Jay Bloom, a Las Vegas investor with a controversial history, faces fresh litigation in Clark County over allegations that he and his business associates misled investors in a cryptocurrency mining venture in Arizona. The lawsuit, filed on May 21, accuses Bloom of orchestrating a scheme through Pegasus Group Holdings to establish a solar-powered cryptocurrency mining operation in Kingman, Arizona, which he knew was destined to fail.
The plaintiffs, Aileron Investments and Contrail Holdings, claim that Bloom and his team purchased land from them using credit but failed to pay the agreed purchase price or interest. Despite promising investors significant returns, the lawsuit states that Pegasus Group Holdings never advanced beyond the initial stages of setting up the mining operation. The generators, purportedly owned by the company, were actually leased and insufficient for the intended scale of operations.
“Resembling a classic ‘pump and dump’ scheme, Defendants had no intention of running a legitimate business enterprise,” the lawsuit alleges. “Instead, they spread false and misleading information to create investor excitement and to obtain favorable sale terms.”
David Doto, Bloom’s attorney, responded to the allegations via email, asserting their intention to “vigorously defend Mr. Bloom against these outrageous allegations in a court of law where testimony must be made under oath and before a jury of one’s peers.” Doto expressed confidence that justice would ultimately prevail.
Bloom, in a separate email to a Las Vegas Review-Journal reporter, suggested contacting Jon Cooper, identified as the largest investor in Pegasus and a key figure in managing the company’s operations and records. However, attempts to reach Cooper for comment were unsuccessful.
Doto further criticized the lawsuit as “one-sided” and premature, stressing that it had not yet been challenged through legal motions or addressed by Bloom. He questioned the journalistic ethics of proceeding with a story based solely on the plaintiff’s allegations.
Bloom’s recent history in Las Vegas includes efforts to attract an NBA expansion team to Southern Nevada, although one of his corporations filed for Chapter 11 bankruptcy in 2021. This corporation, which owned Bloom’s sole known residence, was embroiled in litigation over garbage pickup fees, casting doubt on Bloom’s financial stability.
Bloom also founded the Las Vegas Mob Experience, an interactive show at the Tropicana Las Vegas that went bankrupt shortly after opening in 2011.
The lawsuit paints a damning picture of Bloom and his associates, accusing them of “grifting from one fad enterprise to another, bilking investors out of millions of dollars along the way.” It alleges that they presented themselves as affluent entrepreneurs mingling with elites and used these connections to lure investors into their schemes.
The complaint details how Bloom and his team held a press conference in 2019 in Kingman, featuring a British duchess as a paid spokeswoman, to falsely claim that they were actively mining cryptocurrency and would have significant power capacity online by the end of that year. The company reportedly raised $6.4 million from investors, which Bloom and his associates allegedly used to buy back their own interests in the company and deplete its assets through disguised loans.
The plaintiffs claim that Bloom and his associates purchased 700 acres in Kingman to give the illusion of a thriving investment, but never developed the properties or made payments towards their purchase. A separate case resulted in a default judgment against Pegasus, awarding substantial amounts to Aileron and Contrail, including interest and attorney’s fees.
The latest lawsuit seeks to hold Bloom and his associates accountable for allegedly using the company’s funds for personal gain, including lavish spending on wages, food, travel, and entertainment. The legal battle continues as Bloom and his team prepare to defend themselves against these serious accusations.
