Mark Sanchez, a former New York Jets quarterback, along with a number of other professional athletes, are reported to have been duped out of approximately $30 million in a Ponzi-like scheme engineered by investment adviser, Ash Narayan.
Narayan gained the trust of Sanchez and his fellow team players, Jake Peavy and Roy Oswalt through religion and their interest in charitable works and concealed multiple conflicts of interest from investors, directing the athletes’ cash to The Ticket Reserve (TTR), as reported earlier today by Finance Magnates.
The three athletes sought low-risk, conservative investment strategies but Narayan ignored their requests and instead invested in TTR even though the company was in financial distress.
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Shamoil T. Shipchandler, head of the SEC’s Fort Worth office, said: “Narayan exploited athletes and other clients who trusted him to manage their finances. He fraudulently funneled their savings into a money-losing business and his own pocket.”
Sanchez originally agreed to make a $100,000 investment in TTR in mid 2011. Instead, Narayan forged documents and directed more than $7 million of Sanchez’s money to TTR. Narayan transferred more than $33 million from all investors to TTR in total, earning almost $2 million in hidden compensation.
At one point, about 80 percent of Oswalt’s major league salary was directed to the investment account. Narayan, meanwhile, invested at least $7 million of Oswalt’s money into TTR, without his authorisation, according to the complaint.
TTR was strapped for cash for years and was not able to generate sufficient revenue to cover its operating expenses. As a result, company officials routinely solicited new investor money to cover expenses, including making payments to earlier investors with no reasonable basis to believe that TTRs revenues would fund the repayment of those loans.
The SEC has obtained a court order freezing the assets of Narayan for violating antifraud provisions of the federal securities laws and is seeking re-payment of the fraudulent gains and preliminary and permanent injunctions.