NEW ORLEANS (CelebrityAccess) — Roland Von Kurnatowski, one of the former owners of the legendary New Orleans music club Tipitina’s, is facing a federal investigation amid accusations of financial fraud.
The allegations against Von Kurnatowski center on an investment fund, which originally traded U.S. Treasury bonds and treasury-linked derivatives, but which appears to have never been formally registered with financial regulators.
Several of the fund’s investors told WWL-TV that they have been questioned about the fund by agents from the Federal Bureau of Investigations.
According to local CBS affiliate WWL-TV, the fund, known as Bond Fund One, or BFI, initially paid high returns, but now, investors have taken Von Kurnatowksi to court after the fund stopped generating returns in 2017 and then stopped providing statements in 2018.
Von Kurnatowksi said he diverted funds from BFI to several real estate investments, including a $6 million to music co-ops used by his nonprofit Tipitina’s Foundation, and $13 million invested in a refurbishment of the Orpheum Theater in New Orleans. However, investors said they were never informed that the fund was moving beyond investment in U.S. Treasuries, WWL-TV reported.
In a series of interviews with WWL, Von Kurnatowski said his ability to repay investors has been hindered by the dissolution of his business partnership with Eric George.
However, George, who provided capital to Von Kurnatowksi in a 50/50 partnership characterized things differently, noting that his business relationship with Von Kurnatowksi came unraveled due to some of Von Kurnatowski’s business decisions, including failure to pay creditors.
“We discovered that there were a lot of unpaid bills, that there were a lot of people who didn’t feel they were compensated fairly for the services they provided,” George told WWL-TV. “At the end, I feel like there were some things that he represented to me that were not true.”
Von Kurnatowski’s nonprofit Tipitina’s Foundation has also come under scrutiny, amid reports that Von Kurnatowksi appointed businessmen to its board of directors without informing them. There are also allegations of financial misconduct for the foundation, including audits that appear to indicate that foundation owed rent to and carried debt for Von Kurnatowski’s for-profit companies.
Kurnatowksi refuted this, telling WWL-TV that the rent charges were waived with he and his wife donation $2.4 million the foundation between 2011 and 2015.