Advocate Owner Regent Media Accused Of Scamming Big Banks Out Of $90 Million

[Newsjock]

http://www.queerty.com/shock-advocate-owner-regent-media-accused-of-scamming-big-banks-out-of-90-million-20110202/

We already knew Regent Media — owners of Out, The Advocate, here! TV, Gay.com, and a slew of porn properties — was broke, destitute, scammy, bitchy, and at general risk of collapse. Little did we know the company's proprietors may be behind a $90 million scam involving two huge Wall Street banks.

In order to score $90 million in loans from Bank of America and Merrill Lynch, Regent allegedly created fake movie licensing and distribution deals and passed them off to the banks as legitimate contractual relationships that would drive future revenue. The banks, of course, needed reason to believe Regent would have the ability to pay back its debts based on earnings to come. The fake agreements, the banks claim in a fraud and breach of contract lawsuit filed against Regent, were purposefully drafted by the company to trick the banks, with Regent allegedly knowing full well its deals were crap.

In a 57-page complaint filed in Los Angeles Superior Court, the banks allege the scam began back in 2005 and 2006, when Bank of America fronted Regent $50 million. (It's unclear from this Courthouse News report how we get from $50 to $90 million, but it's likely the banks granted Regent additional loans.)

So what'd Regent supposedly do with all that cash? Put it into the pockets of Stephen Jarchow, the chairman and CEO of Regent Group of Entertainment Companies (and tax lawyer by trade), the banks claim. Which explains why Jarchow is also named as a defendant in the stunning lawsuit. Very curiously, then, is the absence of the name Paul Colichman, who with Jarchow built Regent into the bumbling gay media colossus it is today.