothers remain high on another important list. Both Lorenzo and Frank Fertitta III had no trouble making the Forbes list again this year with both said to be worth around a cool billion. Though they slipped a few spots in the heirarchy of that rich list, the favorable outcome to the bankruptcy put nearly all of their financially-stressed properties back under their control. They even went on a hiring spree and launched a huge giveaway of cars and cash before instituting reorganization plans revealing they might not even end up paying for most of what they gave away to generate business.

It's hard to believe this is the same company that at one point planned to build a $10 billion development featuring three hotels and casinos at the site of the Wild Wild West motel and casino on Tropicana Avenue and Interstate 15. (concept photo at left)

The project also reportedly included a possible plan to place an arena on site. The concept was even championed by a Deutsche Bank official, which is ironic considering that's one of the same institutions now left holding the bag for a great deal of the casino chain's massive debt load. That huge amount of Station Casinos debt that led to the company's bankruptcy was racked up and steadily growing out of control long before the "Viva" resort plans hit the presses. Just acquiring the target land area for the proposed--and now likely doomed--development cost the Fertittas $335 million over a ten-year span.

Considering the completely irresponsible handling of the company's business by the Fertitta Brothers, it's no surprise that their lenders are now challenging the family's buyback of Green Valley Ranch for $500 million, which would eliminate $378 million in debt. It seems to be perfect timing considering the UFC, owned by the same Fertitta brothers, is flying high enough to help out with some of the big ticket buybacks of these highly-distressed properties. The UFC's success has been so pronounced that there was even enough cash flow to buy the next best fight league on the market. To keep the UFC gravy train flowing, though, it's going to take more than the acquisition of a major competitor like Strikeforce.

To really take heed of the lessons learned by Station Casinos' union struggles and bankruptcy, the Fertittas will have to focus more on saving money than spending it when it comes to operating the UFC. Though there is no current fighter union taking shape at this point, some recent decisions made by UFC brass indicate that it's something the organization seems concerned about. It can't help that one of their Strikeforce stars, Nick Diaz, is working on scheduling a boxing match with Jeff Lacy this fall. So, fighter payment is sure to take center stage as a contentious issue that must be dealt with soon if the Fertittas and Dana White intend to avoid the formation of any union.

The UFC took the first step in the union-prevention direction by announcing a new accident insurance offering designed to assist fighters who suffer injuries during training. The news came at a time when the injury bug hit the league square in the face after two marquee fighters (Frankie Edgar and Gray Maynard) wound up having to pull out of their main event fight scheduled for UFC 130. Frankie Edgar's broken ribs and Gray Maynard's busted knee will be taken care of under the new plan. Prior to the additional coverage being offered, fighters were only insured by the league for actual fight injuries. Outside of training injuries, fighters will also enjoy benefits if they are involved in non-training accidents that require medical treatment.

Still, other developments in the sport recently seem to point to a potential need for even more coverage for unforseen health circumstances fighters may face. Bryan Baker's proposal to his girlfriend at a Bellator event recently paled in comparison to the news of what he had to fight through to get to that point. A Dave Meltzer report in the wake of the engagement story sweeping the Internet also revealed Baker's battle with Leukemia and how he concealed the cancer diagnosis through three competitive fights. Brock Lesnar's bouts with Diverticulitis are also making waves lately, and the condition led Lesnar to back out of a planned match-up with Junior Dos Santos. Though many reports since the latest TUF coach fight was called off speculate on whether this could lead to Brock's retirement, nobody seems to be asking whether or not the UFC should be helping him with his medical bills. If they expect him to toe the company line in his post-fight speeches and keep him from making any return appearances with the WWE, what's so outrageous about expecting the league to step up and take care of his health woes? Of course, Lesnar might not be the best example since he is such a huge draw and one of the most well-paid fighters in the UFC. He's not likely struggling to pay his outside health insurance premiums, and it's not as if he's forced to turn to Obamacare to get by. Still, if it can happen to a guy like him who's been an athlete nearly all his life and is the picture of fitness, it can really happen to anyone. If the new plan doesn't cover these types of unforseen circumstances, it is probably only a matter of time before that type of insurance will prove essential.

Providing all fighters comprehensive health and dental benefits is just one way to stave off the formultion of any fighter's union. Another method utilized recently by Dana White involves demonizing union efforts and painting the Culinary Union's parent company (UNITE HERE) as the enemy to furthering the acceptance of the sport in a key state. White made headlines recently after calling attention to "union idiots" in New York spending money to oppose MMA's regulation there. UNITE HERE is lobbying against the sport in New York state due to multiple issues unions typically work to address on behalf of their members. A memo, put out by UNITE HERE members and mentioned in the above-linked story, points to problems specifically caused by the "near monopoly" the UFC created by purchasing Strikeforce.

Fighter pay and contract issues do seem to be legitimate reasons for UNITE HERE's opposition to MMA, though the Station Casinos case against the Culinary Union is also clearly an indirect contributor. The UFC and Station Casinos often neglect to keep their businesses from overlapping, so it's no coincidence Red Rock Casino hosted the most recent fighter summit that sought to quell many of the issues calling attention to the potential need for a fighters' union. It's also no coincidence that the same Fertitta brothers who don't seem to want their casinos to become union shops are also concerned enough to make moves that give the impression that they care about their UFC fighters as much as any fighters' union would.

The official UFC response to UNITE HERE's opposition (see above-linked article) cites the many union-friendly companies who are both employed by and benefit from UFC events and business practices. This is the "ultimate" height of hypocrisy that seems to be saying on one hand it's OK to support unions under certain circumstances while on the other hand the UFC brass makes every effort to avoid a fighters' union penetrating the organization and the UFC's majority owners don't even mount a defense to a sweeping civil indictment of their union-busting tactics at Station Casinos.

New York Assemblyman Bob Reilly was already a staunch opponent of MMA's regulation in New York state before hearing Dana White's "union idiots" chatter after UFC 129. Since Reilly admittedly received many donations over the years from various unions, he was obviously offended by White's union bashing and attempts to link the Culinary Union issue to the regulation debate. The fact is, since White's tirade against the Culinary Union the UFC brass seem much more concerned than they ever were before about unions, their power to negotiate, and the concept of losing the battle against union related issues plaguing their organization to the point where a fighters' union becomes inevitable.

One issue also plaguing the UFC of late has nothing to do with unions, but it could prove to be more damaging to the league than contract or insurance issues could ever be. Chael Sonnen's recent indefinite suspension by the California State Athletic Commission calls attention once again to the Steroids issue that cast a pall over other sports like Baseball in recent years. The prosecution of Barry Bonds illustrated that the government takes the issue of lying about steroid use seriously enough to spend more on that case than it has in pursuing many perpetrators of massive fraud on Wall Street. A recent report citing the United States Anti-Doping Agency's criticism of the UFC's drug testing policies raises some serious questions. Situations like Chael Sonnen's pathetic "hyper Gonadism" excuse for injecting 4 times the legal limit of Testosterone before his fight with Anderson Silva would have and should have encouraged a more involved investigation by the UFC itself if they indeed were intent on keeping Steroids out of the league. Instead, it appears that the UFC's casual attitude toward Sonnen's attempt to find a loophole to break the rules forced the CSAC to attempt to right that wrong for them.

Tyler Tygart, chief of the United States Anti-Doping Agency, advocates more stringent testing for steroids, and he points out that the UFC brass is engaging high-powered lawyers to argue against blood testing. The different regulatory bodies in the many locales the UFC travels to often have exclusive rules when it comes to testing for performance enhancing drugs. Some venues allow the UFC to do their own testing, which could create a look-the-other way climate for certain cards. Essentially, the UFC brass could decide to accept or act indifferently to PED use in the name of getting more exciting performances out of their fighters. There are already accusations that cards in Nevada (Where the UFC's parent company Zuffa and Station Casinos are both based) offer far less stringent testing than states like California. It seems that far more fighters who are caught in positive drug tests after fights are nabbed outside of Nevada even though the UFC has gone to great lengths to promote a high number of cards in their home state. Former Nevada State Athletic Commission officials are entrenched in the UFC, including Lorenzo Fertitta, who is one of the company's majority owners and also a former commissioner.

If any major government investigation on PEDs infiltrates UFC fighter circles and takes aim at Nevada in particular, the results could be extremely damaging. Union concerns and fighters like Nick Diaz turning to boxing for a better payday could wind up being small potatoes if that happens. The sad fact is the UFC brass, particularly the Fertittas, are used to both getting their way in their home state and throwing money around to get their way when they need to solve problems away from home. Once a major investigatory agency decides to dig deeper and refuses to allow money to trump justice, all the corrupt and subversive tactics the league's bigwigs have been getting away with could all come crashing down on their heads.

Don't forget the recent busts involving online casino giants like PokerStars.Com, which the UFC's majority owners just made a huge deal with not long after taking over Strikeforce. Strikeforce once counted PokerStars as a major sponsor, and that relationship opened the door for Station Casinos to negotiate an agreement to work together with PokerStars in lobbying efforts to legalize online gambling in Nevada. When government agencies stepped in and took over the online gambling entities, the Fertittas backed off their deal. The fact that the Fertittas didn't get deeply involved enough to be embroiled in the money-laundering and other accusations facing the online casinos was perhaps their first close call in what could be more major legal issues in the future if the next time they don't happen to be so lucky.