A federal jury has found two men accused of running a financial scam that bilked investors, including several National Hockey League players, of $30 million guilty of money laundering, conspiracy, and wire fraud. The trial against Phillip Kenner, an Arizona financial adviser, and Tommy Constantine, a former professional race car driver, lasted ten weeks.
According to prosecutors, from 2002 to 2013, Kenner convinced at least 13 NHL players to invest $100,000 in a Hawaii real estate development. He met the players through a college friend who was drafted by the league.
He and Constantine stole the players’ money, causing $13M in losses. They used the funds to pay for their lavish lifestyles.
The two men, in a second scam, convinced many of the same hockey players to invest $1.4M in Eufora, a prepaid debit card business owned by Constantine. This money went into bank accounts controlled by the two men.
As their scheme started to fail, Constantine and Kenner orchestrated a third one, in which they told investors that their investment losses were because a Mexican real estate developer failed to repay a loan. The men persuaded the hockey players to give them $4.1 million to file a lawsuit over their losses.
Professional Athletes and Financial Fraud
Unfortunately, because of their wealth accumulated from years of playing professional sports, pro athletes are targets for financial fraudster. In June, NBA All-Star Tim Duncan told Bloomberg that because his financial adviser bilked him, he lost over $25 million in investments. The Spurs player is suing the adviser, Charles Banks, for more than $1 million. Banks denies the allegations.
Sometimes, a fraudster is a fellow athlete. Earlier this month, the U.S. Attorney’s Office in Massachusetts charged ex-NFL player Will Allen with 23 federal felonies for bilking investors out of millions of dollars. Many of his alleged targets were professional athletes.
Now, Allen faces multiple counts of fire fraud, aggravated identity theft, illegal monetary transactions, and one count of conspiracy to commit wire fraud. The former New York Giants safety, who also once played for the New England Patriots, ran a company that supposedly provided high-interest short-term loans to professional athletes.
The money for the loans was paid for by investors. However, while some of the money did go toward loans, millions of dollars were purportedly diverted.
Federal prosecutors contend that the loans were fabricated and Allen was running a Ponzi scam. Most of the money allegedly went to Allen and his associate Susan Daub for other business ventures and their own spending. The two of them are also facing civil charges.
For many athletes to lose their earnings because they’ve been bilked can lead to significant financial consequences, especially as many of them retire out of their sport at a young age and lose that significant source of income. The SSEK Partners Group represents professional athletes that have been victims of financial fraud. We help investors recoup their losses. Contact our securities lawyers today.
Financial adviser, race car driver convicted for defrauding NHL players, Reuters, July 9, 2015
Ex-Patriots Player Faces Federal Charges for Fraudulent Loans to Athletes, Foxborough Patch, July 12, 2015
Ex-Giant Will Allen faces decades in prison after latest criminal charges, NJ.com, July 14, 2015
SEC Sues Ex-New York Giants Cornerback Over Alleged Ponzi Scam, Stockbroker Fraud Blog, April 8, 2015