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Luxury club founder Tim Blixseth ordered back to jail

Amy Beth Hanson And Matthew Brown Associated Press

HELENA – A federal judge ordered the founder of a luxury Montana mountain resort back to jail Monday, saying he failed to disclose what happened to $13.8 million from the sale of a resort in Mexico.

Former billionaire Tim Blixseth, 64, was taken into custody by the U.S. Marshals Service after a contempt hearing in Helena.

U.S. District Judge Sam Haddon found Blixseth had not complied with orders requiring a complete accounting of how the money was spent.

The case stems from the bankruptcy of the Yellowstone Club near Big Sky, a private ski and golf resort, which boasts a $300,000 entry fee.

Authorities say Blixseth misappropriated $270 million from the club before he gave up control as part of a 2008 divorce and that he purchased the Tamarindo resort in the Mexican state of Jalisco with some of the money.

After a bankruptcy judge ordered him not to sell it, Blixseth sold the property anyway, for $13.8 million, funds Haddon said should go to creditors in the bankruptcy case. Creditors, however, allege Blixseth used the money to pay for trips to Europe, luxury aircraft and boats, and tens of thousands of dollars in fine wine.

Haddon said Blixseth would remain jailed until he provides a full accounting of the money from the sale in compliance with three previous court orders. He said he would not entertain any requests for variances or petitions for release.

Blixseth attorney Philip Stillman said he planned to file an emergency motion with the 9th U.S. Circuit Court of Appeals seeking his client’s release. Stillman said the judge hadn’t made clear what Blixseth needed to do.

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