The lawsuit seeks to deny Ellis’ request to discharge or cancel the money and assets allegedly owed to the California tribe through the bankruptcy proceeding. His three companies—Ellis Partners LLC, Ellis Las Vegas LLC and Ellis Gaming & Entertainment LLC (dba Ellis Gaming), which managed Indian casinos—began filing for chapter 7 bankruptcy liquidation in November after plans for a gaming house on the Las Vegas Strip fell through, reported the Las Vegas Sun.
Ellis had borrowed money from the Elk Valley Rancheria, as well as the Muckleshoot Indian Tribe in Washington and the Shoshone-Bannock Tribes in Idaho, for development of his proposed Las Vegas resort. Elk Valley Rancheria first sued Ellis in 2008, claiming the tribe loaned him $480,000 for development of the Ellis Las Vegas casino resort, and Ellis never paid them back. Ellis upholds the tribe converted the loan into equity in an Ellis company, so he does not owe them money.
“Ellis made material misrepresentations to Elk Valley and omitted other material facts in order to induce Elk Valley to make the loans,” the complaint says, reported Vegas Inc. “Ellis made material misrepresentations to Elk Valley in order to convince Elk Valley to forego collecting on the notes when due. The debt owed by Ellis to Elk Valley is non-dischargeable,” the complaint states.
The complaint accuses Ellis of fraud and comments on his devious methods of getting tribes to invest in his business proposals. “Ellis has a pattern and practice of obtaining funds for one entity, co-mingling the funds obtained with other entities, making inter-company loans, transferring assets from one entity to another, paying himself an exorbitant salary and then creating new entities without regard to his debts and obligations,” the complaint states, reported the Vegas Inc.
Ellis previously managed the tribe’s Elk Valley Casino in Crescent City, California, close to the Oregon border. The tribe claims it removed Ellis as manager of its casino for inadequate performance in May 2008.