Fraud Playbook

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Every football coach uses a playbook to help them formulate a winning game plan. Players study, memorize and practice the playbook ‘s offensive and defensive plays so they can beat their opponents. A North Carolina businessman, who ran two financial and investment services companies with a partner, formulated a fraud playbook and took advantage of professional athletes including National Football League (NFL) players.

The businessman carried out his scam by contacting prospective NFL players. He would reach out to prospective players while in college and offer services including bill payment, investment services and financial guidance. Once they were drafted, he would have them sign an agreement stating that he would provide financial services for an annual fee of between $15,000 and $50,000. (His game plan was to get them while they were young and inexperienced.)

He would then make suggestions that his clients use certain banks and requested access to their accounts, assuring them that he would only access the account to pay bills the players authorized.¬† (However, he used his access privileges to transfer more than $2.9 million for his own benefit without his clients’ knowledge or approval.) For more than six years, the financial advisor misappropriated client funds. (And he also failed to report the stolen money on his federal income tax returns for four years).

In addition to this crime, the man was also linked to a previous scandal involving college players and violations of National Collegiate Athletic Association (NCAA) rules although he denied that he did anything wrong. He was also involved in a case that was settled out of court regarding an NFL player ‘s $500,000 investment in a private hangar project that yielded nothing.

The 46-year-old pleaded guilty to wire fraud and filing a false income tax return for one year. He was sentenced to 65 months in prison and one year of supervised release. He also must pay $3.4 million in restitution including $2,960,295 to his victimized clients and $479,352 to the Internal Revenue Service (IRS).

One of his companies had its Certificate of Authority revoked for failing to file an annual report. His financial management company was dissolved. While this con thought he had all of the winning plays, the government surprised him with a secret defensive play that shut down his offensive moves. In the end, this fraudster was unable to carry the ball into the end zone and the victims ultimately won at this hard-fought game of fraud.

Source: A North Carolina businessman who advised professional athletes on investments has pleaded guilty to wire fraud and filing a false 2011 income tax return.

According to the Department of Justice, Michael Rowan, a resident of High Point, North Carolina, operated Capital Management Wealth Advisors Inc. (CMG) and APS Management LLC (APS), along with a business partner. Through his companies, CMG and APS, Rowan provided financial and investment services to professional athletes, including players in the National Football League (NFL). From May 2008 through August 2014, Rowan converted and misappropriated approximately $2.9 million from his clients’ bank accounts. For 2009 through 2013, Rowan failed to report the misappropriated funds on his federal income tax returns.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.