A New York jury Thursday convicted a financial adviser and his partner, a former race car driver, in a multimillion dollar fraud that victimized several current and former professional hockey players.
Phillip A. Kenner, the adviser, and Tommy C. Constantine, his associate and founder of the Playboy Racing Team, both of Scottsdale, Ariz.,
were found guilty on counts of wire fraud, wire fraud conspiracy and money laundering conspiracy.
The two men put more than $20 million of their clients' money into real estate projects, including developments in Hawaii, a start-up credit card business and other deals they controlled.
Mr. Kenner also convinced his clients — 12 of whom once played in the National Hockey League and one who still does — to establish lines of credit from which Mr. Kenner stole $10 million, according to the indictment.
A former hockey player himself at Rensselaer Polytechnic Institute, Mr. Kenner was introduced to several professional players in the 1990s through a friend from his college team. His clients included former New York Islanders forward Michael Peca and other NHL players, such as Bryan Berard, Darryl Sydor, Bill Ranford and Sergei Gonchar, according to a statement from the U.S. Attorney's office.
The convicted men face a maximum of 20 years in jail on each count as well as forfeiture of up to $30 million they made on the frauds.
Indicted in October 2013, the pair were found guilty by a Central Islip, N.Y. jury on July 9 following a trial that lasted 10 weeks and included 39 government witnesses and hundreds of exhibits.
Between August 2002 and April 2013, Mr. Kenner and Mr. Constantine persuaded their clients to invest money in real estate projects, small privately held companies and a legal defense fund. The two diverted the funds to their own bank accounts for their personal use, court documents showed.
“Driven by personal greed, [Mr.] Kenner and [Mr.] Constantine spent years lying to investors and stealing their money, and then attempted to conceal their fraud by repeatedly and brazenly avoiding responsibility, shifting blame and scapegoating others,” Kelly T. Currie, acting U.S. Attorney for the Eastern District of New York, said in a statement. “Today, their scheme has been brought to an end.”
Professional athletes and other investors must be cautious when selecting a financial adviser, according to an investigator in the case.
“Their success in defrauding so many individuals reinforces how important it is to use care when investing, no matter how much confidence you have in the individual or company you are investing with,” Shantelle Kitchen, Internal Revenue Service special agent in charge, said in a statement.
