Prosecutors have indicted a California man over his alleged involvement in an investment scam that bilked an ex-NFL player of $4.5M. Kenneth Ray Cleveland faces multiple counts of money laundering and wire fraud.
The 63-year-old money manager served as the NFL player’s financial adviser for years beginning when the ex-pro athlete, who played with the Indianapolis Colts for several years, graduated college and joined the NFL. Court documents don’t name the victim.
According to prosecutors, Cleveland used $2M of the ex-NFL athlete’s funds to pay other clients in a Ponzi scheme he allegedly ran. The money manager used another $2M of the player’s money to cover his own expenses, including his mortgage.
Cleveland purportedly told the ex-NFLer that his funds would be placed in conservative investments that would garner him significant interest each month without lowering the principal funds. The athlete reportedly gave the money manager millions of dollars to invest.
Prosecutors said that Cleveland told the client that the investments were doing well and that the money manager allegedly generating bogus financial statements. The fraud failed when the player requested the return of his money, which Cleveland could not do because he had spent the funds.
Unfortunately, too many professional athletes have become the victim of investment fraud. This can be detrimental to them and their families. At The SSEK Partners Group, we represent high net worth individuals, including professional athletes, in helping them to recover their losses. Contact our securities law firm today to request your free case consultation.
Another person indicted this month for bilking pro athletes is Leon Smith, who is the ex-Kentucky basketball director and a former NCAA employee. Smith operated Legacy Athlete Management and Legacy Pro Management Group.
According to his indictment, which lists 14 fraud counts, Smith defrauded athletes of almost $1.3M, as well as committed money laundering and aggravated identity theft. He allegedly moved their funds in to his own business accounts.
The indictment states that Smith misappropriated these investors’ money between September 2011 through January 2015. Although the professional athletes aren’t named in the indictment, Yahoo identified three of them as ex-NBA players Josh Harrellson and Darius Miller and Utah Jazz player Shelvin Mack. The athletes reportedly gave Smith the authority to perform financial transactions for them, and they had given him their account information, social security numbers, birth dates, and other pertinent information.
Advisor Charged With Defrauding Former Colts Player Out Of $4.5M, Insurance News, May 26, 2017
Former Kentucky Staffer Leon Smith Indicted on Felony Fraud Charges, BleacherReport, May 8, 2017