San Francisco

Brugnara started his real estate career in San Francisco in 1993 by buying a note for $1.5M for the Kress Building at 939 Market Street, foreclosing on the note, and then borrowing $3M against the property. Brugnara proceeded to buy and sell a series of office buildings in San Francisco. In 1997, he owned 500,000 square feet of office space in downtown San Francisco.^[3] At one time or another, his portfolio included 814 Mission Street, the Bulletin Building, the Westinghouse Electric Building, 735 Market Street, the Royal Insurance Building, 201 Sansome Street, the Pacific Bank Building, the Medico-Dental Building, and 351 California Street. Brugnara tried unsuccessfully to purchase the Chevron Building in 1994.^[5]

Las Vegas

Brugnara first became involved in Las Vegas real estate in 1999, when he attempted to buy the Desert Inn for $270 million, but lost out to an all-cash offer from Sun International and Steve Wynn. In November 1999, he bought the Silver City Casino and the Las Vegas Shopping Plaza on the Las Vegas Strip for $40 million, with plans to replace it with a larger casino and hotel,^[6] but converted the property into a shopping center in 2004 after the Nevada Gaming Commission denied him a gambling license in 2001. In denying the license, the Gaming Commission had cited poor financial recordkeeping, claims that Brugnara had failed to file tax returns, conflicts with San Francisco regulators, and allegations that Brugnara had made death threats. In response, Brugnara stated that the Nevada Gaming Commissioners were "a bunch of wind-up dolls" representing Las Vegas incumbents, and threatened to file suit, but eventually decided not to do so, preferring to re-apply and address the Gaming Commission's concerns.^[7] In 2006–2007, Brugnara leased his 20,000+ sq ft, 11-bedroom Las Vegas mansion to Michael Jackson for over $1 million for six months.^[8] In January 2010, he submitted a $170 million bid to purchase the bankrupt Fontainebleau project on the Las Vegas Strip,^[9] but his bid was rejected for failing to include the required $1 million deposit and evidence of the ability to obtain the necessary financing.^[10]

Health code violations

In 1998, Brugnara was sued by the SF City Attorney for improper disposal of medical waste at his Medico-Dental Building. In 2000, the San Francisco Superior Court decided against Brugnara, and imposed a $1 million penalty.^[11]

Tax evasion

On April 9, 2008 the grand jury returned an indictment charging Brugnara with four counts of taking endangered species in violation of 16 U.S.C. section 1538, and two counts of making false statements to investigation agents in violation of 18 U.S.C. section 1001.^[12] Brugnara owned and leased property in San Francisco and Nevada. In 2000, 2001, and 2002 Brugnara sold properties and omitted the gains on his Federal Income tax returns.^[12] In 2010, Brugnara pleaded guilty to charges of tax evasion related to the sale of $45 million in commercial property and violations of the Endangered Species Act for blocking an opening in a private dam to prevent trout migration.^[13] Following his arraignment in the cases, Brugnara was released on $50,000 bond and ordered to have no direct contact with the witnesses in the cases. He was sentenced to 30 months in federal prison on the tax charges.^[12] On January 6, 2010 the government modified his release conditions based on allegations that Brugnara contacted the witnesses. He was later detained on January 28, 2010, based on allegations that he threaten a witness and released on January 31, 2010, but remanded again on March 5 for violating his release conditions.^[12]

During his detention hearing evidence was submitted demonstrating Brugnara's threats including a city attorney, a court appointed receiver, his brother, his former mistress and their child.^[12] Also a witness who altered her testimonial to a gaming officer after he violated his restraining order, two restraining orders filed against him in 2008 by employees at his children's school. On May 26, 2010 Brugnara was release to self surrender to the Bureau of Prisons.^[12] Brugnara's later request to withdraw his guilty plea and go to trial was denied by the trial judge, and the decision was affirmed by the Ninth Circuit Court of Appeals in 2011.^[14] Brugnara was released from prison in 2012.

Mail fraud

The artwork fraudulently obtained by Luke Brugnara is displayed in court during his trial.

In May 2014, Brugnara was charged with mail fraud for refusing to pay for $11 million in art delivered to his Sea Cliff estate.^[15] While awaiting trial on these charges, Brugnara was furloughed into the custody of his attorney, and escaped from the San Francisco federal courthouse.^[16] He was recaptured a week later in Los Gatos, California.^[17] Brugnara represented himself in the trial, which was tried before Judge William Alsup of the Northern District of California. By the end of the trial Judge Alsup had sentenced Brugnara to 471 days in prison for contempt due to Brugnara's conduct during the trial, including routinely ignoring Judge Alsup's evidentiary and procedural rulings, yelling at witnesses, throwing tantrums, and insulting the government's attorneys, including calling U.S. District Attorney Robin Harris a "Nazi" in front of the jury.^[18][19] Brugnara was convicted on six of the nine counts he faced, and sentenced to seven years in prison.^[20] On May 11, 2017 the Appeals Court affirmed all the convictions, rejecting Brugnara's argument that his decision to represent himself denied him a fair trial. The court also rejected Brugnara's claim that the art was fake and hence his refusal to pay or return it didn't constitute fraud, ruling that Brugnara had not taken the steps necessary to support his claim that the delivered art was fake, and, even if it were, his refusal to return the art (claiming that it was a gift) still showed evidence of an intent to defraud.^[18][21]