Fast cars, loose cash figure in firm’s demise
John Visconti says he was thinking only of his son’s future when he bought him a $220,000 Aston Martin sports car for his birthday -- no matter that the little guy was 3 years old.
“I had saved money for three years to pay for that as an investment for my son,†Visconti told a lawyer for his estranged wife, whom he married when she was 20 and he was nearly 60.
At the time, the Aston Martin might have been just a pricey bone of contention in yet another acrimonious Beverly Hills breakup.
But that was before Visconti’s luxury cars became an issue in the collapse of his Hollywood payroll services company, Axium International Inc., costing 550 employees their jobs, sticking thousands of other workers with worthless paychecks and unleashing a New York investment firm’s allegations of massive fraud.
“These people created a lot of chaos, for a lot of companies and individuals,†said Susanne Preissler, executive producer at Independent Media Inc., which covered hundreds of its crew members’ bounced Axium checks. “I’m sitting here cleaning up their mess.â€
Visconti, 65 -- whose eclectic business ventures have included cosmetics, gourmet coffee beans and offshore banking -- bought Axium for $4 million in 2001. He grew it into one of the top three companies of its kind, with offices in Los Angeles, New York and London.
By all accounts, the Iranian immigrant with an adopted Italian surname had wrung substantial wealth from a decidedly unglamorous slice of show business -- handling payrolls for major studios and independent productions such as last year’s critically acclaimed “The Savages.â€
Then the roof fell in.
Axium and its staffing subsidiary, Ensemble Chimes Global, which supplied contract workers to Fortune 500 companies and others, abruptly ceased operations Jan. 7 and filed a liquidation bankruptcy action the next day.
A week later, GoldenTree Asset Management, which had loaned Axium $130 million, sued Visconti and Chief Operating Officer Ronald D. Garber in federal court in Los Angeles, alleging that they pillaged the company while failing to pay millions in employment taxes.
Suit cites luxury cars
They used Axium money for the Aston Martin, a Bentley coupe, a Rolls-Royce Phantom and a Maserati Quattroporte, according to the lawsuit, which has since been refiled in Los Angeles County Superior Court.
The complaint also accused them of spending Axium funds for private jet flights, vacations, jewelry, political contributions, legal fees for their divorces and weekly cash payments of $8,000 each, delivered by armored cars.
And then there was the apartment for Amber Smith, 35, a model and actress who has graced the cover of Playboy and stars in the erotic “Sin City Diaries†on Cinemax.
“Whatever lavish things they spent their money on, I hope they enjoyed it,†said former Axium employee Chastity Davis, “because these guys are going to hell in gasoline pants.â€
Visconti and Garber declined to comment. Their lawyer denied the allegations and accused GoldenTree of exaggerating “an ordinary business dispute†and driving Axium out of business.
“The salacious allegations leveled against Mr. Visconti and Mr. Garber are a transparent and misplaced attempt to deflect attention from GoldenTree’s own highly questionable role in Axium’s demise,†attorney Ellyn S. Garofalo said.
GoldenTree lawyer Wayne S. Flick called the dispute anything but ordinary.
“Rather, it is an extraordinary case of massive fraud, theft, self-dealing and the looting of a company by its principals,†he said.
Visconti bought Axium in December 2001, became chief executive and hired Garber, a former general counsel to the Koo Koo Roo restaurant chain, to run it.
Headquarters was a building at 5800 Wilshire Blvd. and an adjacent house converted to offices that Visconti had fortified with bulletproof glass, former employees said.
“That house was like a fortress,†said Randy Klinenberg, who headed a software unit.
Born in Iran in 1942, Visconti moved with his family to the United States as a child and later spent 14 years in Europe before settling in Southern California.
“I knew him in London,†recalled Arnold Soloway, who founded the talent agency Artists Group, “but his name wasn’t Visconti.â€
Soloway knew him then as nightclub owner John Manocheri, and the lawsuit says he’s also gone by Bijan Manoochehri. By the 1980s, he used Visconti and operated a 150-seat restaurant by that name in Santa Monica.
An associate said Visconti’s name is from an Italian nanny who raised him after his mother died when he was 4.
“He became a citizen in 1994 and changed his name for no other reason than simplifying things,†said the associate, who was not authorized to comment because of the lawsuit.
A private investigator working for Visconti’s estranged wife, Maha, 27, found six Social Security numbers linked to his name, according to a report in the divorce file.
But in a deposition, Visconti said he had used only two, and there was nothing mysterious or nefarious about it. He was issued one as a young man in the United States, he testified, and another to replace it after someone stole his identity while he was living in Europe.
Visconti also had multiple businesses in the 1990s, according to the lawsuit, including Visconti Cosmetics, Lipstick Model Management and Desire Films. He later owned Coffee Maven, an Internet seller of gourmet beans.
But it was another online business, Excelsior International Bank, that caught state and federal regulators’ attention. Solely owned by Visconti, the Barbados-based bank promised secrecy and 11.5% annual interest on deposits.
Regulators’ charges
In 1997, the Office of the Comptroller of the Currency said Excelsior had made “false and misleading†claims, including that deposits were insured. Idaho regulators said Excelsior operated without a charter or deposit insurance, and ordered it to cease and desist. The bank later dissolved.
In 2001, the same year he bought Axium, Visconti married Maha El Moggadem, a Moroccan college student he met at a Los Angeles dinner party when she was 19. In an interview, she said she was smitten by his charming ways and “gentle, nice smile.â€
Their son was born two years later, before the marriage disintegrated. Whatever other problems the couple had, money apparently wasn’t one of them.
Visconti gave Maha as much as $40,000 a month in cash and had so much of it, she said in divorce papers, that he tried to move large sums overseas by offering her brother and others $50,000 of every $200,000 they might secretly deposit in foreign banks.
She also alleged that Visconti changed his birth certificate and marriage license to conceal his true age and country of origin. In the divorce files are copies, purportedly signed by Visconti, indicating that he was born in Los Angeles in 1957 -- 15 years after his real birth date.
Visconti denied the allegations in the contentious divorce, which is pending. His associate also said the businessman had never hidden assets or forged documents. “Those accusations are simply outrageous,†the associate said.
Visconti, who owned about 85% of Axium, and Garber, who owned about 9%, were each paid salaries of $400,000 a year.
But GoldenTree alleges that they funneled “untold millions†more to themselves and others through secret bank accounts.
The alleged beneficiaries included Amber Smith, the actress whose apartment the company paid for as a “consultant,†according to the lawsuit.
“It is unclear exactly what services Smith performed,†the complaint says.
Smithcould not be reached for comment. Visconti’s associate said Axium financed the production of “Sin City Diaries†and threw in an apartment for its star.
“Part of her deal was that she got a modest apartment in Los Angeles for the run of the show,†the associate said.
The men’s wives also allegedly benefited. Maha Visconti allegedly was given a Bentley paid for by Axium, and Susan Cruz, Garber’s estranged wife, allegedly received $250,000 for work she didn’t do.
Maha Visconti denied wrongdoing. Cruz did not return phone calls.
The lawsuit also contended that Axium money went to elected officials and political candidates, including Los Angeles Mayor Antonio Villaraigosa, City Atty. Rocky Delgadillo and City Councilman Eric Garcetti. None got more than $1,000, contribution records show.
The lawsuit did not allege that any recipients accepted more than the law allowed. In all, Axium, Garber and Visconti made $78,900 in political contributions. Former Democratic gubernatorial candidate Steve Westly was the largest recipient, with $13,400 in 2006 from Axium and Garber.
“During my campaign for governor, I received contributions from thousands of Californians, and I did not have any personal contact with anyone from Axium,†Westly said.
Axium purchase
A large chunk of Axium money went to the $80-million cash purchase last year of a software firm. Axium celebrated by treating hundreds of employees to two days at the Bellagio in Las Vegas, including tickets to Cirque du Soleil and $50 in chips.
Axium cash also flowed for baby showers, weddings and personal tragedies. When the father of Miescha Montoya’s two children died in a motorcycle crash in 2005, the former payroll coordinator said she received a sympathy card and $1,500.
“I cried,†she said. “It touched me.â€
The beginning of the end for Axium was in August, when the IRS hit it with liens for taxes owed. It paid $31 million the next month but still owed as much as $100 million.
Caught in a cash crunch, Axium defaulted on GoldenTree loans that were secured by virtually all of its assets. The firm removed Visconti and Garber in November, installed its own manager and put Axium up for sale.
Visconti contends there were “numerous bids,†according to his associate. But when none was accepted by Jan. 3, GoldenTree foreclosed on the loans and swept Axium accounts of $22.5 million. That plunged what had been a profitable company into bankruptcy, Visconti and Garber say.
“We are not responsible for ‘pulling the plug’ on the company,†they said in a statement. “We have always had our employees’ best interests at heart, and we know they are hurting. However, this situation was totally beyond our control.â€
Fallout has reached beyond the entertainment industry and into other companies that hired workers through its staffing subsidiary.
The bankruptcy trustee selling the company’s assets also scrambled to get W-2 tax forms to 120,000 people affected by the collapse.
Some key Axium employees have been picked up by Entertainment Partners, which bought the company’s remains at auction, but most have had to find new jobs.
Preissler, the producer, said companies such as hers also were still affected, and wonder whether they’ll be liable for taxes, union dues and other payroll items Axium failed to pay.
“This is going to be a live issue for everyone for a long time,†she said.
Times researcher Scott Wilson and staff writer Dan Morain contributed to this report.
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