A former business tycoon who developed opulent Las Vegas projects and imploded the New Frontier in a failed plan to build a Strip megaresort has been convicted of securities fraud.
Nochi Dankner, former chairman and controlling shareholder of Israeli conglomerate IDB Group, was found guilty Monday in Israel of stock manipulation and other securities-related charges. He could face up to five years in prison, according to Israeli newspaper Haaretz.
This Sunday, July 1, 2012, file photo, shows Israeli businessman Nochi Dankner.
Dankner was accused of manipulating the share price of his publicly traded IDB Holding Corp. ahead of a stock offering in early 2012, reports said.
Tel Aviv-based IDB says it invests in insurance, retail, tourism, real estate, communications and other industries. News reports did not say whether Dankner’s alleged financial crimes had any effect on, or were tied to, IDB’s Summerlin-area projects — retail and office complex Tivoli Village and luxury condo towers One Queensridge Place — or its past ownership stake in the former New Frontier site near Fashion Show mall.
His conviction, however, comes more than two years after he lost control of IDB, whose Las Vegas investments got hammered during the recession along with the valley’s broader economy.
Dankner used to be one of the most powerful businessmen in Israel, and his fall from the corporate elite has been closely followed there. He’s also taken criticism for IDB’s venture to Las Vegas, in particular its purchase of the New Frontier.
IDB partnered with Israeli mogul Yitzhak Tshuva's El-Ad Group to buy the 16-story casino-resort for $1.2 billion in 2007, and they imploded it that year. They planned to develop Plaza Las Vegas, a luxury casino-resort with 4,100 hotel rooms and 2,600 condo units.
But once the economy crashed, their plans went nowhere.
Ultimately, Australian casino mogul James Packer, former Wynn Resorts executive Andrew Pascal and Los Angeles investment firm Oaktree Capital Management took charge of the vacant site in 2014. They acquired 18.4 acres through foreclosure and rented the remaining 16.2 acres from longtime owners the Elardi family, and have laid out plans to develop Alon Las Vegas, a two-tower, 1,100-room resort.
In 2012, with the property facing foreclosure, Haaretz wrote the development plans that started “with a literal bang” were “ending with a whimper.” In another story about Dankner that year, the paper called the New Frontier purchase “one of his worst decisions yet.”
In 2014, after a judge upheld a plan to shift control of debt-laden IDB to new owners, an Israeli financial news editor wrote that Dankner was “responsible for terrible damage not just to his company but to the entire Israeli business environment” and cited, among other things, a failed “megalomaniac” project in Las Vegas, Reuters reported.
Dankner took control of IDB in 2003, according to Haaretz. Under his watch, the company partnered on two projects near Summerlin during the real estate bubble with Las Vegas-based EHB Companies.
The developers broke ground in 2006 on Tivoli Village, the Mediterranean-themed, mixed-use project at Rampart Boulevard and Alta Drive. It was slated to open with roughly 500,000 square feet of retail and 200,000 square feet of office space. After the market crashed, the partners considered mothballing the project but chose to build in phases instead.
The first portion opened in 2011. The second and final phase was expected to open by the end of 2013, but construction has been slow going, and it’s now slated to be completed in October.
IDB and EHB also teamed up to develop One Queensridge Place, two 18-story condo towers across Rampart from Tivoli.
The buildings opened in 2007, and by 2008, buyers had picked up about 150 of the towers' roughly 220 condos. But sales of new units dropped to zero in 2009, after the bubble burst.
EHB and IDB reportedly split ways more than three years ago, and IDB took control of Tivoli and One Queensridge.
By spring 2014, after Dankner lost control of IDB, the conglomerate was trying to sell a 50 percent stake in its Las Vegas holdings: Tivoli, a dozen unsold units at One Queensridge and about 20 acres of nearby land.
Efforts to get comment for this story from EHB, El-Ad’s parent company in Israel, and Tivoli representatives were unsuccessful.