Zappos CEO’s final months described as drug-addicted psychosis in court documents

Business

LAS VEGAS (KLAS) – The family of late Zappos CEO Tony Hsieh claims some people in his inner circle allowed the former Las Vegas entrepreneur to enter into contracts even as his health deteriorated due to longtime substance misuse, court records said.

Hsieh died in a house fire in November 2020 in Connecticut. He was 46. In December, a judge named his father, Richard Hsieh, and brother, Andrew Hsieh, as special administrators to his estate since the entrepreneur did not have a will.

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In the two lawsuits filed in February, Hsieh’s longtime assistant, Jennifer “Mimi” Pham, claims she is owed some of Hsieh’s “vast fortune” for work she performed on his behalf, documents said. The lawsuits estimated Hsieh’s wealth at $840 million.

According to the lawsuits, the duo was so close that Hsieh used Pham’s cell phone as his own. The lawsuits also claim Hsieh and Pham used the same address.

Pham filed several creditors’ claims in court, asking his estate for more than $9 million. The claims filed earlier this year ask the court for the money as part of management fees related to a documentary film company and a property in Park City, Utah. Pham said she is a “manager and a member of Mr. Taken, LLC,” a company that had a contract with one of Hsieh’s businesses.

In one claim in court documents, Hsieh’s family said Pham drew up a $10 million contract on a Post-It note.

Court documents show another claim for Pham’s company Rove & Whim, LLC, which lists its contractually obligated tasks as “project related services” and “personal assistance services,” including a $30,000 per day fee to retain such services.

In court documents, Pham, Pham’s boyfriend Roberto Grande, and another friend Tony Lee are accused of taking advantage of Hsieh as his physical and mental health declined, the family claims.

Mimi Pham and Zappos.com CEO Tony Hsieh attend the Vanity Fair New Establishment Summit Cocktail Party on Oct. 8, 2014 in San Francisco, California. (Photo by Michael Kovac/Getty Images for Vanity Fair)

As KLAS reported in April, Lee is seeking nearly $7 million from Hsieh’s estate. He identifies himself as a friend of Hsieh’s since 2003. Lee provided “assistance” to Hsieh at times, involving business ventures in Vegas, the lawsuit filed in April said.

In new court filings, Hsieh’s family said Hsieh used “alcohol as a social lubricant to alleviate his social anxiety.” The family also said doctors prescribed Hsieh with Adderall, Xanax and Ambien.

While Hsieh lived in Las Vegas, he had bought up several properties and was living most of the last year of his life in Park City.

In November 2019, Hsieh’s family said he began to experiment with ketamine, which in high doses can lead to hallucination, studies have found. Soon after, Hsieh began to misuse ketamine, causing “Tony to suffer from disorganized delusions and delusions of grandeur,” they write in court documents. One example the family gives is Hsieh’s belief that all humans were living in a simulation called the “simulation hypothesis.”

“Tony believed that he was able to learn special skills while under the influence of ketamine that would allow him to defeat the [simulation hypothesis] to save humanity,” court documents said.

In late 2019 and early 2020, friends reported that Hsieh was sleeping just two or four hours a night. Eventually, Hsieh’s addiction to ketamine “made him incapable of ‘sobering up’ to recognize the detrimental effects the drug and delusions were having on him,” court documents said. “This rendered Tony unable to fulfill his duties as CEO of Zappos at the same level he had done so before he began abusing ketamine.”

Inside the shed where Tony Hsieh slept the night of the fire. (KLAS)

In February 2020, Hsieh’s friends convinced him to attend a rehab facility. While at the facility, a friend made a list of “behaviors Tony had exhibited that caused people to believe Tony needed an intervention.” The list included the power to transform into animals or other objects, the ability to “download talents to his brain with minimal study” and the ability to manifest water, court documents said.

Hsieh left rehab and continued “abusing Ketamine to excess,” the documents said.

“Clearly, Tony was not in any condition to plan, analyze or negotiate any high-stakes business deals,” the family wrote in court documents.

In June 2020, longtime friends planned a trip for Hsieh in Montana. According to court documents, Hsieh “boarded the bus wearing only pajama pants… and brought only a box of crayons with him.” He also offered a friend $1 million to serve as his personal alarm clock.

While on the bus to Montana, Hsieh asked his friends to join a suicide pact, the documents said. When Hsieh arrived back home to Utah, he exhibited signs of psychosis and was taken to a hospital.

It was around this time that Hsieh began using nitrous oxide as a replacement for other drugs he was taking. According to friends, Hsieh used “as many as 50 cartridges of nitrous oxide a day, often in public, or during ‘meetings’ with people,” documents said.

Court documents also said Hsieh’s bedroom was “littered with hundreds of spent nitrous oxide cartridges.”

“At the same time, witnesses describe Tony’s household as alarming,” court documents said. ”The house was littered with thousands of empty nitrous oxide containers, broken glass, dog feces and rotten food. Tony was in the process of transforming his house to a state of ‘nature.’ A stream was reportedly re-routed to the patio so that residents and guests could wash their dishes using a ‘natural dishwasher.’ Electricity was replaced with hundreds of candles and tiki torches prompting calls to local law enforcement. The smoke alarms would sound late into the evening due to the sheer number of candles scattered throughout the house.”

One of Tony Hsieh’s properties in Park City, Utah. (KLAS)

“Tony’s true friends, not interested in profiting from Tony’s condition, became increasingly concerned about Tony’s health and many were looking for ways to get Tony professional help,” court documents said. “Unfortunately, in the months since Tony had left the rehabilitation facility, several less scrupulous people prominently occupied Tony’s attention and were living large, all at Tony’s expense.”

A longtime friend contacted Hsieh’s parents and brother in the summer of 2020, believing “Tony’s death was imminent” and that he had lost a large amount of weight.

In October 2020, Hsieh’s brother became so concerned about his brother’s health, he asked that “vitamins and protein supplements” be slipped into his food. Andrew Hsieh had been offered a $1 million salary to take care of his brother at the time, previous court records said.

Richard Hsieh hired an addiction specialist to travel to his son’s home, but the specialist was denied access to the residence, court documents said. It was around this time that Hsieh resigned as Zappos CEO.

Hsieh traveled to a Connecticut home in early November 2020. On the night of the fire, Hsieh had retreated to a shed on the property after a fight with his girlfriend and was using a propane heater to stay warm before he was killed in a fire, investigators said earlier this year. Hsieh was in a storage room with a 20-pound propane tank at the time.

According to witness reports, Hsieh was lying in a storage area with a blanket near some candles. Part of the blanket and a plastic bag had caught fire earlier in the night, a report said.

The door of the shed where Tony Hsieh slept the night of the fire. (KLAS)

Surveillance video shows Hsieh opening the door to the shed as smoke appeared to be coming from inside, about 10 minutes before his friends call 911, investigators said. An employee had been checking on Hsieh every 10 minutes, leaving Post-It Notes and knocking on the shed’s door before the fire, investigators said.

Hsieh was traveling with a nurse and a driver who were staying at a hotel nearby, investigators said earlier this year. He had planned to fly to Hawaii the morning of the fire.

Through replies in court, Pham, Grande and Lee deny any wrongdoing.

“Pham, Grande and Lee knew Tony was unwell,” court documents said. “Each had physically observed or received reports of Tony’s significant weight loss. Each had physically observed or received reports of Tony’s excessive intake of nitrous oxide. Pham joked about Tony’s use of nitrous oxide, referring to it as his ‘gun.’”

“As Tony’s mental well-being was spiraling downward due to his long-term drug abuse, and as he became more and more isolated from those who were best positioned to protect his interests, Pham and Grande conspired to exploit, and did exploit the close and confidential relationship Pham enjoyed with Tony to extract millions of dollars from him in a few short months,” court documents said, “As part of this exploitation, Pham memorialized Lee’s extortionate salary.”

In another claim, Hsieh’s family said Pham was paid $30,000 each day that another contactor with whom she had “developed a feud” was at one of Hsieh’s properties, documents said. An invoice for the fee totaled more than $1.8 million.

Lawyers for Pham, Grande and Lee did not return a request for comment. A spokesperson for Hsieh’s family has repeatedly declined to comment on the ongoing legal matters.

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