Former concert promoter of pop stars faces Miami trial on fraud charges | Miami Herald

After a long career as a pilot for TWA, Jack Utsick chased his dream to be a concert promoter. And for a decade or so, he seemed to be on top of the world, running both his business and life out of the Portofino condo tower overlooking Miami Beach.

He organized tours for Fleetwood Mac, Michael Jackson, Elton John and the Rolling Stones, to name a few, in the United States and Europe.

But by 2006, huge debts started piling up — millions of dollars that he owed to former colleagues in the airline industry who had invested in his business, Worldwide Entertainment.

In early February, the 73-year-old Utsick will face trial on fraud charges. He is accused of diverting millions from thousands of his investors in what authorities have described as a Ponzi scheme to pay for collector cars, a luxury condo, artwork and other personal expenses between 1996 and 2006. The Utsick case ranks among the largest financial schemes in South Florida, authorities say.

But in the eyes of Utsick’s daughter and attorneys, the one-time global concert promoter has been miscast by overzealous prosecutors and the FBI. His supporters say he always put his investors first and had no intention of fleecing them, as prosecutors contend.

“My father started this business from nothing,” Utsick’s daughter, Tanya Kugel, who lives in Palm Beach Gardens, said on Friday. “He had always dreamed of being a promoter and he succeeded. All he really cared about was making his investors money, and he was very frugal.”

The daughter said Utsick has been battling a litany of physical and mental health ailments since he was arrested in Brazil in 2013 and extradited to Miami in late 2014 on federal charges. Kugel said that her father, who was diagnosed with bipolar disorder and diabetes long ago, has suffered in detention because of poor treatment.

“They were not giving him the proper medication in Brazil and now that he’s back in the United States, the same thing is happening again,” Kugel said. “He’s deteriorating. He’s lost a lot of weight.”

Utsick — held at the Federal Detention Center in Miami — has no plans to fight his fraud charges with a “diminished capacity” defense based on his bipolar condition, as first suggested in court records. Defense attorneys asserted that his condition will be raised as an issue at trial because it affected his business and investment decisions. But they have no plans to call a psychiatric expert at trial to testify on how that condition affected his alleged intent to defraud investors.

Prosecutors John Gonsoulin and Ron Davidson already put the defense on notice that if Utsick’s attorneys pursued such a strategy, they would demand seeing all of Utsick’s psychiatric records dating back more than a decade.

Prosecutors also said that a psychologist with the U.S. Bureau of Prisons found Utsick “competent” to stand trial, although no formal hearing has been held.

Utsick’s defense team has had no luck with U.S. District Judge Cecilia Altonaga in seeking to block certain evidence at trial, including the impact of Utsick’s alleged theft on his investment victims. Among them: a couple who lost their home that was specially designed for their daughter, who suffers from autism and cerebral palsy.

Altonaga also allowed evidence of Utsick’s failure to file tax returns for several years during the period of his alleged criminal activity.

And lastly, the judge denied Utsick’s request to leave out evidence of his relocating to Brazil in 2007 rather than face a civil case brought by the Securities and Exchange Commission and the possibility of criminal charges. In her order, Altonaga cited the SEC case, which noted that Utsick “refused to appear for his deposition because he had relocated to Brazil and feared arrest should he return to the United States.”

But Utsick’s lawyers said he only left for Brazil because a court-appointed receiver who took over his company during the SEC lawsuit suggested he restart his business elsewhere.

Utsick’s company, Worldwide Entertainment, was placed in receivership while the SEC pursued the suit accusing him and his former partners, Donna and Robert Yeager, of committing investment fraud.

Initially, investigators determined Utsick and the two former partners were selling unregistered securities to finance concerts featuring bands that included Santana, the Pretenders and Aerosmith, according to court records.

Then, Worldwide’s receiver said he discovered that Utsick was actually losing money on most venues, though he had been claiming to be earning millions of dollars each year — $112.5 million in 2005.

“What we were seeing was a Ponzi scheme,” receiver Michael Goldberg, a lawyer who was tracking down assets, told the Miami Herald in 2009.

In other words, he said, Utsick was using money from new investors to pay off old ones until the alleged scheme collapsed.

In all, the longtime promoter was accused of pocketing just over $4 million of the $300 million that some 3,300 investors put into his business over nearly a decade, according to the SEC’s suit. Goldberg said many of the investors knew Utsick from his days as a TWA pilot in the 1970s and lost their life savings.

In previous statements, Utsick blamed his financial problems on the rapid growth of his business and pledged to work to repay investors. His investors realized a return of 25 cents on the dollar, or about $60 million in total, Goldberg told the Herald in late 2014 after the defendant’s extradition to Miami. Goldberg is still seeking to recover funds.

In the SEC case, U.S. District Judge Paul Huck imposed a final settlement ruling, ordering Utsick to pay back about $4.1 million, plus interest. Utsick immediately appealed the ruling. Separately, the Yeagers settled with the SEC by paying back $7.5 million.

Utsick’s defense attorneys said that, contrary to the prosecution’s portrayal of him as a “fugitive” who fled to Brazil, the one-time concert promoter was simply trying to rebuild his life in South America and that he cooperated with the SEC and the receiver of his liquidated company.

“He voluntarily turned over control of his business to [the] receiver, agreed to a freeze of all his assets, and retained virtually nothing for himself,” said Miami attorney Lilly Ann Sanchez, who is representing Utsick along with Washington, D.C., lawyer Eric Lisann. “He cooperated with the SEC, and lived on minimal income from his pilot’s pension and Social Security.

“Now he is fighting for his life while spending three years in jail as the government tries to make a criminal case against him.”