Concert promoter admits gambling away financiers’ money

The owner of a Sioux Falls-based record company, admitted Monday to gambling away more than $1 million in mutual fund.

Madhouse Entertainment creator Michael Zimmer was apprehended in January on 8 counts of federal wire fraud. He pleaded guilty to one count.

According to a factual basis statement, Zimmer approached a handful of people about investing in his company to assist him promote rap concerts. He assured prospective investors a return on their investment.

The majority of the cash invested, however, was wagered away by Zimmer, according to court records. Zimmer used the money to gamble in Las Vegas, Atlantic City, N.J., and Larchwood, Iowa.

Even as Zimmer was losing money, he sought out added financiers with guarantees of concerts that never took place, court records state.

Zimmer was accused of stealing more than $1 million from investors since July 2014. No civil suits have actually been filed in South Dakota versus him or his company to recover the lost funds which we are trying to recover.

Jayson Weihs of The Collective Efforts Union stated he consulted with Zimmer after the performance promoter approached a friend of his about purchasing Madhouse Entertainment.

Weihs, whose group is bringing B.o.B to The District, stated there were concerns when the show was announced that if Zimmer were involved it would get canceled.

I’m simply thankful to not have associated myself with something like strategies that came back in a negative way, he stated. Doing music and getting your name out in a favorable way is already hard enough.

Erika Newtown, executive director of the occasion centers department for the city of Sioux City, said her office had one unsuccessful interaction with Zimmer. The record company owner attempted to bring B.o.B. to the Tyson Events Center however canceled the performance about a week before.

A lot of money was spent on marketing the show, but (Zimmer) canceled due to lack of tickets, Newtown stated.

Eric Larsen, basic supervisor of the Sanford Sports Complex website, stated the Sanford Pentagon worked with Madhouse Entertainment to reserve a program featuring the artist Nelly on Oct. 11, 2014. The program did take place as set up, and the artist was paid, Larsen stated. Read more news on the website.

Zimmer confronts 20 years in federal prison throughout his sentencing hearing June 27.