EXPLOSIVE “LIFE & DEATH” CHARGES FLY AS UNITED STATES FEDERAL COURT HEARS NEW VEGAS NIGHTLIFE SHOCKER
A shocking and massive $90 million lawsuit is underway in US federal Court with explosive allegations that will rock the Vegas nightlife industry, yet again. Filed a few days ago, it comes hard on the heels of the IRS raid on Pure nightclub and probes of its sister LAX new hotspot at the Luxor. This time it’s the “promotional marketing partners” of casino giant MGM Grand’s Studio 54 disco, its Tabu ultra lounge, the about to be opened Wet Republic pool club and an anticipated new nightspot this fall on the hotel’s newly planned “club row.” In a stunning 55-page damning document they are accused of a “dirty laundry list” of appalling allegations including “terrorizing tactics, and stolen confidential information” that puts world-famous DJ Tiesto in the center of an epic struggle and our beloved Napkin Nights photo-femmes in a bruising tug-of-war. It even extends outwards to the involvement of major corporations such as Pepsi and Bacardi with the nightclub promotions.
British nightlife baron Neil Moffitt, a Henderson resident, is singled out in the scandalous lawsuit. He runs Angel Music Group that also operates the Wednesday night parties in the Body English nightclub at the Hard Rock resort. His co-defendants all have Vegas connections: Nick McCabe, Jesse Angles, Anu Dhami, Isabel Piaggi and Dan Vidal. The plaintiffs in the chilling courtroom confrontation are Andrew Fox and Lee Heiman. Their attorney Larry Hutcher, with the prestigious New York law firm of Davidoff, Malito and Hutcher told me: “The legal process is moving forward and we expect the matter will be heard in New York Federal Court in six- to nine-months time. All of the corporate and business transactions took place in New York. We are now beginning all the pre-trial examinations and depositions.”
Ronald Richards, an attorney for Angel Music and Moffitt denies the allegations against both as “patently false and defamatory.” He had the complaints of threats of physical harm stricken from the court record.
However it’s clear from the original court filings that Fox and Heiman who owned TMG that originally employed and partnered with the defendants were “in fear of their lives.” They sought an urgent preliminary injunction and temporary restraining order against Moffitt and others “from assaulting, stalking, menacing, recklessly endangering, intimidating, threatening, annoying, contacting, communicating, slandering or defaming themselves, their wives, children and family members.” In his sworn statement to the court Fox said that not only were the defendants “seeking to destroy our business but my very life has been threatened. Simply put, Moffitt is a truly menacing figure and bully who has already physically assaulted me and threatened to destroy our business piece by piece. The threats of physical violence and campaign of harassment has been heinous conduct.”
He went on: “Our precious goodwill is being irreparably destroyed. We fear our very lives and that of our families may be endangered. We should not be compelled to live in a continuous state of fear and apprehension.”
At the first court hearing the defendants denied the allegations but agreed to a stipulation that “they would not solicit any competitive business, they would recognize the validity of all existing contracts and that there would be no concerns about the plaintiff’s physical well-being” according to attorney Hutcher.
Fox and Heiman’s TMG company that also owned Train Entertainment, ClubPlanet.com and Wanticket.com amongst many others, is regarded as one of the world’s leading online nightlife marketing and promotional operations. “Think what Ticketmaster is to the live concert and show business and that’s what TMG is for nightclubs around the world.” I was told. “They book the music and the DJs, they sell the tickets, they get the sponsors—it’s a one-stop super shop for controlling nightlife.”
In August 2005 Fox and Heiman allegedly began working together with Moffitt and in May 2006 became acquisition partners of his Angel Music Group. However the lawsuit claims grossly abused expense accounts, unknown “hidden” debts and misappropriated funds in excess of $1 million were discovered and five-months later losses totaled in excess of $1 million. “The merger turned into a nightmare. We even had to pay a Vegas landlord another $47,000 to terminate a lease for Angels office space” claimed Fox and Heiman who went on to say the defendants “stole their employees” and used “confidential marketing information” to take away its Pepsi Cola and Bacardi accounts. They also claimed that DJ Tiesto, who regularly performs in Vegas was “stolen” representing another $1 million loss in revenues. They further claimed that “we sought to acquire Napkin Nights” (a nightclub photo-agency hq’d in Vegas) but the defendants solicited them and eventually “stole” five of our key employees in violation of confidentiality agreements.
Now Fox and Heiman are seeking $90 million in compensation and punitive damages in nine different allegations against Moffitt’s Angel Music Group, which is described as an entertainment event management company for dance music groups and deejays.
This is now the second time in two years that MGM finds itself embroiled in a financially messy situation with their nightclub operations. Two-years ago the company “fired” several employees in a reshuffling of its nightlife operations that resulted in an internal audit to prevent similar future problems. Several Tabú employees have stated that they have been fired since Angel Music got involved at MGM.
However MGM spokesman, Gordon Absher, VP of Public Affairs told Luxe Life: “AMG is a promotional/marketing partner and they do not manage operations. MGM Mirage owns and operates our nightclub venues at MGM. Vendors do not have hiring authority for MGM Mirage employees.” But a nightlife expert told Luxe Life: “That’s the real grey area. VIP and Promotion are the lifeblood of nightlife and if they don’t think a property’s team members are right to make the money they get to bring in their own.”
Meantime our colleague Xania Woodman posted the full story on her LV Circuit website yesterday (MON) and commented: “Life in Clubland isn’t all sparkler service and block rocking beats. Sometimes it can get downright ugly.” Xania says that a stellar list of Vegas nightlife major names has joined Angels ever-expanding presence at MGM.
Luxe Life will monitor the lawsuit as it proceeds but however it all winds up there is no denying that the allegations alone are yet another “black mark” on our nightlife. Enough is enough already! I love this city. I love its entertainment and nightlife. We all helped build it into the world’s No. 1 dining destination. We all enthusiastically supported the amazing expansion of nightclubs and ultra lounges as an entertainment companion component to the world’s top entertainment, headliners and spectacular production shows. We’ve been amongst the biggest boosters on television, in print and on the Internet. Luxe Life has diligently supported and promoted the nightclub industry without any quid-pro-quo.
But it’s all become an absolute tragedy of the first order: the claims of “line-fishing,” gouging, greed and graft that are threatening the very future of the world’s No. 1 nightlife playground. While we await the results of the IRS ongoing probe against Pure Management Group the courts will hear as many as five cases or more against Vegas nightclubs and their staff. First up the terrible story of a San Francisco firefighter who claims his leg was broken and twisted over his shoulders by Rumjungle security guards at Mandalay Bay. Then in June and July court cases brought by Pure customers—one of which makes allegations of a beating in the Caesars Palace property.
This is all disgraceful and disgusting. The stories we’ve heard will make your stomach churn. It is a blight on our city. It is a situation that must end immediately. Accordingly, just as the casino industry has its Gaming Control Board to ensure ethics of honesty and fairness we’re going to lead the call for a Nightlife Control Board to end this out-of-control behavior for once and for all. The shakedowns must end. The gouging must end. The violence and threats must end. Clubs, managers and staffs must conform with the IRS Tip Compliance Regulations so everything is on the up and up and we can point with pride to the hospitality industry rather than hang our heads in shame over this seemingly escalating sad situation.
Both George Maloof at the Palms and Steve Wynn at his resort planned in advance for any possible nightclub irregularities. George told me “We know what’s right and what is wrong. We guard against any problems. We fill out the IRS compliance forms each night and the cash is counted under the cameras and recorded so everything is above board and accurate.” Steve said: “We majority own and operate our nightclub venues with partners and we comply fully with all casino regulations to prevent problems. We don’t even allow it to get started in the first place.”
So now every other “player” in town must agree to get in step with them. There has to be proper “clear and transparent” accountability along with a code of ethics where our valued visitors—the very lifeblood of our tourist-based city—enjoy the nightlife experience instead of file court-cases against it.
Lets get it right now—and fast—before the wretched behavior of a few brings down an entire industry. Hopefully some of you out there will agree that unfortunately the time has come for Nightlife Control Board. I only have the best interests of the future of the Vegas nightlife industry at heart as well as a wholesome interest in the industry remaining honest and wholly hospitable. Thank you!