Judge returns ultra-rich club founder Tim Blixseth to jail

AP News
|
Posted: Apr 20, 2015 7:39 PM
Judge returns ultra-rich club founder Tim Blixseth to jail

HELENA, Mont. (AP) — A federal judge ordered the founder of a luxury Montana mountain resort back to jail Monday, saying he failed to disclose what happened to $13.8 million from the sale of a resort in Mexico.

Former billionaire Tim Blixseth, 64, was taken into custody by the U.S. Marshals Service after a contempt hearing in Helena.

U.S. District Judge Sam Haddon found Blixseth had not complied with orders requiring a complete accounting of how the money was spent.

The case stems from the bankruptcy of the Yellowstone Club near Big Sky, a private ski and golf resort, which boasts a $300,000 entry fee.

Authorities say Blixseth misappropriated $270 million from the club before he gave up control as part a 2008 divorce and that he purchased the Tamarindo resort in the Mexican state of Jalisco with some of the money.

After a bankruptcy judge ordered him not to sell it, Blixseth sold the property anyway, for $13.8 million, funds Haddon said should go to creditors in the bankruptcy case.

Creditors, however, allege Blixseth used the money to pay for trips to Europe, luxury aircraft and boats, and tens of thousands of dollars in fine wine.

Haddon said Blixseth would remain jailed until he provides a full accounting of the money from the sale in compliance with three previous court orders. He said he would not entertain any requests for variances or petitions for release.

Blixseth attorney Philip Stillman said he planned to file an emergency motion with the 9th U.S. Circuit Court of Appeals seeking his client's release. Stillman the judge hadn't made clear what Blixseth needed to do. "Tim Blixseth has produced every single scrap of paper he was ordered to produce and could produce," Stillman said.

Haddon, however, said Blixseth has been provided with clear and unequivocal directions throughout.

Haddon previously jailed Blixseth for a week in December after finding him in contempt for not giving up details on the sale. Blixseth was freed after seven days by an appeals court.

Haddon, speaking angrily at times, noted Monday that Blixseth's attorneys made a "document dump" Saturday night, filing more than 200 more pages that "left it entirely for this court to figure out what it all means." He said Blixseth still hasn't provided records from his personal bank accounts.

The Yellowstone Club went bankrupt after Blixseth turned it over to his ex-wife in 2008. It's been under new ownership since 2009.

Montana revenue officials say he owes almost $74 million in back taxes, penalties and interest in the state, after diverting the money from the club to buy luxury cars, jets and high-priced properties in Mexico, Scotland and elsewhere.

Blixseth, of Medina, Washington, has judgments against him for more than $250 million from the liquidating trust.

Blixseth has denied wrongdoing and fought the allegations at every turn.

___

Brown reported from Billings.