Brian J. Ourand, a former Live Nation Entertainment and SFX Financial Advisory Management Enterprise executive, has pleaded guilty to wire fraud. Ourand admitted to embezzling almost $1M from heavyweight champion Mike Tyson, NBA basketball stars Glen Rice and Dikembe Mutombo, and another athlete.
According to prosecutors, Ourand began defrauding clients in 2003. They say that he used the funds to pay for hotel stays, tanning sessions, gambling activities, private school tuition for a girlfriend’s relative, and other expenses.
Ourand was charged in 2015 with multiple criminal counts, including wire fraud, mail fraud, and aggravated identity theft. As part of his plea agreement, the former financial adviser will repay the money he stole from the athletes.
Last year, the US Securities and Exchange Commission also said that Ourand had misappropriated client funds. The regulator ordered him to give back more than $671K plus interest, in addition to a $300K civil penalty.
Rice, Tyson, and Mutombo had sued SFX for $5M in 2013. A settlement was reached. Meantime, SFX and its chief compliance officer consented to pay $150K and $25K, respectively, to resolve the civil charges.
Unfortunately, professional athletes are a target of fraudsters seeking to take advantage of their huge bank balances, inexperience, and lack of education about investing. For many athletes, who can only play in their profession until a certain age, losing their income and savings that they expected would support themselves and their families after retirement can have devastating consequences.
Some of the many professional athletes who have suffered financial losses due to fraud and the financial representatives blamed for the fraud:
· Retired San Antonio Spurs player Tim Duncan. He accused his former financial adviser, Charles Banks, of mishandling about $20M. Banks faces criminal charges.
· Former Atlanta Falcons quarterback Michael Vick and other NFL players were bilked of over $3M in a Ponzi Scam. Their former financial adviser, Mary Wong, pleaded guilty to criminal charges and was sentenced to over five years in prison.
· Former NBA and NFL players Vernon Davis, Brandon Knight, Joe Haden, Clinton Portis, and Adewale Ogunleye were bilked in a $13.7M Ponzi scam.
· A Financial Industry Regulatory Authority arbitration panel ordered former broker Jinesh “Hodge” Brahmbhatt to pay Ex- NBA Player Sam Young $2M. Brahmbhatt lost approximately $600K of Young’s money in promissory notes that were unregistered.
· The US Securities and Exchange Commission ordered ex-financial adviser Billy Crafton to pay nearly $1.7M for fraud and misrepresentation charges. Crafton specialized in representing professional athletes at the start of their careers.
· Superbowl winning quarterback John Elway, formerly of the Denver Broncos,and a partner gave hedge fund manager Sam Mueller $15M to invest. Mueller was charged in 2010 with running a Ponzi scam.
· Ex- MLB player Xaiver Nady Johnny Damon and New York Yankee’s Jacoby Ellsbury lost money in the $8B Stanford Ponzi Scam.
· Former MLB All-Star Mike Sweeney of the Kansas City Royals sued UBS (UBS) and his former broker, Ralph A. Jackson III, for $7.6M after the financial representative allegedly invested $5M of his funds in high-risk private placements.
At The SSEK Partners Group, our securities lawyers work with high net worth individual investors, including professional athletes, in trying to recoup their investment fraud losses. Contact our securities fraud law firm today.
Former financial adviser to Mike Tyson, Dikembe Mutombo pleads guilty in criminal fraud, Chicago Tribune, February 7, 2017