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‘Defendants were raising funds to steal’: Purported billionaire, associates face lawsuit

Updated June 10, 2024 - 9:45 am

A Las Vegas investor and purported billionaire is once again facing litigation in Clark County, this time over allegations that he and his business associates took money from investors in a cryptocurrency mining scheme.

A lawsuit filed May 21 alleges that Jay Bloom orchestrated a scheme to create a cryptocurrency mining operation run on solar power generators in Kingman, Arizona, and operated by the company Pegasus Group Holdings.

The company purchased parcels of land from the lawsuit’s plaintiffs, Aileron Investments and Contrail Holdings, using credit, but never paid the purchasing price or interest to the companies, the lawsuit said.

Although Bloom and his business associates told investors that they would generate profit, the company “never got past the initial stages of mining crypto currencies,” according to the lawsuit. The generators the company claimed to own were actually leased, and were not sufficient for the planned operation, the lawsuit said.

“Resembling a classic ‘pump and dump’ scheme, Defendants had no intention of running a legitimate business enterprise,” the lawsuit said. “Instead, they spread false and misleading information to create investor excitement and to obtain favorable sale terms.”

David Doto, an attorney for Bloom, responded via email to a Las Vegas Review-Journal request for comment.

“We look forward to vigorously defending Mr. Bloom against these outrageous allegations in a court of law where testimony must be made under oath and before a jury of one’s peers, and we are confident that justice will be served,” Doto wrote.

In a Saturday email to a Review-Journal reporter, Bloom asked that the news organization reach out to a Jon Cooper, who he identified as “largest investor in Pegasus” and a CEO in the company who “handled the books and records as well as the daily operations for the company.”

Bloom wrote that his email be considered off the record, but the Review-Journal declined to agree to that condition.

Bloom wrote that the reporter should ask Cooper “about the truthfulness of the events as described, as he has the most knowledge as to what transpired. Jon had access to actual information and the daily operations that Plaintiff either never had the ability to review or simply ignored.”

Several attempts to reach Cooper on Saturday were unsuccessful.

In a separate email message, Doto wrote that he and Bloom were aware of the complaint and that the lawsuit had “not yet been challenged by the crucible of motion practice or answered by Mr. Bloom, nor have any potential counter-claims been filed.”

Doto called the lawsuit “one-sided” and a potential story “premature,” while also pointing to Cooper, who is not named in the lawsuit, as a possible source of information.

“Respectfully, your intention to plow quickly ahead with a news story based on the unfounded and harmful ‘allegations’ in the complaint does not appear congruent with journalistic ethics and responsibilities,” Doto wrote.

Bloom and the other defendants had not filed a response to the lawsuit as of Friday, court records show.

In late 2021, Bloom was advertising that he expected to front hundreds of millions of his own capital to persuade the NBA to bring an expansion team to Southern Nevada.

In the same year, one of the corporations under Bloom’s name, which owned Bloom’s only known residence, filed for Chapter 11 bankruptcy, and court records show that the corporation was entangled in litigation over garbage pickup fees, raising questions about Bloom’s financial status.

Bloom’s history in Las Vegas includes the founding of the Las Vegas Mob Experience, an interactive show that operated in 2011 at the Tropicana Las Vegas, but soon went bankrupt.

The latest lawsuit against Bloom paints him and his business associates as a group who “grift from one fad enterprise to another, bilking investors out of millions of dollars along the way.”

“The modus operandi is the same, Defendants present themselves as wealthy, serial entrepreneurs that rub elbows with the elite and politicians, including British Royalty, local office holders, sheriffs, Supreme Court justices, the President of the United States, athletes and movie stars,” the complaint said.

Bloom’s website pictures him with numerous national and local politicians, and records show he has reported $33,500 in donations to Nevada campaigns in 2024 alone.

According to the lawsuit, Bloom used his connections to attract investors to Pegasus Group Holdings. In 2019, Bloom and his associates held a press conference in Kingman, in which a British duchess was used as a paid spokeswoman, the lawsuit said.

“That day Bloom himself represented that they were mining crypto currency and that they would have 340 megawatts of power live and online with servers by the end of 2019,” according to the lawsuit. “That in fact was false.”

The company eventually raised $6.4 million in funds, and the lawsuit alleged that Bloom and his associates then started using investor funds to purchase back their own interests in the company, allegedly draining the company’s assets through disguised loans.

The lawsuit claims that the defendants then purchased an additional 700 acres in Kingman “in order to convince the world that their investment was thriving, when in reality Defendants were raising funds to steal.”

The company bought 132 acres from Aileron Investments for more than $1.1 million, and also purchased about 630 acres from Contrail Holdings for about $5.4 million. Pegasus financed both purchases and agreed to make payments through the proceeds from the cryptocurrency mining, the lawsuit said.

Lawyers for the plaintiff companies alleged that Pegasus did not take steps to develop either property, and did not make any payments towards the property purchases.

In November, District Judge Susan Johnson entered a default judgment against Pegasus in a separate case, awarding more than $865,000 to Aileron and more than $4.1 million to Contrail, plus hundreds of thousands in interest and attorney’s fees.

The default judgment was entered after Pegasus failed to answer a court summons, court records show.

May’s lawsuit was filed against both Pegasus and Bloom as an individual, plus multiple business associates. The complaint alleged that Bloom and his associates treated the company’s assets as their own, paying themselves hundreds of thousands of dollars in wages and spending lavishly on food, travel and entertainment.

“Defendants caused the Pegasus Entities to excrete all funds in their possession to the Defendants, while the Pegasus Entities had little to no operations and no assets to speak of — which permitted Defendants to maximize their own personal gain,” the lawsuit said.

Contact Katelyn Newberg at knewberg@reviewjournal.com or 702-383-0240.

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