1669-24 Social, Society,& Local News 1946-1993 TUE SEP 10 1985 ED: FINAL
SECTION: LOCAL PAGE: 2D LENGTH: 13 . 00" MEDIUM
ILLUST: photo: Alvin Malnik in 1982 (n)
SOURCE: SUSAN SACHS Herald Staff Writer
DATELINE:
MEMO:
LAWYER CLEARED OF TAX-EVASION CHARGES
Miami Beach restaurant owner Alvin Malnik has won a 20-year battle with
the Internal Revenue Service, which tried unsuccessfully in two Miami criminal
trials and a prolonged civil dispute to prove that Malnik underreported his
1962 and 1963 income by about $950, 000 .
"It ' s nice to close the chapter, " said Malnik on Monday. "It ' s a total
vindication of any kind of intentional or unintentional civil tax liability. "
The U.S. Tax Court last week found that Malnik, a controversial lawyer
who has been linked for three decades to some of the country' s most colorful
organized crime figures, didn' t file false tax returns with the intent to
evade nearly $475, 000 in taxes.
Without a finding of fraud, the court said, the IRS can't go after
• Malnik for any underpaid taxes because the statute of limitations for
collecting deficiencies has run out.
The court said the IRS offered "no evidence that (Malnik) engaged in
any nefarious or illegal businesses. "
He did have an "unusual" law practice and participated in a variety of
complex loan deals and stock sales with investors in Switzerland, California,
Nevada and the Bahamas. As a result, the court said, "a lot of money passed
through his accounts which did not represent taxable income to him. "
The tax court case delved into a two-year period in the early 1960s when
Malnik was forging his reputation, at least in law enforcement circles, as an
associate of organized crime.
Many of the dealings questioned by the IRS were with the Bank of World
Commerce, a Nassau investment company that closed after one year amid
accusations of money-laundering. Among its investors were Las Vegas casino
owners, a Teamsters official and even Lyndon Johnson' s one-time aide Bobby
Baker.
The IRS charges also concerned Malnik' s legal representation of the bank
president John Pullman, a Canadian financier and old bootlegging friend of
reputed Mafia finance man Meyer Lansky. Malnik has denied any role in
organized crime and any past relationship with the late Lansky.
In the past few years, Malnik has kept a low profile. He still owns the
Forge restaurant on Miami Beach and an interest in the Cricket Club and said
he recently returned to Miami after "a great deal" of traveling. His journey
included a stay in Saudi Arabia with members of the royal family, whom Malnik
befriended when they lived in Miami in the early 1980s.
The only formal charges ever filed against Malnik involved his 1962 and
1963 tax returns. He was indicted in 1969 on charges of filing false returns,
but was acquitted. After the trials, a civil IRS investigation ultimately
resulted in a 1976 finding that Malnik underreported his income. The tax court
ruled on Malnik' s appeal.
ADDED TERMS :
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SUN JUN 02 1985 ED: FINAL
SECTION: HOME & DESIGN PAGE: 1H LENGTH: 32 . 85" LONG
ILLUST: photo: two Al-Fassi homes (b)
SOURCE: CHRISTOPHER BOYD Herald Real Estate Writer
DATELINE:
MEMO:
AL-FASSI ' S CREDITORS
ARE IN A ROYAL MESS
When Sheik Mohammed Al-Fassi, the enfant terrible of the Saudi Arabian
royal family, fled South Florida three years ago, he left a mountainous debt
peppered with extravagant quantities of real estate.
Al-Fassi ' s creditors are still haggling over his most visible property
-- an opulent waterfront estate on Star Island in Biscayne Bay. Almost 30
liens have been placed on the house and its grounds, which includes a palatial
residence and a small mosque.
The wayward sheik left the Star Island property and several other
holdings in the area, returning to Saudi Arabia with his children in late 1982
and leaving millions of dollars in unpaid bills in his wake.
Recently, other properties owned by Al-Fassi and his family have been
sold -- most at substantially less than what they paid. One home in Golden
Beach and two in Hollywood were sold by firms or trustees associated with the
departed sheik and his family.
Al-Fassi spent nearly a year in South Florida, buying property,
lavishing money on cars and politicians and fighting a costly divorce battle
with his wife. The debts included a $1 .5 million lodging bill from a Hollywood
hotel, his home during construction of the Star Island estate.
"My client has a claim for $400, 000 . He is almost bankrupt as a result
of it, " said Peter Cafino, an attorney representing Capital Marble Inc. The
company did much of the interior work on the Star Island house.
Cafino recalled how the Saudi relatives clamped down on the sheik' s
profligacy in late 1982 . "The royal family just got tired of his flamboyance
and turned off the well that pumped the money, " Cafino said. "It ' s just
terribly, terribly sad. A lot of small business people have been hurt. "
The creditors recently won an appeal to block the city of Miami Beach
from demolishing the sheik' s Star Island complex. They hope to persuade the
courts to sell the property in foreclosure and distribute the proceeds.
"Al-Fassi is gone and all he has left is confusion, " said Jim McCann, an
attorney who represents contractor claims totallying $1.2 million for work on
the estate. "We received estimates that $7 million to $10 million was invested
in that property. "
Today, title to the overgrown, unfinished mansion is unclear. The
creditors are casting about for a buyer to help settle nearly $4 million in
liens.
"Nobody really owns that property out there except Spelican, N.V. , " said
McCann, "and Spelican, N.V. , has disappeared. "
Spelican, N.V. , was a Netherlands Antilles partnership that the Al-
Fassis used to purchase and hold real estate. Shortly after the sheik' s
departure, his creditors learned Spelican was broke.
Spelican served as holding company for the flamboyant sheik and several
other members of the Saudi royal family. The company repeatedly paid
exorbitant prices for South Florida property.
One example involves two houses in Hollywood, one at 855 N. North Lake
Dr. , and the other, at 903 N. North Lake Dr. In 1981, Spelican paid $3 . 3
million for both houses, which were purchased from Monther Bilbeisi, a Boca
Raton financier who routinely borrows from the Al-Fassi family. The price was
nearly four times the $790, 000 that Bilbeisi paid for the houses in earlier
transactions.
OMOW AMEN
Almost as quickly as property prices inflated, they fell. The price had
dropped to $400 , 000 when Spelican sold the homes to Marnexus Investments Corp.
in May 1983 . Marnexus is a land holding company whose president is Irving M.
Malnik. In short order, Malnik ' s brother, Miami Beach restaurateur Alvin
Malnik, obtained a $450, 000 mortgage on the houses. The Malniks are related
to the Al-Fassi family by marriage.
Alvin Malnik refused to comment on the purchases, saying he knew little
about the property or the transactions.
Earlier this year, Marnexus sold the two Hollywood houses for $220, 000
to John R. Michelotti, a Golden Beach resident. Michelotti said he felt the
houses sold for market value. Broward County property tax records show that
one of the houses was appraised at $149, 000, the other at $240, 000 .
Based on prices recorded in courthouse records, values fell more than $3
million in four years.
Another house linked to the Al-Fassi family and to the Malniks sold
earlier this year for $270, 000 -- a drop of nearly $200, 000 from earlier
levels. In 1981, Sheik Mustafi Al-Fassi bought the Golden Beach home at 616 N.
Island Dr. for $460, 000, then transferred title to a relative. In January
1983, Alvin Malnik became trustee of the property.
"I think I got a good deal, " said Fred Chikovsky, who bought the house
from Malnik for $270, 000. "The house needs a lot of work. The sheik had some
pretty weird tastes. He left some awful green carpeting and Arabian drapes.
Otherwise, the house was pretty stripped down. This is no royal castle. "
ADDED TERMS:
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[II-SUN MAY 01 1983 ED: FINAL
SECTION: FRONT PAGE: lA LENGTH: 594 MEDIUM
ILLUST: photo: Turki bin Abdul Aziz, Alvin Malnik
SOURCE: RICHARD WALLACE Herald Staff Writer
DATELINE:
MEMO:
STORY UNVEILS 'MALNIKS OF ARABIA'
Miami Beach lawyer Alvin Malnik and his son Mark have performed a
cultural arabesque, indefinitely deserting South Florida, converting to Islam,
adopting Arab names and living among their wealthy, privileged Saudi friends,
according to People magazine.
Alvin Malnik -- who reportedly was a longtime associate of the late
organized-crime financial wizard Meyer Lansky -- now is close friend,
confidant and adviser to Prince Turki bin Abdul- Aziz in Saudi Arabia, People
said in a report made public today.
Mark Malnik, a 1982 graduate of the University of Miami ' s law school,
divorced his American wife after meeting Prince Turki ' s sister-in-law, Hoda,
People ' s report said. Last year, People said, he secretly married Hoda.
Hoda is a member of the al-Fassi family -- which includes the flamboyant
sheiks Mohammed and Tarek -- that made waves and news in recent years with a
free-wheeling, free-spending residency in South Florida.
For a time, Prince Turki lived in one of Alvin Malnik' s properties, the
Cricket Club condominium in North Miami.
For many years, Malnik has been a major investor, property owner, lounge
operator and restaurateur in South Florida. A stylish, well-spoken man, he is
a yachtsman, amateur pilot and mover in the international jet-set.
According to People ' s report, Turki ' s in-laws, the al- Fassis, envisioned
the elder Malnik, a 49-year-old American Jew, as the impressive equivalent of
a U.S. sheik.
After Saudi King Fand ordered his brother Turki and clan returned home in
1982 , the Malniks followed, eventually becoming part of the Arabians ' inner
circle, People said.
On Saturday, Alvin Malnik was unavailable for comment. His personal
secretary, however, said any reports that he might have permanently moved to
Saudi Arabia were "absolutely ridiculous. " Also, secretary Linda Creamer
said, Malnik was likely to return to South Florida "in the near future. "
Malnik has not changed his name, Creamer said, and his main interests are
in this area: his children and his nationally known Forge restaurant in Miami
Beach.
Malnik has been abroad in recent months, Creamer confirmed, but she said
he has traveled widely, sometimes in Europe. Only some of his time has been
spent in Saudi Arabia, she said.
The account of the Malnik-Saudi connection was written by William
McWhirter, who runs Time magazine ' s Miami-based Caribbean bureau.
The information about Malnik and his son had been gleaned from two sets
of sources, McWhirter said. One group was composed of former members of the
Saudi family' s retinue. To protect their identities, People called them,
collectively, Scheherazade. The other sources were Malnik family members,
McWhirter said.
"We had to shoelace all our sources and cross-stitch, " McWhirter said,
adding that he was confident of the report' s accuracy.
Long before the People article, rumors had been floating in Miami ' s legal
circles regarding Malnik and son. They, too, said that the Malniks had moved
to Saudi Arabia and young Mark had married Hoda.
For almost 20 years, Alvin Malnik' s name has been the subject of both
speculation and official investigation into reports characterizing him as an
associate of organized crime, specifically Lansky.
Malnik, who has never been convicted of a crime, consistently has denied
any wrongdoing. He has acknowledged that his many personal and business
relationships have brought him into contact with some people with questionable
reputations.
"The friendships I chose to make were perhaps not provident, or in my
best interest, " he said during a Herald interview last year. "If I like
somebody, I like somebody. I don't go around examining if this relationship is
good for me or bad for me . . . "
Herald Staff Writer Carl Hiaasen contributed to this report.
ADDED TERMS: report malnik trip saudi-arabia biography
END OF DOCUMENT.
A