Drugs & Deceit in Peter Morton Fraud Trial

Tarlton Morton takes the stand against her ex; at stake: $10M

Last Updated: April 13, 2009 @ 3:13 PM

Though their relationship has since disintegrated into scandal-ridden tabloid fodder, Tarlton Morton, the ex-wife of Peter Morton, recalled in court Wednesday a time when her marriage to the Hard Rock Café co-founder was blissful.

"I was in love, and I just never imagined that we wouldn’t be together forever," she testified.

During the third week of the trial in Los Angeles Superior Court over claims made by Tarlton (pictured below, from her Facebook page) that Morton defrauded her out of over $10 million in stock in Vegas’ Hard Rock Hotel and Casino and hired private investigators to stalk and harass her, it was clear the pair couldn’t be more at odds.
 

Morton, of course, was once a fixture of the Hollywood community. He co-founded the Hard Rock Café chain, which was sold in 1995, and the Hard Rock Hotel & Casino in Las Vegas, which was sold in 2006. His iconic Melrose Avenue restaurant, Morton’s, where he hosted the annual Vanity Fair Oscars bash for a number of years until it was closed in 2007, was a watering hole for Industry elite. More recently, he’s served as producer on two films — "Snatch" and the less-successful "Stardust."

 

The past weeks have seen testimony from Morton himself, other investigators, financial experts and neighbors of Tarlton. In court on Wednesday, it was finally time for Tarlton — dressed in a creme-colored ensemble, clutching a Chanel purse and sipping from a can of Red Bull before getting on the stand — to tell her side as  her ex-husband, dressed in a gray suit, yawned frequently from the sidelines.

 

The feuding couple made no eye contact during Tarlton’s testimony.

 

“This day has been a long time coming for you," her attorney, Paul Nelson, said after she was seated on the witness stand.

Chuckling, she replied: "Yes. Yes, it has."

She told of meeting Morton after moving to Los Angeles at age 24. She was in the art business, she said, working in a gallery housed in a building Morton owned. He came in one day to look at some artwork, and "about two seconds later he called me up and asked to take me out over the weekend."

"I think our second date was in the Bahamas," she said, smiling.

Married in 1990, the couple lived an extravagant lifestyle, traveling the world, frequenting exotic locations. Their wealth allowed her to be a stay-at-home mother to their two children together, something she said she felt "fortunate" to be able to do.

And when Morton decided to launch the Hard Rock Hotel, she said she weighed in, helping to pick the symbols that would go along the wall or the waitresses uniforms or bathing suits.

As part of the couple’s prenuptial agreement, Tarlton was to receive a $100,000 trust fund for each year the two remained married. But when plans were drawn up to build the hotel, that portion of the agreement was amended because Morton offered Tarlton a "gift" of love, instead —  a 1 percent stake in the hotel.

But after the birth of their daughter, Grace, in 1994, the couple’s marriage began to dissolve. Morton filed for a divorce, which was finalized in 1997. Shortly after, Tarlton’s personal and financial life started to crumble.

On the stand, she admitted she is a recovering drug addict who has, at times, spent  beyond her needs — especially in the period following her divorce, when she racked up about $800,000 in debt. "I got in a lot of trouble," she said.

Debts mounting, and with her alimony set to run out in 2004, she asked her ex to buy her out. Morton had his accountants do a valuation of her share — the exact percentage is a matter of dispute, though it is somewhere between 1 and 1.67 percent — and it came out at $451,000.

She now claims that she was not shown a cover letter from the bank explaining that the valuation was for tax purposes — not an attempt to assess the stock’s likely price at sale.

She also claims that when she asked Brian Ogaz, Peter’s vice president if she might get her own valuation on what the stock was worth, "He told me that would cost me $140,000. I had no money, and I felt that this was coming from Peter. And I trusted Peter. I’m the mother of his children and he’s the father of my children — we are connected."

So she signed a stock purchase agreement, and a few days later, the $451,000 was quickly transferred in and then out of her account to immediately pay off her debts. At this point, she said she expressed to Ogaz she felt it was unfair that she only got $451,000 when — had she stuck with her original trust fund of $100,000 per year — she would be entitled to $700,000. Ogaz expressed the concern to Morton.

"He said, ‘OK, that’s fine,’ and it happened in about 10 minutes," she said, recalling how an additional $259,000 was wired into her account.

When she learned that the hotel had been sold for $770 million in 2006, "a lot of bells went off, and I was upset," she recalled. Realizing the sale would have given her over $11 million, she sued.

Tarlton’s issues with prescription drug abuse were a factor throughout the testimony. In November 2006, she said, she fell at her home and had two herniated discs for which she was prescribed pain medication. A month later, she said, she began noticing suspicious activity.

"I was a single mom living alone with my two kids, and there were cars parked in front of my house and the ominous sense that I was being followed," she said.

Then, on Jan. 13, 2007 — days after she filed suit against Morton — she said she returned home from the movies and found her dogs barking and a ladder leading up to her office, where her burglary alarm wires had been cut. Her safe had also been tampered with and her medication stolen, she said.

"I knew that it was Peter," she said. "I was suing him and this was how he was dealing with it."

She said she observed individuals following her on errands and even on weekend trips to Dana Point for her daughter’s horse-riding competitions. When she checked into the Four Seasons hotel because her house had a mold infestation, she said her luggage was rifled through and pain medication stolen from the safe in her room. And additional items — ones she said she never threw in the trash — were stolen from her.

One such item — a video of her children on a trip to the zoo pointing at various animals — was shown in court. "I have about 50 of those tapes at my house all recorded," she said, as she cried and dabbed at her mascara with a tissue. "That one came from my house. Those are my kids."

 

The snooping was not disputed by the defense. Earlier on Wednesday, private investigator Scott I. Ross — the P.I. recognized for digging up dirt on the woman Robert Blake was accused of murdering which helped lead to his acquittal — was grilled by Tarlton’s lead attorney, Peter Thomas.

 

Ross admitted that he was hired by Morton’s family law firm to "surveil" Tarlton, taking objects from her trash with the knowledge he was doing so to obtain proof Tarlton was doing drugs." He also admitted that he hired a team of other investigators to help him with the case — a team that turned out to include ex-cops who had been a part of the Los Angeles Police Department’s Rampart scandal.

 

During cross examination, Morton’s attorney, Thomas J. Nolan, tried to show that Tarlton had fabricated the Jan. 13 burglary. He emphasized that she did not take any photographic evidence of the ladder or the cut wires and entered her home — even though she believed someone to be inside it. Furthermore, he said, she did not call the police.

"I knew that Peter Morton was behind it, and I didn’t want to call the police at all," she responded, explaining why she didn’t act.

Also questioned by the defense was Tarlton’s claim that she called a neighbor on the evening of the burglary. "She was extremely sympathetic, worried, understanding and very concerned," Tarlton said.

However, on the stand earlier in the trial, the neighbor said she did not know Tarlton’s home had been robbed until she was subpoeaned for the lawsuit.
 

Tarlton’s testimony is expected to conclude Monday morning, with closing arguments beginning on Wednesday.