St. Louis Rams Quarterback AJ Feeley, US Soccer Player Heather Mitts, Philadelphia Eagles Tight End Brent Celek, and NFL player Kevin Curtis have filed a securities lawsuit against their former financial advisor William Crafton Jr. for allegedly defrauding them in the Westmoore Capital Ponzi scam and other financial schemes and causing them to lose millions of dollars. Crafton controlled and oversaw over $7.5 million of their funds. The plaintiffs are also suing Martin Kelly Capital Management, Suntrust Bank, and CSI Capital Management (as well as 50 John Does) for their negligent hiring and supervision of Crafton at the relevant times material to this lawsuit.
According to their Ponzi scam complaint, Crafton is the financial representative for at least 20 professional athletes, including members of the NFL, MLB, and NHL. The plaintiffs said that he often referred to these relationships to solicit new pro athlete clients. When he became the plaintiffs’ financial adviser, he managed nearly all of their assets and incomes that they’d obtained through their professional contracts until their relationship with him ended. They say that the three defendant firms also affiliated themselves with having professional athlete clients.
The plaintiffs maintain that from the beginning of their working relationship with Crafton, they each made it clear that they wanted to employ a conservative investment approach involving a portfolio of assets that were liquid and would help preserve their money. They claim that while Crafton assured them that he was a low risk taker and conservative money manager, in 2005 he began putting their money in risky, alternative investment that were either Ponzi scams or other fraudulent investments that were created or run by individuals that Crafton knew. These investments were not liquid and unsuitable for the plaintiffs and Crafton allegedly either had a financial stake or undisclosed relationship with each investment that they did not know about.
The plaintiffs are accusing Crafton of knowingly making false and material misrepresentations to them, providing them with poor quality wealth management services, placing their funds in unsafe investments, misappropriating their money for his personal purposes, and taking inappropriate steps to conceal the fraud scams he was committing against them. They believe that the defendant companies failed in their independent fiduciary duty when they let Crafton invest, in some instances, over 60% of the Plaintiffs’ assets in illiquid, risky, Ponzi scams and alternative investments.
The plaintiffs say they were never required to fill out investment objective statements or client profiles and customized investment programs were never developed for them. They also contend that their financial risks were not defined for them and industry standards allegedly weren’t followed to determine their risk tolerances or set up an appropriate plan for them. They are seeking disgorgement of management fees, compensatory damages, punitive damages, and legal fees.
Snookered in a Ponzi, Pro Athletes Say, Courthouse News, August 15, 2012
Read the Complaint (PDF)
More Blog Posts:
Securities and Exchange Commission Charges Former UGA Football Coach Jim Donnan Over Alleged $80M Ponzi Scam, Stockbroker Fraud Blog, August 16, 2012 Goldman Sachs Execution and Clearing Must Pay $20.5M Arbitration Award in Bayou Ponzi Scam, Upholds 2nd Circuit, Institutional Investor Securities Blog, July 14, 2012
Madoff Trustee Files Clawback Lawsuits Collectively Seeking Over $1B For BLMIS Feeder Fund Transfers, Institutional Investor Securities Blog, June 12, 2012
Throughout the US, our Ponzi scam lawyers represent investors that have suffered losses because of securities fraud. Contact Shepherd Smith Edwards and Kantas, LTD, LLP today.
The information contained in this Website is provided for informational purposes only, and should not be construed as legal advice on any subject matter. No recipients of content from this site, clients or otherwise, should act or refrain from acting on the basis of any content included in the site without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient’s state. The content of this Website contains general information and may not reflect current legal developments, verdicts or settlements. The Firm expressly disclaims all liability in respect to actions taken or not taken based on any or all the contents of this Website. Read More.