If you're a frequent visitor to Instagram, you may have encountered content from Dan Bilzerian. He typically posts himself living a lavish lifestyle, full of private jets, massive parties, fancy cars, and beautiful women. He describes himself as a poker player, an actor, and a venture capitalist and has been featured in Playboy, Penthouse, and The Howard Stern Radio Show.
Dan also runs a cannabis and lifestyle brand company called Ignite International Brands Ltd. The company, formerly operating in Los Angeles and now based in Canada, used to be available on the stock market and, per company filings, is doing quite well.
Yet there's a slight problem: According to the Central District of California U.S. Attorney's Office, Ignite is actually run by Dan's father, Paul Bilzerian. Paul is a noted corporate takeover specialist — and convicted felon who also owes the U.S. Securities and Exchange Commission (SEC) more than $180 million.
(Photo by Jerod Harris/Getty Images for Ignite International Brands, Ltd.)
The U.S. Attorney's Office alleges the elder Bilzerian has cheated Ingite investors out of money. Bilzerian, his long-time accountant Scott Rohleder, and the company were all charged with one count of conspiracy to defraud the United States and one count of conspiracy to commit wire fraud and securities fraud. Bilzerian and the company were also charged with four counts of wire fraud. Rohleder received three wire fraud charges and three counts of assisting with preparing false tax returns.
Bilzerian has a wild and crazy history of running Ponzi schemes and misleading investors. Back in 1989, the SEC brought a civil action against him, and he spent four years in jail. After those four years, the SEC sought $62,337,600 from civil judgments. Bilzerian has avoided payments ever since, even after a federal court appointed a receiver to collect the assets in 2000.
To summarize, for more than 30 years, Bilzerian has essentially not paid the government. The SEC has received about $547,000; thanks to interest, the judgments are now worth north of $180 million.
For the past six years, Bilzerian has been operating shell companies, including International Investments Ltd. With the help of Rohleder, Bilzerian has funneled money between accounts and hidden his role in running the companies. While doing that, he publicly told the courts he was indigent—in other words, too poor to even afford basic life necessities.
Obviously, that wasn't the case.
The defendants also sent out press releases that classified Bilzerian and Rohleder as "unpaid consultants" and disclosed false sales figures by including unsold inventory. When an auditor looked into the inventory, Bilzerian "sold" about $4.63 million to one of his other shell companies.
U.S. Attorney Martin Estrada said, "This indictment alleges a long-running pattern of criminal behavior to avoid a regulator's judgment, mislead investors, and cheat the IRS."
Bilzerian and Rohleder still need to go to trial — they haven't yet been convicted. If they're found guilty, they will face a statutory maximum sentence of five years in federal prison per conspiracy count and up to 20 years for each wire fraud count. Rohleder could also get up to three years for every tax fraud count.
Like his son, Paul Bilzerian seemed to relish living a fast lifestyle. It appears to have finally caught up to him.
