Investors told boss of lender can’t pay

A trustee on Thursday told creditors that the personal bankruptcy case of former USA Capital President Joseph Milanowski would yield little or no recovery of losses suffered when the hard-money lender collapsed in 2006.

USA Capital was managing $962 million in investments for 6,000 individuals when it and related companies filed for bankruptcy in 2006.

The Las Vegas company solicited money from investors and used it to make short-term loans secured by real estate. Investors were attracted by double-digit yields on their money and the relative security of real estate for collateral, but many lost large sums of money when USA Capital closed.

Several of the 20 investors present at the meeting at the Foley Federal Building in Las Vegas said they lost their retirement savings at USA Capital.

In August, Milanowski pleaded guilty to one count of wire fraud at USA Capital.

Nevada State Bank and some USA Capital entities earlier forced Milanowski into Chapter 11 bankruptcy, which allowed him to continue business operations.

At the request of trustee Ford Elsaesser, Milanowski’s bankruptcy case was converted on Dec. 31 into Chapter 7, which calls for liquidation of assets to pay off creditors.

Elsaesser told about 20 creditors attending the meeting that they may recover some of their losses from the USA Capital corporate bankruptcy proceedings. However, the trustee told them to expect little or nothing from Milanowski’s personal bankruptcy.

Milanowski, who personally guaranteed many loans at USA Capital, has $340.3 million in liabilities and $870,000 in assets, according a report filed in October. Some of the liabilities stem from personal guarantees that Milanowski, former USA Capital partner Tom Hantges and others provided for loans at USA Capital.

The Milanowski family agreed to pay $1 million in cash to the bankruptcy estate and to turn over claims Joseph Milanowski had in USA Commercial Real Estate Group, one of the USA Capital companies.

The trustee also said investigators in Milanowski’s personal bankruptcy and those of USA Capital found no evidence that investors money was diverted to offshore accounts.

“We think we turned over every rock (looking for hidden assets),” Elsaesser said. “We found what we found and we settled on that basis. We didn’t determine that any significant amount of money went to Mr. Milanowski personally or through Mr. Milanowski to other parties.”

If Milanowski made misrepresentations to hide money from creditors, the agreement with the Milanowski family could be voided, Elsaesser said.

The debtor testified that he received an annual salary of $200,000 in the last few years of USA Capital’s operations.

A couple of creditors questioned Milanowski about specific investments and transactions, but he told them he did not recall those transactions.

“Mr. Milanowski seems to have a case if amnesia or whatever,” said creditor Donald Pensler. Pensler stood over Milanowski, showed him documents and angrily challenged him until the trustee asked Pensler to sit down.

Russell Walker, Milanowski’s attorney, told Pensler: “This really is not a forum for you to make personal attacks.”

Pensler said: “I established the fact that he’s a dummy and can’t remember a damn thing and he’s a felon.”

Several investors said they objected to discharging Milanowski from his debts through bankruptcy, but Elsaesser said five other parties already have filed legal challenges against discharging Milanowski.

Commented Wayne Allen, one of several former USA Capital investors: “If he goes to Europe with $100 million, we’ll never see it again.”

“I don’t think he’s going to Europe anytime soon,” Elsaesser said.

Federal prosecutors are recommending that Chief U.S. District Judge Roger Hunt sentence Milanowski to eight to 12 years in prison, depending on how much he cooperates with the government. Hunt has said he may sentence Milanowski to a longer term.

Contact reporter John G. Edwards at or 702-383-0420.

Bellagio, MGM Resorts International’s luxury hotel turns 20 – Tara Mack
The more than 3,000-room Bellagio hotel is situated on the site of the former Dunes Hotel. The Dunes was imploded in 1993, and construction of the Bellagio started in 1996. It cost $1.6 billion to build, making it the most expensive hotel in the world at the time. The Bellagio was former Wynn Resorts Ltd. Chairman and CEO Steve Wynn’s second major casino on the Strip after The Mirage. MGM Resorts International acquired the property from Steve Wynn in 2000. (Tara Mack/Las Vegas Review-Journal)
Facial recognition software at G2E – Todd Prince
Shing Tao, CEO of Las Vegas-based Remark Holdings, talks about his facial recognition product. (Todd Prince/Las Vegas Review-Journal)
Former NBA player, Shaquille O'Neal, speaks about his new Las Vegas chicken restaurant
Former NBA player, Shaquille O'Neal, speaks about his new Las Vegas chicken restaurant. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Bobby Baldwin to leave MGM
MGM Resorts International executive and professional poker player Bobby Baldwin is set to leave MGM.
Caesars has new armed emergency response teams
Caesars Entertainment Corp. has created armed emergency response teams. They are composed of former military and law enforcement officials. "These teams provide valuable additional security capabilities,” Caesars spokeswoman Jennifer Forkish said. Caesars is hiring Security Saturation Team supervisors, managers and officers, according to LinkedIn. The company did not say how many people it plans to hire for the units. (Las Vegas Review-Journal)
Las Vegas, airlines prepare for CES
CES in January is expected to attract more than 180,000 attendees. (Las Vegas Review-Journal)
AGS partners with Vegas Golden Knights
AGS is the nation’s second-largest manufacturer of Class II slot machines used primarily in tribal jurisdictions. It announced a marketing partnership with the Vegas Golden Knights NHL team. (Las Vegas Review-Journal)
Lehman Brothers bet big on Las Vegas
Lehman Brothers collapsed 10 years ago, helping send the country into the Great Recession.
Fremont9 opens downtown
Fremont9 apartment complex has opened in downtown Las Vegas. (Marcus Villagran/Las Vegas Review-Journal) @marcusvillagran
Ross & Snow launches in Las Vegas
Luxury shoe brand Ross & Snow has opened in Las Vegas, featuring "functional luxury" with premium shearling footwear. (Bailey Schulz/Las Vegas Review-Journal)
Remote Identification and Drones
DJI vice president of policy and public affairs discusses using remote identification on drones. (Bailey Schulz/Las Vegas Review-Journal)
Drones and public safety in Nevada
Two representatives in the drone industry discuss UAV's impact on public safety. (Bailey Schulz/Las Vegas Review-Journal)
Frontier Airlines to launch flights from Las Vegas to Mexico
Frontier, a Denver-based ultra-low-cost carrier, will become the first airline in more than a decade to offer international service to Canada and Mexico from Las Vegas when flights to Cancun and Los Cabos begin Dec. 15. (Rick Velotta/Las Vegas Review-Journal)
MGM Resorts International CEO Jim Murren addresses Oct. 1 lawsuits
MGM Resorts International Chairman and CEO Jim Murren addresses criticism his company has received for filing a lawsuit against the survivors of the Oct. 1 shooting. (K.M. Cannon/Las Vegas Review-Journal)
MGM Resorts International opens the doors on MGM Springfield
Massachusetts’ first hotel-casino opens in downtown Springfield. The $960 million MGM Springfield has 252 rooms and 125,000-square-feet of casino. (K.M. Cannon/Las Vegas Review-Journal)
MGM Resorts International prepares to open MGM Springfield
Las Vegas-based MGM Resorts International gave news media and invited guests a preview of the $960 million MGM Springfield casino in Massachusetts. The commonwealth's first resort casino will open Friday, Aug. 24. (K.M. Cannon/Las Vegas Review-Journal)
A Walk Through Circus Circus
It only takes a short walk through Circus Circus to realize it attracts a demographic like no other casino on the Strip: families with young children. (Todd Prince/Las Vegas Review-Journal)
Morphy Auctions, a vintage slot machines seller, wants gaming license
Vice president Don Grimmer talks about Morphy Auctions at the company's warehouse located at 4520 Arville Street in Las Vegas on Thursday, Aug. 16, 2018. (Rick Velotta/Las Vegas Review-Journal)
Nevada's venture capital money doesn't stay in state
Zach Miles, associate vice president for economic development for UNLV, said there’s venture money in Southern Nevada, “but trying to find the right groups to tap into for that money is different.” According to a 2017 report from the Kauffman Foundation, Las Vegas ranked number 34 out of 40 metropolitan areas for growth entrepreneurship, a metric of how much startups grow. With a lack of growing startups in Las Vegas, investment money is being sent outside of state borders. The southwest region of the U.S. received $386 million in funding in the second quarter, with about $25.2 million in Nevada. The San Francisco area alone received about $5.6 billion. (source: CB Insights)
Neon wraps can light up the night for advertising
Vinyl wrap company 5150 Wraps talks about neon wraps, a new technology that the company believes can boost advertising at night. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Nevada on the forefront of drone safety
Dr. Chris Walach, senior director of Nevada Institute for Autonomous Systems, talks to a reporter at NIAS's new Nevada Drone Center for Excellence of Public Safety, located inside the Switch Innevation Center in Las Vegas. K.M. Cannon Las Vegas Review-Journal @KMCannonPhoto
Motel 8 on south Strip will become site of hotel-casino
Israeli hoteliers Asher Gabay and Benny Zerah bought Motel 8 on the south Strip for $7.4 million, records show. They plan to bulldoze the property and build a hotel-casino. Motel 8 was built in the 1960s and used to be one of several roadside inns on what's now the south Strip. But it looks out of place today, dwarfed by the towering Mandalay Bay right across the street.
Project billed as one of the world's largest marijuana dispensaries plans to open Nov. 1
Planet 13 co-CEO Larry Scheffler talks about what to expect from the new marijuana dispensary, Thursday, July 19, 2018. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Oasis Biotech opens in Las Vegas
Brock Leach, chief operating officer of Oasis Biotech, discusses the new plant factory at its grand opening on July 18. (Bailey Schulz/Las Vegas Review-Journal)
UNLV Tech Park innovation building breaks ground
Construction on the first innovation building at the UNLV Tech Park is underway. (Bailey Schulz/Las Vegas Review-Journal)
News Headlines
Add Event
Home Front Page Footer Listing
You May Like

You May Like