Nashville's Blue Note jazz club owner owed in fraud case

CHATTANOOGA, Tenn. (AP) -- A bankruptcy filing linked to a federal fraud case shows the owner of a New York City jazz club is owed $7.6 million by a Chattanooga businessman charged with spending the money on pricey hotels, travel and credit card bills instead of investing it.

A company owned by Joe Prebul of Signal Mountain filed for Chapter 7 bankruptcy protection following Prebul's arrest Wednesday in Chattanooga. He was released on a $2 million bond.

Bankruptcy court records in Chattanooga show Blue Note jazz club owner Danny Bensusan, who according to some media reports is Prebul's brother-in-law, is owed $7.6 million. The federal criminal complaint charging Prebul does not name Bensusan but refers only to a relative who was told his money was being invested.

Prebul declined comment as he left his initial appearance hearing Wednesday. Bensusan could not be reached for comment at the Blue Note, but an employee took a message.

(Copyright 2009 by The Associated Press. All Rights Reserved.)

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