Paul Bilzerian avoided a $180 million fine for over 30 years. The SEC may have finally caught up.

By Lukas I. Alpert

The 1980s corporate raider claimed poverty for decades - but is now charged with hiding millions in a cannabis company purportedly run by his son, lifestyle influencer Dan Bilzerian

It was one of the most frustrating cases in the Securities and Exchange Commission's history.

In 1993, the regulatory agency secured a $62.3 million fine against corporate raider Paul Bilzerian after he had been convicted of securities fraud and sentenced to four years in prison.

But for the next 30 years, Bilzerian pleaded poverty and the government only collected about $550,000. With interest, the fine ballooned to $180 million.

The SEC had long suspected Bilzerian was hiding money and spent millions of dollars trying to track it down, but to no avail. Until now.

On Friday, the agency and federal prosecutors in Los Angeles filed charges against Bilzerian saying that he hid tens of millions of dollars in a cannabis company purportedly run by his son, the Instagram lifestyle influencer Dan Bilzerian.

For years, Paul Bilzerian, 74, has lived in St. Kitts and Nevis while fighting the SEC at every turn, defending himself in court and claiming he didn't have a nickel to his name.

"What bank accounts? Do you think I'd be stupid enough to have a bank account?" he told the Wall Street Journal in 2014.

According to the federal indictment filed Friday, Bilzerian in fact didn't have any bank accounts - but instead had funneled millions into Ignite International Brands Ltd., a cannabis and lifestyle-products company built around the persona of his son, a brash, high-stakes poker player who has 32 million followers on Instagram.

Prosecutors say that from 2018 until this year, the elder Bilzerian, with the aid of his longtime accountant Scott Rohleder, had secretly capitalized Ignite by funneling money through shell corporations into the company's accounts.

On paper, it was made to appear that Bilzerian's son was Ignite's chief executive and in charge of all its business operations - but prosecutors say the elder Bilzerian was actually running things behind the scenes. Ignite, a Canada-based company operating from Los Angeles, had traded publicly until going private in 2022.

Paul Bilzerian and Ignite were charged with conspiring to defraud the United States and to commit wire fraud and securities fraud. Rohleder, who also had served as Ignite's chief financial officer, was charged with conspiring to commit wire and securities fraud as well as assisting with the preparation of false tax returns.

Dan Bilzerian was not charged.

"This indictment alleges a long-running pattern of criminal behavior to avoid a regulator's judgment, mislead investors, and cheat the IRS," said Martin Estrada, the U.S. Attorney for the Central District of California. "My office will continue to use all tools available to protect investors and ensure the security of our nation's economy."

Messages left with Rohleder, an attorney for Ignite and for Dan Bilzerian were not immediately returned. It was not immediately clear if Paul Bilzerian had retained an attorney and he couldn't be immediately reached.

Dan Bilzerian has garnered outsize attention through the wild and ostentatious lifestyle he has portrayed online, featuring photos and videos of him on yachts with scantily clad women, shooting high-powered weapons and playing poker.

Questions have long swirled around how the younger Bilzerian financed his lifestyle, to which he has always been coy. He told the Journal in 2014 that he had earned $50 million in one year playing poker. He has also said that he was given a $100 million trust by his father.

Late last year, a holding company operated by Dan Bilzerian that oversaw a network of companies connected to Ignite declared bankruptcy in Nevada.

As part of his long-running fight in court with the SEC over the fine, Paul Bilzerian argued that financial maneuvers one judge called "shenanigans" were legitimate estate-planning moves.

A high-school dropout, the elder Bilzerian graduated from Stanford University and Harvard Business School and went to work on Wall Street during the 1980s buyout boom, where he became a successful corporate raider.

But he got swept up in the SEC's efforts to curtail some of the era's excesses and was charged with securities fraud in 1988. He was convicted the following year and sentenced to four years in prison, but only served 13 months. He maintained his innocence.

At the time of his conviction, Bilzerian claimed to be worth around $50 million. After the SEC secured the fine against him in 1993, he claimed he had lost all his money in bad investments.

-Lukas I. Alpert

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09-27-24 1802ET

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