Occasional high-stakes poker player and one-time 'King of Instagram' Dan Bilzerian faces a significant threat to his fortune and playboy lifestyle after the US Department of Justice indicted the cannabis company Bilzerian claims to own as part of a new case against his father, Paul Bilzerian, who was convicted of securities fraud in the early '90s and sentenced to four years in prison.
The elder Bilzerian was also fined more than $60 million, which has gone almost entirely unpaid. The one-time trader eventually renounced his US citizenship and moved to the Caribbean island nation of St. Kitts and Nevis. With that owed sum now north of $180 million due to decades of accrued interest, the DOJ has indicted the elder Bilzerian as being the shadow owner of Ignite, the Canada-based cannabis company that Dan Bilzerian claims to own and operate.
The indictment alleges that Paul Bilzerian, Ignite International Brands Ltd., and Bilzerian's long-time attorney, Scott Rohleder, conspired to evade the Securities and Exchange Commission (SEC) judgment against Paul Bilzerian while setting up Ignite's operations, which used to be based in Los Angeles. The DOJ asserts that the senior Bilzerian and Rohleder funneled some of Bilzerian's hidden offshore fortune through shadow companies to fund Ignite, and that Dan Bilzerian was a figurehead owner, with real control of the company's operations remaining with his father.
Paul Bilzerian, now 74, and Ignite as a corporate entity were charged with one count of conspiracy to commit wire fraud and securities fraud, and four counts of wire fraud. Rohleder, 61, a North Carolina-based accountant, was charged with one count of conspiracy to commit wire fraud and securities fraud, three counts of wire fraud, and three counts of assisting with the preparation of false tax returns.
Dan Bilzerian's tax returns involved in case
Dan Bilzerian claims to have made millions of dollars playing poker.The statement from the US Attorney's Office for the Central District of California asserts that Rohleder also falsified Dan Bilzerian's tax returns as part of the umbrella of deceit shielding Paul Bilzerian's ownership from exposure. The DOJ offered this regarding Dan Bilzerian, who is named as 'D.B.' in the indictment:
"Finally, Rohleder allegedly assisted in the preparation of D.B.’s tax returns, which included false and fraudulent representations that caused a tax loss of approximately $1,536,949 to the IRS for the tax years 2018 to 2020. Rohleder did so by falsely characterizing D.B.’s Las Vegas mansion, which he purchased in 2018 for $8.5 million, as a rental property. When listing D.B.’s personal address on the tax returns, Rohleder used an address corresponding to a hangar at Harry Reid International Airport. Rohleder also lied to D.B.’s tax preparer by stating that D.B.’s November 2018 sale of Ignite stock was a 'long-term' capital gain (to be taxed at a lower rate) instead of being a “short-term” capital gain, which would have resulted in a higher tax bill."
The mansion referred to is the same southwest Las Vegas property that Dan Bilzerian recently put on the market with an asking price of $25 million, more than triple what he paid for it six years earlier. Bilzerian was briefly a brand ambassador for GGPoker, but he and the company parted ways less than two years later after a string of controversial and embarrasing episodes involving the polarizing and hedonistic social-media figure.
Dan Bilzerian has always claimed the source of his fortune was massive success at high-stakes, underground poker games, While some pro players have spoken of his skill and major cash-game scores, others remain positive that his father's assumed hidden wealth was the true source of his fortune. That federal officials have been investigating Ignite and its ownership has been known for nearly two years.
Feds allege Ignite played shell games and defrauded investors
The indictment asserts that the senior Bilzerian and his long-time accountant defrauded Ignite's investors in several ways, with the Ignite cannabis enterprise being a vehicle for Paul Bilzerian to use his hidden fortune in US-based business opportunities. Prosecutors allege that in one instance in early 2021, at Paul Bilzerian's direction, Ignite issued a false and misleading business update that resulted in the tripling of the value of Ignite's corporate valuation, adding $84 million to its valuation.
The misleading valuation also involved Paul Bilzerian and Rohleder backdating a faked 'sale' of $4.63 million of vape products from 2021 into 2020 to a shell company that Paul Bilzerian controlled, appearing to inflate Ignite's bottom line.
“This indictment alleges a long-running pattern of criminal behavior to avoid a regulator’s judgment, mislead investors, and cheat the IRS,” said United States Attorney Martin Estrada. “My office will continue to use all tools available to protect investors and ensure the security of our nation’s economy.”
