Judge orders accounting of Mob Experience finances
Infighting is escalating among Las Vegas Mob Experience investors, with a judge now stepping in to order that an accounting of its finances be conducted.
Clark County District Court Judge Gloria Sturman, in a temporary restraining order signed Tuesday, also ordered that any property of the Mob Experience that had been removed be returned to the attraction at the Tropicana Las Vegas resort.
This includes artifacts, company records, artwork, furnishings and fixtures.
Sturman issued the restraining order at the request of Mob Experience developer Jay Bloom, who this summer removed himself from the business as part of an arrangement in which investors stepped in to provide financing to keep the attraction afloat.
Bloom now claims he was defrauded by Mob Experience investors, lenders and a former partner, Louis Ventre, who has been running the attraction. Bloom claims they induced him to leave under false pretenses.
Sturman signed the restraining order after being presented with an "ex parte," or one-sided application by Bloom’s attorneys. The order requires an accounting of all transactions during Ventre's time managing the attraction.
The Mob Experience and its financial backers apparently didn’t have a chance to argue against the restraining order, but they’ll have that chance during a Sept. 30 hearing on whether to extend the restraining order with a preliminary injunction.
Bloom’s attorneys with the Las Vegas law firm Maier Gutierrez argued in the temporary restraining order that on Sept. 9, after closing part of the Experience and laying off more than 60 employees, Ventre and financial backers to the attraction placed certain artifacts for sale on eBay. These artifacts are owned by a third company, The Mafia Collection, Bloom’s filing said.
This was done without the consent of key Mob Experience investors, his filing said.
During the preliminary injunction hearing, Bloom’s attorneys are likely to argue that Ventre should be removed from the Experience and replaced as manager by a neutral third party selected by creditors.
Bloom accused Ventre and financial backers Vion Operations LLC and Strategic Funding Source Inc. of "looting" the company and its assets – the same charges Vion and Strategic have leveled at Bloom.
The request for a temporary restraining order included numerous affidavits from former employees and disgruntled investors agreeing Bloom should be reinstated and Ventre should be removed from the company – as well as screen grabs from eBay showing artifacts associated with the late gangster Anthony Spilotro being offered for sale.
Spence Johnston, a spokesman for the Mob Experience, said Wednesday he couldn’t comment on the restraining order because the company was unaware of it.
But he said the Spilotro items had been returned to Spilotro’s son Vincent after Bloom failed to pay Vincent Spilotro – and if Vincent Spilotro is selling them on eBay that’s something that does not involve the Mob Experience.
In a motion for partial summary judgment filed this week in a lawsuit pending against Bloom, Vion and Strategic Funding Source asked the court to find Bloom owes them $4 million under an arrangement in which they purchased $4.092 million in the Mob Experience’s future receipts including credit card receipts. The price was $3.147 million.
The Mob Experience has only paid these factoring companies about $86,000 under the February agreement signed by Bloom, the lawsuit says.
It claims Bloom provided false financial information about the Experience in order to induce Vion and Strategic into buying the future receipts.
"This case involves a businessman, defendant Jay Bloom, who misappropriated hundreds of thousands of dollars from the Mob Experience," their court filing said. "Bloom provided plaintiffs with false and inaccurate financial information in an effort to induce plaintiffs to enter a business agreement and he then diverted those funds intended for Murder Inc. (the Experience’s parent company) for his own personal use."
While Vion and Strategic Funding call themselves creditors of the Mob Experience, Bloom said in a statement Wednesday that Strategic and Vion are not creditors of the Mob Experience.
"They are two factoring companies that partnered, which means they bought a percentage of future cash flow of the Mob Experience. At no time did they hold notes or any other debts of the company. The true creditors of the company have joined me in calling for Ventre's immediate removal, and the appointment of a third-party management company," Bloom said in his statement.
When Bloom stepped away from the Mob Experience this summer, he signed an agreement transferring 95 percent of his stake in the business to lender/investor GC-Global Capital Corp. of Toronto, court records show. That deal was made to induce investors to put up additional money to keep the Experience afloat, records show.
But in his statement Wednesday, Bloom said: "There never was new ownership. Eagle Group Holdings (Bloom’s company) is and always has been the owner. Any representation to the contrary is false."
"I was not ousted at all, as has been erroneously reported. As owner and irrevocable manager, nobody had the authority to 'oust' me. I voluntary resigned in favor of bringing in permanent professional management for the operations. Lou Ventre was supposed to be there for a few weeks while we brought professional management in for the operations, and it has become apparent that he has abused his position and overstayed his role," Bloom said in his statement.