ATLANTA (CN) — A panel of the 11th Circuit on Monday unanimously upheld an 18-year prison sentence and restitution order handed down by a Florida federal judge to a former high-profile concert promoter who ran a $207 million Ponzi scheme.
Known internationally for staging shows by artists including David Bowie, the Rolling Stones and Britney Spears, John Utsick pleaded guilty in June 2016 to a mail fraud charge for using his Miami Beach concert promotion firm to defraud thousands of investors.
In a 29-page ruling issued Monday afternoon, the 11th Circuit struck down arguments raised by Utsick that his sentence and a restitution order requiring him to pay $169 million to the victims of his scam violate an extradition treaty with Brazil. The panel also rejected Utsick’s claim that his guilty plea was not made voluntarily.
According to the ruling, Utsick admitted in his plea agreement that, beginning in 1996, he told investors in his entertainment companies — Worldwide Entertainment Inc. and The Entertainment Group Fund — that he would use their money to invest in concerts, tours and other entertainment opportunities. Utsick promised investors they would receive the greater of guaranteed 10% returns or shares of the profits from concert ventures.
His misrepresentations garnered him more than $253 million in investments from nearly 3,000 individuals, many of whom had pulled large sums of money from their retirement accounts. Instead of a true return on their investment, the victims of Utsick’s scheme received falsified statements claiming they were getting double-digit returns.
In reality, the two businesses were losing money. By mid-2005, Utsick and his companies owed investors hundreds of millions of dollars. Utsick also lost millions of dollars of investor money in stock options trading.
Utsick’s legal troubles began when he was sued in 2006 by the Securities and Exchange Commission for selling unregistered securities to thousands of investors. A federal judge ruled that Utsick was liable for violating securities laws and ordered him to disgorge more than $4 million in funds.
The ruling led to the appointment of a receiver to sell and reorganize the companies’ assets to repay investors. The receiver quickly realized Worldwide Entertainment was operating as a fraud and determined that the unpaid balance owed to investors stood at $169 million.
Utsick fled to Brazil, where he was jailed and extradited to the U.S. in 2014.
Although Utsick specifically agreed in the plea agreement to pay $169 million in restitution, he nevertheless challenged the restitution order on appeal.
Writing on behalf of the panel, U.S. Circuit Judge Stanley Marcus opined that there “can be no doubt that Utsick agreed to the restitution amount the district court ordered.”
“What’s more, our review of the treaty and the extradition order reveals nothing in there or anywhere else that barred the amount of restitution that could be set as punishment for his crime,” the Bill Clinton appointee wrote.
The district court’s denial of Utsick’s motion to exclude evidence of his misconduct before November 30, 2005 — the cut-off date for the statute of limitations — was similarly upheld.
“Neither the treaty, the Brazilian court’s judgment or order, the rule of specialty, Utsick’s indictment, his plea agreement, or anything else limited the relevant conduct the district court could consider in imposing sentence,” the ruling explains.
The panel also rebuffed Utsick’s complaint that his 220-month sentence violates the treaty because it is “effectively a life sentence” for the 78-year-old. The ruling points out that the treaty only limits circumstances in which the death penalty will be imposed, not a life sentence.
The 11th Circuit found there is “no basis” to rule that the district court was wrong in determining that Utsick was competent and that his guilty plea was voluntary.
“Nothing in the record suggests any confusion or lack of understanding on Utsick’s part about his intention to plead guilty or his acceptance of his own bargained-for sentencing consequences,” the ruling states. “The record fully reflects that Utsick agreed to be sentenced subject to a 20-year maximum term, and his 220-month sentence is near the low end of his agreed-upon 210-to-240-month range.”
Marcus was joined on the panel by U.S. Circuit Judge Kevin Newsom, a Trump appointee, and U.S. District Judge Virginia Covington, sitting by designation from the Middle District of Florida.
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