EXCLUSIVE: The would-be mogul posted a $4 millon bond, then set about helping to conceive the winning bid to acquire Miramax from Disney
David Bergstein, the troubled Hollywood financier whose credits include — oddly enough — helping orchestrate the recent sale of Miramax, was arrested in Florida last November over bad checks and unpaid gambling debts involving multiple Las Vegas casinos, TheWrap has learned.
Though one set of fraud charges was dismissed after Bergstein moved to make good, the arrest — Bergstein’s secret until now — is the first public indication of criminality in the unfolding Hollywood saga of his calamitous personal and professional lives.
All totaled, he allegedly stiffed casinos for almost $3 million in recent years.
Bergstein reacted angrily Tuesday to a message left by TheWrap, describing this story on his home phone.
“Lose my f—ing number,” he demanded after calling back. The message left on the residential number (taken from his arrest sheet) amounted to “harassing,” he said. Subsequent messages left on his cell phone and email were unanswered.
Bergstein was picked up Nov. 29, 2009, on a fugitive warrant in the port of Cape Canaveral — after returning from a Disney cruise — and jailed on $3.7 million bond by the Brevard County, Florida, Sheriff's Department, according to a copy of the arrest notice obtained by TheWrap.
By the next afternoon, he had walked free. “Fraud/Insuff. Funds,” the arrest records noted.
Until now, Bergstein was widely known to have stiffed only the Mandalay, which has doggedly pursued him in civil court for repayment of $1 million. But the felony fraud charges stemmed from bad checks that Bergstein allegedly floated at a widening circle of casinos.
His Florida arrest specifically involved worthless checks written to the Wynn and Venetian casinos, Bernie Zadrowski, chief deputy prospector of Clark County District Attorney (Las Vegas), which issued the arrest warrant in July 2009, told TheWrap.
Over 41 days, from March 5, 2008, to April 15, Bergstein cashed nine worthless checks totaling $925,000, according to Clark County district court records of a Wynn lawsuit against Bergstein. The records indicate that he paid the debt down to almost $633,000 but then stopped the repayments. In January, the court granted Wynn summary judgement, and the casino subsequently filed in Los Angeles County Superior Court to collect the debt in an action dubbed “judgement on sister-state judgement.”
The civil court records further show that Bergstein, who turned 48 on Monday, paid the judgement of more than $833,000, including interests and other costs, within just the past two to three weeks.
Wynn dropped the matter last month, apparently after restitution. The latest action in the matter — filing of a notice to, among other things, dismiss the case — occurred last week. Now Zadrowski, the senior Clark County prosecutor, indicates that the district attorney won’t pursue the criminal case further.
Zadrowski also explained how Bergstein had freed himself from the Florida jail with such seeming ease. Prosecutors essentially agreed to his release after he arranged to pay hundreds of thousands of dollars to the Clark County D.A.'s office toward restitution under a formal bad-check program. It's unclear the source of the money, which was rounded up literally overnight. In any case, the cash otherwise would have gone to Florida authorities as bail money.
The criminal case involving the Venetian, over $926,000 in bad checks, lingers over Bergstein, deputy prosecutor Zadrowski said — until he makes full restitution. So far, Bergstein is meeting a schedule to repay an unspecified sum, Zadrowski told TheWrap.
In recent years, Bergstein has left a wide swath of stiffed partners and filmmakers in his wake. In March, a bankruptcy filing was forced on him and his precarious business empire by an alliance of creditors.
But revelation of Bergstein’s incarceration underscores the Bergstein enigma. Even as his personal and professional life appeared to crumble in public, he emerged an improbable central figure in the victorious bid for Miramax, one of the more riveting recent Hollywood deals.
With a bid worth $660 million face value, an investor group lead by his erstwhile partner Ron Tutor, the construction magnate, triumphed in Disney’s auction of Miramax.
Back in the fall of 2009, Bergstein’s only thought related to Disney was a relaxing respite from his mounting troubles. What better escape that a cruise? According to the arrest records, he was nabbed at Terminal 8, Port Canaveral — home to Disney Magic, Disney Wonderand, coming next year, Disney Dream.
Editors Note, 8/11/2010: This story was originally labeled an "Exclusive"; however, many of the details of Bergstein's arrest were reported in a May issue of the Daily Journal, a legal trade publication in print. Two-plus days of reporting — including a normal course of searches for previous reports of Bergstein's arrest — did not turn up the Daily Journal's story, nor could it be found online after it was brought to our attention Wednesday by LAObserved. Nevertheless, we regret the oversight.
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