A notorious corporate raider with a history of convictions, along with his trusted accountant and a vaping company, has been hit with a federal indictment on multiple charges, the Justice Department announced. The charges include conspiracy to defraud the United States, wire fraud, securities fraud, and assisting with the preparation of false tax returns.
Paul A. Bilzerian, age 74, is facing the music once more after his previous conviction in 1989 for securities fraud. This time around, he's joined by Scott Rohleder, age 61, his longtime accountant and former CFO of Ignite International Brands Ltd., the cannabis company at the center of these allegations. According to the Justice Department, the trio is accused of a conspiracy that aimed to evade a judgment demanded by the U.S. Securities and Exchange Commission (SEC), which with interest, now exceeds a staggering $180 million.
The indictment details how Bilzerian, reportedly already in contempt of court for ignoring the SEC's past judgment, operated numerous shell companies to funnel his money and hold on to his wealth, all the while presenting himself as penniless. The end game was to keep funding Ignite, a company ostensibly led by Bilzerian's glamorous, social-media-influencer son (identified only as "D.B."), but effectively controlled by Bilzerian himself. "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 in a statement obtained by the Justice Department.
Intriguingly, Ignite's public face was D.B., Bilzerian's son, whose high-rolling lifestyle painted a picture of success. In the backdrop, Paul Bilzerian and Rohleder manipulated the company's operations and finances, and when federal law enforcement caught on, deflected by labeling their roles as mere consultants. The defendants are also accused of inflating Ignite's revenue reports, with Rohleder assisting Bilzerian to cook the books on unsold inventory, causing a sharp rise in Ignite's share prices, hence, cheating investors. "These individuals will now face justice for fraudulently profiting from this elaborate scheme and hopefully the public’s trust in a fair market will be restored," said Akil Davis, Assistant Director in Charge of the FBI Los Angeles Field Office
Moreover, Rohleder's role extended beyond company finances to personal tax evasion, allegedly misrepresenting D.B.'s grandiose Las Vegas home as a rental property on tax returns and manipulating stock sale categorizations to lower tax liabilities. These actions prompted Special Agent in Charge Tyler Hatcher of IRS Criminal Investigation to remark, "Playing a shell game with money may work in the short term, but IRS Criminal Investigation is the best in the business at following the trail that money always leaves."
As the case unfolds, the SEC has paralleled the indictment with its own civil charges related to the case. With the FBI and IRS Criminal Investigation at the helm of this investigation, Bilzerian and Rohleder could be looking at a lengthy return to federal prison if convicted of all charges. With the promised rigor of federal law enforcement, this could be a defining moment for accountability in the volatile intersection of social media influence and corporate governance.
