http://sports.yahoo.com/blogs/nfl-s...lked-out-of-millions-in-scheme-161536161.html He lost almost 8 millions to a NFLPA approved financial adviser who wasn't a CPA although he said he was. The adviser invested the money in a firm that lost money 4 years in a row, but he got 2 million bucks as finder's fee. All in all, 30 mil was lost... That is a "slight" oversight on behalf of the NFLPA.... "Peavy and Sanchez say they believe their signatures were forged by Narayan to transfer money from their accounts to the ticket business. The AP reported $15.1 million was taken from Peavy, nearly $7.8 million from Sanchez and nearly $7.6 million from Oswalt. The players said they hired Narayan in part because "he represented himself as a devout Christian involved in charitable causes," the AP reported. "
These schemes will never end no matter how many rules or big guys they put at the top ....there are tens of thousands of these schemes out there right this second that are stealing people's cash....
I don't fully understand how all that works. So do these football players just hand over lump sums of cash to a manager without any knowledge of what's being taken out of the account? It just sounds ludicrous that a player could authorize $100k to go into an investment but then get millions taken out of his account without any knowledge whatsoever for years and years.
I believe that many of them sign POA's for representatives who then have all sorts of access to their finances...At least I had read that in various scams involving athletes in the past...However, the allegations from Peavy and others that this guy forged their signatures makes it appear to be more egregious. These guys all have such a bullseye on them...$20-$25 mil a year contracts and most of them would rather have someone else handle their investments...I'm actually surprised that we don't hear about these scams more frequently.
I assume he was supposed to locate good investments for them (and hold the money until he finds one) and put the money in if he gets a personal OK from the investors, like Sanches. Instead he forged signatures and put the money to good use, unfortunately the business didn't work out. So the Ticket business itself might have been a Ponzi (or most likely just badly ran), but what the adviser did was straight fraud (false signatures) or embezzlement (misappropriation of funds), not a Ponzi... I guess he did it for the fees, if the money is just sitting there he is not entitled to the fees.
The NFLPA should partner up with and recommend a low cost shop(s) like Vanguard/Fido and have a robo advisor index them. I will guarantee that over time, 97 out of 100 players that did that would out-perform the guys who try to start businesses and invest with hedge funds.
Easy pickings most professional athletes are unsophisticated regarding their finances and Jake Peavy may soon be out of a job to boot....