Did the taxpayers bail out Rick and Lisa Rizzolo?

The Rizzolos may be stalling - waiting for Kirk Henry
to die so they can settle at ten cents on the dollar.
Meanwhile, new hidden assets are discovered.

INSIDE VEGAS by Steve Miller
AmericanMafia.com
August 17, 2009

LAS VEGAS - New information has surfaced regarding additional money allegedly being hid by the wife of convicted racketeer Rick Rizzolo.

Local mortgage brokers report that Lisa Rizzolo mortgaged the couple's million dollar Canyon Gate estate in October 2006, took a cash back for around $950,000, then put the money in off shore accounts so it cannot be accessed by creditors.

According to the couple's very questionable 2005 divorce, Lisa was given three houses; one in Las Vegas; another in Newport Beach; and the third in Chicago. All three were owned free and clear. Now, information has surfaced indicating Lisa placed a first mortgage on at least one of the properties, and the proceeds she received are not being reported.

According to the Clark County Recorder, Lisa filed the following document on October 4, 2006:
 

Record Date :   10/4/2006 4:34:00 PM  # of Pages:   1  Book Type:   OR  Book / Page:   0 / 0  Document Type:   (SUBREC) SUBSTITUTION/RECONVEYANCE  1st Party:   INDYMAC BANK FSB  2nd Party:   RIZZOLO, LISA  Parcel # 163-05-711-072

Real estate records indicate the INDYMAC first mortgage was arranged by asset protection lawyer John Dawson.

The mortgage was granted months before the Las Vegas residential real estate market began its free fall. The federal government seized INDYMAC in July 2008, twenty one months after the Rizzolos mortgaged their house. INDYMAC had the habit of making bogus loans.

In HENRY v. RIZZOLO Interrogatory No. 19, Page 11, an attorney for unpaid beating victim Kirk Henry asked Lisa to reveal: "...any creditors you have at the present time and the amount and terms of the debt along with any property which you claim is exempt from collection by Plaintiff or any other creditors." Ms. Rizzolo's response was "...there is also a Deed of Trust on the Real Property located at 8632 Canyon View Drive, Las Vegas , Nevada 89117 with a balance owed of approximately $950,000."

According to the 08/14/2009 Zillow.com, the  5 bedroom, 6 bath, 5,763 sq. ft. house located at 8632 Canyon View Drive on the Canyon Gate golf course in Las Vegas sold on 08/29/2006 for $735,000  to a trust owned by none other than Lisa Rizzolo!

The Clark County Assessor lists the seller as:

163-05-711-072  RIZZOLO LISA  20051108:05973  11/08/2005  NO STATUS  200  SUBDIVIDED LOT

and the buyer as:

163-05-711-072  RIZZOLO LISA M SEPARATE PPTY TR RIZZOLO LISA M TRS  20060829:06025  08/29/2006  NO STATUS  200  .37 AC

It appears the successor to INDYMAC -- the taxpayers -- took a $190,000 loss when Lisa sold the house to herself for less than she owed in what is called a "Short sale." It's not known whether Lisa has been making payments on the loan, and if so, where she's getting the funds?

In 2006, Rick Rizzolo plea bargained with federal prosecutors. He agreed to pay Kirk Henry $9 million dollars; $4.5 million to the IRS; $5 million to another defunct California bank; and the rest to assorted creditors in exchange for a light prison sentence. Rick served less than a year in federal prison, and since his release in 2007 has refused to pay any of his obligations by pleading poverty.

Even though he stiffed his creditors and can't afford an attorney, Rizzolo (LV Sun photo) is regularly seen at a new bar-restaurant called "Daddy Mac's Beach Grill" in Henderson. According to sources, Rizzolo is there every night dropping $100 bills into the poker machines while getting "blasted." My insider says Rick told him the other night that this is "his joint," and he is "partners" with the alleged owner Doug MacDonald, a former Piero's bartender. Piero's is one of Rizzolo's favorite haunts in Vegas, and its sister restaurant The Ritz is his known hangout in Newport Beach.

In the meantime, attorney John Dawson arranged for Lisa to stash all the couple's liquid assets in off shore accounts, and to transfer her real estate to a bunch of questionable trusts and LLC's.

Dawson also serves as the Resident Agent for the Crazy Horse Too's parent corporation, "THE POWER COMPANY, INC," and several other Rizzolo owned entities.
 

THE POWER COMPANY, INC. Business Entity Information    Status:   Active  File Date:   6/19/1972  Type:   Domestic Corporation Corp Number:   C1966-1972  Qualifying State:   NV List of Officers Due:   6/30/2008    Resident Agent Information    Name:   JOHN E. DAWSON, ESQ. Address 1: 300 S. FOURTH ST.  Address 2:   SUITE 1700 City:   LAS VEGAS  State:   NV Zip Code:   89101  https://esos.state.nv.us/SOSServices/AnonymousAccess/CorpSearch/CorpSearch.aspx

What I find most amazing is that Dawson's employer, Lionel Sawyer & Collins, 300 S. Fourth St., Las Vegas, allows him to associate with known criminals! This is the law firm that also employs the lawyer sons of United States Senate Majority Leader Harry Reid.

Is this a case of "Where there's smoke, there's fire?

The Rizzolos stashed their $6 million from mortgage cash backs in off shore accounts arranged by Dawson, the brother of United States Federal Court Judge Kent Dawson who was appointed for life by U.S. Senator Harry Reid (left), the business partner of Jay Brown who was a former Crazy Horse Too attorney and resident agent for the Power Company, a corporation owned by racketeer Rick Rizzolo. Judge Dawson presided over the trials of 15 Crazy Horse defendants, and let them all off with slaps on the wrist after they participated in years of beatings and robberies at the topless bar. During the trials, Judge Dawson also neglected to disclose that his brother was the attorney hiding the assets of the former employer of the 15 defendants.

Senator Reid should realize that he's being judged by the company he keeps.

This was the second time the Rizzolos took advantage of an about-to-fail California bank. On February 18, 2008, INSIDE VEGAS reported that the now defunct Security Pacific Bank placed a first mortgage on the couple's soon-to-be-seized topless bar, and loaned them $5 million dollars even though they had been previously warned of the impending seizure. Rick and Lisa did not pay one payment on the loan. Security Pacific was seized by the federal government in November 2008.

The only difference between the two questionable mortgages is that the government took possession of the asset used to secure the $5 million Security Pacific first mortgage  -- the Crazy Horse property, but has not yet seized the Canyon Gate mansion used to secure the $950,000 INDYMAC first mortgage.

Rizzolo foolishly used a different law firm, Patti & Sgro, to arrange the Crazy Horse mortgage, and he suffered the consequences. Rizzolo lost his most valuable asset.

However, the Rizzolos hired the best advisor available to help them hide the rest of their ill-gotten assets, John Dawson of Lionel Sawyer & Collins. By doing so, the couple has been able to retain the majority of their assets and cash. I broke the news of John and Kent Dawson's involvement in my September 10, 2007 INSIDE VEGAS column. The information I provided has gone unchallenged.

(John E. Dawson ~ Lionel, Sawyer & Collins ~ is a featured speaker at The Southpac Offshore Planning Institute ~ The 2009 Annual Conference ~ Encore at the Wynn Las Vegas, October 1 & 2, 2009. He will discuss "Domestic Asset Protection Trusts: Do They Really Work?" 1:30pm - 2:15pm ~ Thursday, October 1.  It's not known whether he will use the Rizzolo's case as an example of "Domestic Asset Protection Trusts: Do They Really Work?")

Two now-defunct California banks loaned the Rizzolos cash at a time when Rick's name was plastered all over the Nevada and California media for his racketeering activities. It was no secret when the loans were made that the couple was in deep financial trouble. Those shaky loans being made at such a time in a borrower's history has caused speculation among courthouse observers. Were several former bank loan officers bribed into approving the Rizzolo's loans?

"Based on our investigation and the information provided by RicRiz's representatives, we concluded that the allegations regarding Rizzolo's involvement in unspecified criminal activity were not verifiable, and that some of the rumors were affirmatively inaccurate. Accordingly, I and others recommended proceeding with the loan, which closed on November 3, 2005." - Gregory Alcala, 1st Vice President and Manager, Real Estate Loan Underwriting for Security Pacific Bank.

Was it a mere coincidence that two very troubled California banks saw the Rizzolos in the most favorable light?

Security Pacific (the taxpayers) did not receive one dime in repayment of the loan, and INDYMAC (the taxpayers) may suffer the same fate. In the meantime, the $6 million remains in the Rizzolo's hands.

INDYMAC and Security Pacific specialized in mortgages that were written for borrowers who weren't required to provide proof of their income and assets in order to get loans. The two banks obviously did not do their due diligence with the Rizzolos because they turned over the money to the couple months before, or soon after Rick began his well publicized prison sentence.

With ample liquid assets stashed off shore to pay all the Rizzolo's debts, U.S. Judge Philip Pro has set a hearing for September 15, 2009 at 10:30 AM to decide the next phase in this eight year long civil case.

At the hearing Judge Pro is expected to rule on whether the Rizzolos can continue to keep their hidden assets, or whether the assets should be seized to pay the couple's over $27 million in unpaid debts.

Either way, this case has already set records for how long criminals can remain in possession of ill-gotten assets hidden in off shore accounts.

Rick Rizzolo is expected to act as his own attorney at the hearing and request that the entire eight year long case be transferred back to state jurisdiction where he has friends in the Nevada Supreme Court and Clark County District Court. As a Pro Se litigant, he claims to have personally authored over a half dozen legal Motions (without once using the "F" word?) that must be decided by Judge Pro. However, many suspect that Rizzolo was not the actual author, and will soon hire new attorneys who will claim they need additional time to prepare his case thereby stalling the resolution for several more months.

Some observers speculate that because Kirk Henry has been a quadriplegic since 2001 when his neck was broken by one of the Rizzolo's employees, Rick Rizzolo wants to stall the case long enough for Henry to pass away, then attempt to settle with his family for dimes on the dollar.

Judge to rule on Rick Rizzolo's Pro Se Motions (in bold print):

Full docket text for document 163: MINUTE ORDER IN CHAMBERS of the Honorable Judge Philip M. Pro, on 8/5/2009. By Deputy Clerk: Donna Andrews. At the Motion Hearing set for 9/15/2009 at 10:30 AM, the Court will hear argument on the following additional motions: [153] Defendants' Objection to the Court's Order (#151) Granting Plaintiffs' Motion for Enlargement of Time; Defendants' Motion for Hearing to Stay Discovery Pending Decision on Dispostive Motions or Certification of Questions of Law to the Supreme Court of the State of Nevada; [160] Defendants' Notice of Plaintiffs' Failure to Join Indispensable Parties and Defendants; [161] Defendants' Motion to Dismiss Amended Complaint, Objection and Motion to Dismiss Second Amended Complaint, First Alternative Motion for Summary Judgment; Second Alternative Motion to Certify Questions of Law to the Supreme Court of the State of Nevada.

Hopefully, Judge Pro's patience is being tested and he will finally issue a ruling that brings justice to this protracted case during Kirk Henry's lifetime. Then we may finally learn if the taxpayers will get what they're owed in back taxes, interest, penalties, and the cost of bailing out banks that made questionable loans to racketeers.

Earlier this year, the Treasury Department and Federal Reserve took the bold step of committing more than $1 trillion in financing for loan purchases. According to CNNMoney.com, Treasury Secretary Tim Geithner last February detailed his plan to rescue the financial sector and "Help banks cleanse their holdings of 'toxic' assets to get private lending up and running again."

Are the two Rizzolo mortgages what Geithner meant by helping banks cleanse their holdings of toxic assets? Or are taxpayers being forced to cover certain bank's bad loans and let crooked borrowers hide the proceeds in off shore accounts? If so, this may be a perfect example of The Emergency Economic Stabilization Act of 2008 gone wrong.