Did Instagram Bro Hero Dan Bilzerian Get His Start Thanks to His Father's Dirty Money?
The myth of Dan Bilzerian, the self-made Instagram king who lives the way you want to live, is just that: a myth.
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Dan Bilzerian is one of those celebrities whose fame is difficult to comprehend. The best way to "get" him is to join his nearly 12 million million Instagram followers and dive into photos of the bearded, barrel-chested man debarking private jets with topless women, sitting on a throne next to a lion, diving into a pristine sea while a yacht can be seen in the background, and walking pensively through the woods with an assault rifle. And that's just in one scroll.
His feed is basically lifestyle porn for dudes who measure success in terms of women, weapons, and wealth—men who fantasize about racing fast cars, playing poker professionally, and working as a stuntman, all of which Bilzerian has done. He's the kind of guy who books himself a nightclub appearance and says it's part of his (fake) campaign for president. He's the kind of guy who claims to have partied so hard that he's had two heart attacks before the age of 35. He's the kind of guy who tries to trademark his own face—literally, he filled out an application to trademark "a portrait of Dan Bilzerian in a rectangular frame, with the stylized wording 'GOAT' located in the bottom portion of the rectangular frame below," on June 19.
Except that's not precisely accurate. The trademark was actually applied for by Blitz NV, a limited liability corporation (LLC) registered in Las Vegas. According to public records, Blitz NV, LLC, is owned by Goat Works, LLC, which is located in Montana and is owned by Dan Bilzerian (view a screen grab of the company's listing in Montana here). Which is to say that Dan Bilzerian is the kind of guy who owns a company that owns another company that trademarks its owner's owner's face.
In short, Bilzerian's public image is based on the fact that he has a lot of money and spends that money the way a badass 14-year-old might. In his world, or at least on his Instagram, first you get the money, then you get the things, then you get famous for having the things, then you turn that fame into more money. It is, essentially, a perpetual status machine that is probably very, very fun to own and operate.
But how did that perpetual status machine get jump-started?
If you ask Bilzerian, the short answer is poker. In a 2013 interview with the Daily Dot, Bilzerian said he started playing the game seriously in college. "I went broke after sophomore year, gambled away all my money, sold some guns, turned $750 into $10,000, flew to Vegas, turned ten thou into $187,000," he explained. That same year, the Daily Mail described him as a "poker champion worth $100m," a figure that has echoed around the internet ever since.
But there's at least one other reason Dan Bilzerian has made so much money: He had a ton of it to begin with. And that money wasn't exactly clean. Public records reveal that Dan Bilzerian has been a party to a byzantine network of corporations, companies, and other business formulations designed to protect the assets of his white-collar criminal father Paul Bilzerian from the government, and that the 34-year-old Instagram star has been a beneficiary of trusts established by his old man in the 90s—at a time when dad owed tens of millions of dollars to the feds.
The American dream, more or less, right?
In an interview with the Wall Street Journal last year, Dan Bilzerian acknowledged that he did inherit some money in a trust from his father—a corporate raider and felon who in 1993 was slapped with $62 million in fines by the Securities and Exchange Commission (SEC) for fraud and as of 2014 had only paid back $3.7 million of it. But Dan "decline[d] to say how much or what role it had in kick-starting his career." In that same interview, he claimed to have made $50 million from poker in a little over a year.
Speaking to ALL IN magazine, Bilzerian—who, through a representative, declined to comment for this article—repeated this statistic. "If you look at poker as a sport like baseball," he said, "then I'd be maybe a minor league or high school ballplayer. But I play with T-ballers. If you look at poker like a business, I'd say I'm fuckin' Bill Gates. I've won over 50 million dollars playing poker. Who the fuck else has done that?"
Paul Bilzerian certainly didn't. The man made his fortune in the 1980s as a corporate raider, engaging in various tactics to artificially drive up the price of companies in which he had a stake and raking in a tremendous profit in the process. In 1989, he was convicted of fraud and served 13 months in federal prison.
In 1991, the elder Bilzerian filed for bankruptcy in the state of Florida. Two years later, the SEC told him he owed $62 million, which he claimed he couldn't pay because he didn't have any cash. Over the following two decades, the SEC has continued to chase Paul Bilzerian in a maddening game of financial and legal cat-and-mouse in which the mouse is always a step—or five—ahead. At its most extreme, this dance found Paul Bilzerian declaring bankruptcy and then going to jail for refusing to admit he was lying about his finances.
Deborah Meshulam, the receiver in the SEC's case against Paul Bilzerian, declined to comment on the status of the agency's quest to recover its money, and an SEC spokesperson also declined to comment, citing the fact that all investigations are private.
Still, as a Florida judge put it in 2001, "Between 1994 and 1999, Bilzerian transferred his substantial assets into a complex ownership structure of off-shore trusts and family-owned companies and partnerships. It is clear that he did this purposefully to insulate his assets from the reach of his creditors."
The web of assets that Paul Bilzerian wove in the 90s is extremely intricate. If you're inclined, you can look at numerous SEC filings, like this one or this one, which are complicated to the point of essentially being written in code. If you manage to decipher them, you can find stuff out like this: In 1995, Paul Bilzerian and his wife, Terri Steffen, established the Paul A. Bilzerian and Terri L. Steffen Family Trust of 1995, which was the limited partner of Overseas Holdings Limited Partnership, which was owned by another entity called Overseas Holding Company. Overseas Holdings Limited Partnership owned stake in Cimetrix, a Utah software company of which Bilzerian was once president. So Bilzerian could move the money he technically didn't have around, like when Overseas Holding Company "borrowed" $90,000 from Bicoastal Holding Company, whose sole stockholder was... Terri Steffen.
Meanwhile, Cimetrix's SEC filings note that in 1999, the company paid Paul Bilzerian a salary of $10,000 per month. He was paid through Bicoastal, and provided with a rent-free apartment, a monthly $1,500 allowance, as well as "reimbursement for reasonable travel expenses." Meanwhile, Bicoastal would often sell its shares of Cimetrix stock, generating funds for Steffen.
When I reached out to Cimetrix about the Bilzerian family's involvement in the company, a spokesperson told me they had no idea who Paul Bilzerian was.
SEC filings also show that Paul Bilzerian established an irrevocable trust for his two children, Dan and his younger brother Adam (who is also a well-known poker player). In 2001, a judge noted that this trust was one of many means through which Paul "appear[ed] to be attempting to hide his assets." A Paul Bilzerian bankruptcy judgment, also from 2001, indicated that in 1997, the Bilzerian sons' trust was worth roughly $11.96 million in Cimetrix stock. Dan was entitled to half of that.
It's hard to definitively prove that Dan Bilzerian's trust fund is made up of money that belongs to the SEC, but all signs point to that.
"Transfers of assets to family members for well less than their market value have, for centuries, been marked as 'badges of fraud,'" said Brad Miller, a former US congressman from North Carolina who worked on financial reform in Congress after shit hit the fan in 2008. "When the guy who has all the assets is suddenly poor but his wife and kids are suddenly rich and he says, 'I don't have a pot to pee in, but I have a very generous wife and sons who will keep me from sleeping under a bridge,'" Miller explained, there's probably something sketchy going on. In this case, Paul Bilzerian was likely hiding money he didn't want to pay the SEC by giving some of it to his wife and putting the rest of it in a bunch of companies and trusts and whatnot.
Though Dan and Adam's trust was eventually forced to surrender roughly 30 percent of its assets to the SEC, in February 2014, a judge granted Dan Bilzerian permission to sell 1.7 million Cimetrix shares (view a screen grab of the court document's relevant information here). Shortly before that, he posted an Instagram photo with the caption, "I bought this house in Montana yesterday, I haven't seen it yet, but the pics look sick."
From April 2007 until this past January, Dan Bilzerian was listed as the president, secretary, treasurer, and director of Caligula Corporation, which was subject to administrative dissolution by the Florida Secretary of State in 2013 for failing to file an annual report. Caligula was formed in 2005 by Terri Steffen, who according to corporate filings, handed the role of principal over to Adam, the brother, in 2006. A year later, Adam gave the corporation to Dan. According to its Florida corporate profile, at no point did it belong to their father, Paul. However, a 2009 bankruptcy filing by National Gold Exchange—a company with which Paul Bilzerian did business—referred to Caligula as being "controlled by Paul Bilzerian." Meanwhile, a 2010 lawsuit filed by a former Bilzerian family lawyer against them alleged that by 2007, Caligula was "owned by Dan (but operated by [Paul] Bilzerian)." The implication was that Paul Bilzerian was using Caligula as a vessel through which he could safely conduct business.
According to a ruling in a 2009 civil suit filed by the SEC against Paul Bilzerian, "[Paul] Bilzerian does appear to have some involvement in Caligula" and the agency had suspicions he'd spurred a lawsuit on Caligula's part against National Gold Exchange. This would have been a violation of a 2001 ruling barring Paul from taking legal action without the court's approval. Additionally, the judge noted that Caligula had listed "either Bilzerian's wife... or his sons Adam or Dan Bilzerian as the President, Secretary, Treasurer, and registered agents of the Caligula Corporation at various times."
During that time, Dan, Paul Bilzerian's former lawyer David Hammer, and Caligula entered into a partnership called Haircut Partners, LLP, in an attempt to collect debts from Bicoastal Holding Company, one of Paul Bilzerian's companies, by forcing it into involuntary bankruptcy. (Remember, they were one of the entities involved in Cimetrix.) In 2010, a judge wrote in a Florida court decision regarding Bilzerian's misuse of Haircut, "the fact that Haircut was formed by Bilzerian's son, his son's corporation, and his former attorney raises the Court's suspicion that Haircut is in active concert or participation with Bilzerian." When I called Hammer asking to discuss the Bilzerian family finances, he vehemently declined to comment.
It's alleged schemes like this—along with the trust and the vast, confusing interconnected network of Bilzerian financial affairs—that led one lawyer to write that the family's finances were "like an onion, the more layers you peel down, the more it stinks and makes you cry."
It should be said that the Bilzerian family's financial trickery is less a testament to some unique evil on their part and more to their taking advantage of the convoluted and often unenforceable rules and regulations governing the financial world. "Even with highly public figures, it's virtually impossible to figure out where their money is," said Edward Siedle, a former SEC lawyer who now works as a private financial investigator. "Wall Street has moved to an unprecedented level of secrecy."
But the role of Dan Bilzerian in this thicket of deception is important. It turns the myth of Dan Bilzerian, the self-made, independent playboy who lives the way you want to live, into just that: a myth.
Follow Drew Millard on Twitter.
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