Jay Bloom could have left Las Vegas and never looked back.
He was sued multiple times by investors, lenders and contractors involved with the Las Vegas Mob Experience, the museum he founded and briefly operated at the Tropicana in 2011. The attraction went bankrupt, was sold for cents on the dollar and closed.
But Bloom didn't cut and run. He fought the lawsuits, and today, he not only has put his legal problems to rest but is vowing to repay his investors, even though he's not legally obligated to do so.
Bloom is committed to clearing his name and making right by the situation. And the same investors who lost millions of dollars now back him and say he has done just that.
“Yes, legally, I can walk away,” Bloom said. “But this is the right thing to do.”
“He has been a major blessing to the people involved in this,” said Keith Cooper, a 78-year-old retired actuary near Atlanta who invested $140,000 in the museum.
Bloom now hopes to open a small chain of international Mob Experience museums. The 47-year-old Las Vegas businessman is leasing roughly 1,300 gangster-related artifacts from Canadian lenders who foreclosed on the objects. He wants to display the guns, knives and other material in three mob museums he aims to open next year in Northern California, New York City and Macau. He said he also is considering opening a location in Las Vegas.
If he pulls it off, Bloom will have engineered a stunning turnaround.
“I’ve been trying to make sure everybody is made whole,” Bloom said.
Bloom said he won’t take a dime for himself until he pays back investors the roughly $10 million they lost. Once he does, Bloom and the group will split future earnings 50/50. The investors’ stakes were wiped out in bankruptcy court, but Bloom nevertheless said he hopes to pay back his former partners within two to three years of opening the museums. He said he already has reimbursed the investors $1 million.
Each museum would feature a small, temporary installation. They wouldn’t be sprawling, permanent attractions like the first Mob Experience. Bloom expects them to cost $1 million to $5 million combined, and he said more than 10 Mob Experience investors have committed money to his new venture. Bloom said he also would contribute his own funds.
Las Vegas investor Chris Morgando, whose family put almost $1 million into Bloom’s original tourist spot, said he respects Bloom’s efforts to pay people back.
“Any recovery at all is going to be very welcoming,” Morgando said.
Cooper said he has been in touch with Bloom regularly and is optimistic about getting his money.
Toronto financier Gordon Ewart, whose GC-Global Capital Corp. lent about $3 million for the project and foreclosed on the mob artifacts, acknowledged that “promoters always over promote and under deliver, and that’s what Jay did,” but said Bloom is “trying to work his way out of it.”
“Jay at least has given us a shot at making our money back,” Ewart said.
Moreover, the investors now side with Bloom in one of the biggest lawsuits related to the museum. Dozens of them banded together to claim in court papers in 2012 that Bloom’s business partner Louis Ventre worked lockstep with — and, unknown to Bloom and the investors, was an employee of — lenders who sought to sabotage and bankrupt the museum and sell its assets for pennies on the dollar.
Ventre did not respond to an email seeking comment, nor did the lenders’ attorneys. Bloom and the investors said they haven’t heard from Ventre in years and don’t know where he is.
Bloom opened the $25 million, 26,000-square-foot Mob Experience in March 2011. It offered an interactive walking tour that told the story of American organized crime through Mafia figures such as Meyer Lansky, Benjamin “Bugsy” Siegel, Sam Giancana and Tony “The Ant” Spilotro. (The Las Vegas Sun was involved in a cross-promotional agreement in which it shared photo and video content in exchange for brand placement.)
But the museum had cost overruns, and attendance fell short of projections.
“We ran into legitimate cash-flow issues,” Bloom said.
After getting sued a handful of times over the project, Bloom stepped down as manager in July 2011 but kept his ownership stake. Ventre took charge of the day-to-day operations. The museum went bankrupt in October 2011.
In court papers, owners said parent company Murder Inc. LLC, named for the infamous 1930s-era mob hit squad, had $324,000 in assets and $26.6 million in liabilities.
Ventre filed for personal bankruptcy in June 2012, eight months after the museum went bankrupt. He claimed $49,000 in assets and $21 million in debts, a large portion of which was listed as Murder Inc. business debt. Among his creditors was Bloom, who was listed as being owed $1 million.
Investor John Vipulis bought the Mob Experience out of bankruptcy for $2.1 million and changed its name to “Mob Attraction Las Vegas.” But when its lease at the Tropicana expired last November, the museum closed.
At the time, management said the Mob Attraction would re-open elsewhere on the Strip, but they didn’t say where. It still has not re-opened.