State Moves to Cancel Splash’s Liquor License

State investigators have moved to revoke the liquor license of the stylish Malibu restaurant Splash--named by police as a target of a money-laundering investigation involving the scandal-ridden ZZZZ Best carpet cleaning firm.

The state Department of Alcoholic Beverage Control filed a complaint April 6 alleging that state laws were violated when half of the restaurant’s stock was secretly transferred to an Encino firm controlled by two convicted felons whom police believe have organized crime ties.

“We are going to recommend revocation” of Splash’s liquor license, said David B. Wainstein, counsel for the ABC, which concluded its investigation of the restaurant last month.

The restaurant’s manager, Ronnie A. Lorenzo, 42, denied that the restaurant had broken any laws and indicated that any adverse ABC decision will be appealed. “I completely deny the (ABC) accusation,” he said Wednesday.

Long Litigation

An ABC official said it could take up to two years to litigate the matter, and that, meanwhile, the restaurant would retain its liquor license.

Splash, a favorite dining spot for entertainers, was named last year by Los Angeles Police Chief Daryl F. Gates as a front “for laundering large organized crime profits from narcotic trafficking.” Gates said Lorenzo is “a suspected organized crime figure.”

Police investigators have been pouring through Splash’s records as part of their investigation of the Reseda-based ZZZZ Best Co., the firm founded by whiz kid Barry Minkow, who gained national fame by turning the company’s stock into an overnight sensation.

Minkow and 10 of his former business partners were indicted last January by a federal grand jury on racketeering and fraud charges.

However, Lorenzo has not been accused of any wrongdoing in the ZZZZ Best investigation.

Reputed Crime Figures

Police investigators said the Encino firm named by the state liquor board, Richman Financial Services, is controlled by Richard Schulman, 54, and Maurice Rind, 49, both convicted felons and reputed organized crime figures.

Rind has insisted that both he and Schulman are legitimate businessmen. Neither has been charged with any wrongdoing.

According to the ABC’s chief investigator in the Splash inquiry, Richard Henry, the case is “unique” in that the restaurant “appeared to have hidden ownership” from the time it received its liquor license on Sept. 11, 1985.

The ABC complaint alleges that a firm called Scouse Corp. did not tell the truth in June, 1985, when it said on its liquor license application that it was “the true and sole owner” of the restaurant and its 10,000 shares of stock.

Instead, the ABC contends that Lorenzo and one other investor also owned Splash stock in 1985.

Transfer Not Disclosed

In April, 1986, the ABC alleged, 9,000 of Scouse’s 10,000 shares were transferred to Lorenzo and two other investors. The transfer was not disclosed, the ABC alleged.

Under ABC regulations, according to Wainstein, whenever 10% or more of the ownership of a restaurant with a liquor license is transferred to other parties, it must be disclosed to, and approved by, the agency. When 50% or more changes hands, a new ABC liquor license must be obtained, he said.

In December, 1986, according to investigator Henry, 5,000 Scouse shares were secretly bought by Richman Financial for about $66,000. This was done “without first making application and obtaining approval from the ABC to transfer the license to the newly constituted corporation,” the complaint alleges.