Exclusive Investigation: NFL Stars Scammed Out of Millions
usnews.com
Dozens of National Football League players have been bilked out of millions of dollars by their own financial advisers.
In Monday's edition, U.S.News & World Report will publish the results of an extensive investigation of financial scams perpetrated against current and former NFL players. The report, by Edward T. Pound and Douglas Pasternak, will appear on the magazine's Web site (www.usnews.com) today at 2 p.m., EST.
The National Football League Players Association estimates that at least 78 players have been defrauded of $42 million in the past three years. Gene Upshaw, the union's executive director, calls that figure "the tip of the iceberg ... There are many cases out there where players are too embarrassed to report the fraud."
The current and former NFL players, who spoke exclusively to U.S. News about their problems with financial advisers, include Simeon Rice, defensive end for the Tampa Bay Buccaneers; Antoine Winfield, cornerback for the Buffalo Bills; and D'Marco Farr, a former St. Louis Rams defensive tackle. Among the cover story's revelations:
Simeon Rice details his dealings with California investment adviser Donald Lukens, who is being investigated by the FBI and, in a civil complaint, has been accused by the Securities and Exchange Commission of defrauding investors, sports figures, and others, of perhaps $25 million. Rice says he invested with Lukens when he joined the league in 1996, ultimately, losing $2.4 million. In their first meeting in 1996, Lukens sealed the deal. "As we left the office, Lukens handed me an envelope with several thousand dollars of cash inside," said Rice.
At least 13 other current or former NFL players, including Hall of Fame running back Eric Dickerson, also invested money with Lukens, whose bankruptcy case lists Dickerson, now a Monday Night Football sideline reporter, as a creditor, for $1.835 million.
Antoine Winfield discusses his dealings with a close friend and financial adviser, who allegedly bilked the cornerback out of $1.35 million. Winfield tells U.S. News that while he was at Ohio State University, the adviser, Dunyasha Mon Yetts, lavished him with gifts, including $1,500 suits, cash, and free trips to Las Vegas and the Bahamas.
The FBI and the SEC are investigating whether former Minnesota Vikings All-Pro running back Robert Smith was defrauded of more than $1 million.
The package details tactics employed by some financial advisers, including the case of one who lured players and others into his investment firm by claiming to be an Italian count. He was, in fact, a twice-convicted felon.
Next week, the NFLPA will launch a new program to regulate financial advisers who handle money for players. The union will conduct background checks, looking for criminal records or other problems, such as lawsuits or tax liens. It will also require advisers who register in the program to be licensed and qualified by state and federal regulatory agencies.
The program is being launched largely because of the case of William "Tank" Black, a sports agent and money manager who was convicted of federal charges Thursday for defrauding NFL players he represented of up to $14 million.
Next year, the NFL will pay players a total of $2.5 billion in salaries and bonuses next year. "We tell these young men they are walking around with bull's-eyes on their chests,'" says Lawrence Sweeney, the chief investigator for NFL security.
Other players, whose cases are mentioned in the cover story package, include:
Baltimore Ravens tight end Shannon Sharp
Carolina Panthers defensive tackle Sean Gilbert
Cincinnati Bengals linebacker Brian Simmons
Former Denver Broncos safety Steve Atwater
Washington Redskins running back Stephen Davis
Former Washington Redskins wide receiver Art Monk.
A sidebar story considers the case of former Green Bay Packers player Sean Jones. A top financial consultant to the NFLPA, Jones was ordered by a securities arbitration panel to pay $500,000 to former All-Pro cornerback Cris Dishman in a case involving allegations of fraud, negligence, and breach of fiduciary duties. Dishman alleges that Jones had invested his money in a hedge fund, "yet never disclosed any of the risks associated with this investment." Jones is challenging the arbitration decision of the National Association of Securities dealers in court. |
