Ex-promoter faces contempt in Fla. SEC fraud case

By: By CURT ANDERSON, AP Legal Affairs Writer
By: By CURT ANDERSON, AP Legal Affairs Writer

MIAMI (AP) - A once high-flying concert promoter of acts such as Aerosmith, Elton John and Shania Twain could face contempt charges for failing to show up in Miami for a Securities and Exchange Commission fraud case that has spawned a multimillion-dollar lawsuit against Paris Hilton.

The promoter, John Utsick, 66, now lives in Brazil and refuses to return to the U.S. out of fear he'll be arrested for possible criminal violations, his attorney Richard Kraut said at a hearing Friday. The SEC wants to take his deposition regarding assets he took from his former company, Worldwide Entertainment Inc.

"Mr. Utsick has created this issue. He decided to flee," SEC attorney Robert Levenson said at the hearing.

Kraut said Utsick isn't hiding, but he wouldn't divulge in court where he lives in Brazil. "He's not in the Amazon someplace," the lawyer said. "He's not dodging anything."

The deposition dispute is the latest twist in a case first brought by the SEC in 2006 claiming that Utsick fleeced some 3,000 investors out of nearly $300 million between 1998 and 2005. Utsick, whose company promoted tours and concerts by top rock and country music acts and other shows, allegedly created a Ponzi scheme in which he paid older investors out of money from new investors, while his business actually lost gobs of money.

U.S. District Judge Paul Huck previously found against Utsick and appointed a receiver to identify assets around the world intended to return some of the lost investments. That receiver, Michael Goldberg, said he soon will send the first installment of as much as $25 million to be divided among investors, and eventually hopes to recover up to $60 million.

One of Utsick's yet-to-be sold former assets is a 17,500-seat amphitheater in Berlin, Germany. There's also sizable property in northern Florida, condos in the Miami area and six homes in California, Goldberg said.

The SEC wants to take Utsick's deposition to find assets he took personally and may still have. Kraut said Utsick's position is that as chief of the company he was entitled to the assets as a form of salary. Huck said he would give the two sides one more week to reach an agreement before deciding on the contempt issue.

"I don't have a lot of sympathy for Mr. Utsick. He's the one who put himself in this situation," Huck said.

The Hilton lawsuit stemmed from a 2006 film in which she appeared called "National Lampoon's Pledge This!" Utsick's old company, Worldwide Entertainment, invested in the movie and was an executive producer. Part of the deal was that Hilton was to pitch the movie on TV talk shows and media interviews, but Goldberg says that never happened.

"Hilton failed to attend any talk shows or telephonic or in-person interviews," the lawsuit says.

Goldberg said he is seeking about $7 million from Hilton and her management company, with trial in that case set for May 18. Ultimately any money recovered would go to Utsick's defrauded investors.

Hilton's lawyers contend that she fulfilled her main obligation to the film - publicity events at the Cannes Film Festival - and that there were only "vague and unspecific requests" that she do other appearances after it was released. At the time, they said, she couldn't do it because she was filming her reality TV show "The Simple Life."

"Defendants are not currently aware that the producers ever arranged any dates or agreements for Ms. Hilton to appear on any talk show," attorneys Michael Weinstein and Stephen J. Binhak said in court papers.

(Copyright 2009 by The Associated Press. All Rights Reserved.)


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