MESA, AZ (CelebrityAccess MediaWire) — Music fans in Arizona’s East Valley are calling foul after being duped in an elaborate multi-million dollar concert investment fraud.
The 18 local investors describe a scheme in which concert promoter Dezert Heat Entertainment and finance company TransCapital LLC took a series of loans to help stage and promote concerts nationwide for stars such as Tim McGraw, Faith Hill and Mariah Carey. The investors were invited backstage, given concert memorabilia, and taken to concert after-parties to create the illusion that they were part of the organization of the events.
The investors told a Maricopa County Superior Court that they believed they would be repaid with substantial interest from ticket revenue, but they weren’t and the investments were never used to promote concerts.
They claim they were the victims of an elaborate Ponzi scheme, with early investors being repaid with money from later investors until the scheme collapsed early this year. The collapse saw later investors owed millions of dollars, according to the East Valley Tribune.
In a separate suit, TransCapital LLC said they were also the victims of the scheme, which they claim was orchestrated by Dezert Heat and its principal Miko Wady.
The company’s owners, the Cundiff family, claim they solicited money in good faith from friends, plus invested their own money, and are now owed about $35 million by Wady.
“We understand how the investment groups could think at least initially how we could be involved, because they dealt with TransCapital,” Robert Mitchell, the Cundiffs’ attorney, told the paper. “We have met with other groups, and after explaining the situation to them, they have agreed to let us try to lead the charge to recover what we can (from Dezert Heat).”
The Cundiffs allege Wady purchased several luxury vehicles worth about $2.2 million, a boat and jet skis while doing business with TransCapital. Wady’s wife also bought properties in Chandler, Gilbert and Payson, Arizona.
The Cundiffs also claim Wady and Dezert Heat went to great lengths to create the impression they were real concert promoters, providing bogus contracts with artists and venues, insurance receipts, and copies of certified checks supposedly issued by Wady to concert-related vendors. Also, the suit says Wady provided TransCapital officials with backstage passes, memorabilia and other items.
The Cundiffs began to question Wady earlier this year because of delayed payments. They hired a former FBI agent and a former concert promoter to look into Dezert Heat, and said they learned about the fabricated documents and that Dezert Heat had not promoted any of the concerts. From those investigations, they concluded that Wady and Dezert Heat were running a Ponzi scheme, the suit said. –by CelebrityAccess Staff Writers