INDIANAPOLIS, Ind. – A money manager bilked a former Indianapolis Colts player out of millions of dollars over a period of several years, federal authorities say.
Kenneth Ray Cleveland, 63, Agoura Hills, Calif., was indicted on seven counts of wire fraud and three counts of money laundering in connection with the alleged scam.
Federal prosecutors said Cleveland stole $4.5 million over a decade from the player, identified only as “Individual A” in court documents. The player hired Cleveland to manage his money after coming into the league in 2003 and played with the Colts until 2015. He lived in Carmel from July 2012 through May 2015, court documents said.
“People place great trust in those who help manage and invest their hard-earned money,” said U.S. Attorney Josh Minkler. “Exploiting that trust for personal gain through lies and deception is a crime that this office takes very seriously.”
Financial experts say that tale is all too common and not just for athletes.
“When you’re as busy as an athlete, you’re not doing due diligence on a financial advisor,” said financial expert Pete “The Planner” Dunn.
The victim isn’t named in the indictment, but our news partners at the IndyStar have identified the player as former defensive end Cory Redding.
Cleveland allegedly told Redding he would invest his money conservatively and yield a significant amount of “interest” each month without depleting the principal. Redding then provided Cleveland with millions of dollars to invest.
Cleveland, however, spent the money, using more than $2 million of it as part of a Ponzi scheme to pay fake investment returns to other clients, prosecutors said. He used more than $2 million for personal expenses, including his home mortgage, credit card bills and payments to family members.
All the while, Cleveland assured Redding that his investments were safe and performing well. He even provided him with fake financial statements, prosecutors said, in order to win the player’s trust and get more money.
The scheme collapsed, however, when Redding asked for his money back and Cleveland couldn’t accommodate the request because he’d already spent it.
Redding of course isn’t alone. In recent years, former Colts pass rusher Dwight Freeney made headlines in a different case after he filed lawsuits claiming a former business associate defrauded him out of millions of dollars.
To help protect NFL players from investment fraud, the NFLPA established the Financial Advisors Program offering a list of advisors, but that’s a program some experts say is deeply flawed.
“The NFL has tried to do this, but they’ve had people get in trouble that were approved by the NFL,” said Dunn.
Dunn says there are resources like https://brokercheck.finra.org/ that everyone can use to make sure their investors are legit.
“Oddly enough NFL players need to do what everyone seeing this should do. Go to a place like BrokerCheck and see if there are any issues with that advisor,” said Dunn.
Requests for comment from the Colts and the NFLPA were not returned.
The FBI investigated the case. The charges carry maximum sentences of 10 to 20 years in prison and a maximum fine of $250,000.