A twice-convicted felon accused of extorting Los Angeles nightclub mogul Sam Nazarian was arrested Thursday in Las Vegas.
According to records from the Clark County Sheriff's Department, Derrick Armstrong, 43, was arrested on suspicion of grand theft and writing bad checks. He is being held on bail of $79,430.
Armstrong was arrested on outsstanding warrants outside of a hearing of the Nevada Gaming Commission, which was considering a gaming license for Nazarian, the former chief executive of the SLS Las Vegas.
Agents for the gaming commission said they were tipped off by law enforcement officials that Armstrong would be attending the hearing and may have outstanding warrants.
Nazarian has accused Armstrong in public hearings and court records of extorting him for as much as $3 million since 2005. Details about the charges were first disclosed two weeks ago during a gaming license hearing by the Nevada Gaming Control Board, an advisory body to the commission.
After the disclosure -- along with revelations of Nazarian's cocaine use -- Nazarian relinquished day-to-day control of the hotel to Strockbridge Capital, the majority owner of the SLS Las Vegas.
Armstrong has been convicted of drug possession and money laundering, but said in an interview that he never threatened Nazarian for money. He said he and Nazarian were business partners.
Armstrong said Nazarian still owes him $2.5 million for helping Nazarian's company, SBE Entertainment, negotiate several business deals, including the purchase of the Katsuya restaurants.