Paul A. Bilzerian was indicted Thursday by a federal judge in California for allegedly evading a decades-old debt to the US Securities and Exchange Commission that now exceeds $180 million.
Prosecutors say Bilzerian, described as a corporate takeover expert, avoided paying the judgment while running Ignite, a marijuana and lifestyle company allegedly helped by his social media son, Dan Bilzerian.
The elderly Bilzerian allegedly pooled millions of dollars of his assets through shell companies to finance Ignite, whose investors he allegedly defrauded, the Justice Department announced Friday.
“On paper, Ignite’s CEO was Bilzerian’s son DB – a professional poker player who became famous on social media for his lavish and extravagant lifestyle,” the US attorney’s office in LA said in a statement. “In effect, Bilzerian has exercised de facto control over the company.”
To avoid paying SEC judgments, prosecutors said, Bilzerian falsely represented that he was poor.
The case charges Bilzerian, 74; Ignite International Brands, a Canadian-based cannabis company; and Scott Rohleder, Bilzerian’s longtime accountant, with conspiracy to defraud the US, conspiracy to defraud and securities fraud and four counts of wire fraud.
Young Bilzerian has not been charged and is being identified only by his first names in his lawsuit.
Attorneys for the defendants could not be reached for comment. A hearing is scheduled for October 28.
“This case alleges a long-term pattern of criminal conduct to avoid the regulator’s judgment, mislead investors, and deceive the IRS,” US Atty. Martin Estrada said in a statement.
The most recent cases date back to 1989, when Bilzerian was convicted of securities fraud and tax evasion related to three failed takeover attempts. He was sentenced to four years in state prison, but ultimately served 13 months.
The SEC then filed a civil suit against Bilzerian and obtained a judgment of over $62 million in 1993.
In 2000, a federal court found Bilzerian in contempt and appointed a receiver to collect his assets, according to the U.S. attorney’s office in Los Angeles. The SEC received only about $547,000.
Now, with interest, the judgments exceed $180 million.
Prosecutors allege that, from December 2018 to September 2024, Bilzerian, Rohleder and Ignite conspired to prevent the SEC from collecting judgments. Bilzerian is said to have operated several shell companies, while hiding his interest in and control of those companies.
Bilzerian and Rohleder allegedly oversaw Ignite’s operations, strategy, marketing and fundraising, and held daily management meetings, according to the lawsuit. Bilzerian also influenced the hiring and firing decisions of Ignite’s officers and members of its board of directors.
After Bilzerian learned that state law enforcement was aware of his involvement with Ignite, the company issued a news release describing Bilzerian and Rohleder as “unpaid consultants,” according to the lawsuit.
Prosecutors also said the defendants misled Ignite investors by inflating sales figures.
If convicted of all charges, Bilzerian and Rohleder would face up to five years in federal prison on each conspiracy count and 20 years on each fraud count. Rohleder faces up to three years on each count of tax fraud.
On Friday, the SEC filed civil lawsuits against Bilzerian, Rohleder and Ignite regarding alleged facts in the criminal case.
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