NEW YORK, N.Y. - Two con men cheated several former and current National Hockey League players out of at least $15 million by persuading them to invest in a phoney Hawaiian real estate venture and other scams, then diverting the funds into their own pockets, prosecutors said Wednesday.
Financial adviser Philip Kenner used the players' money to make his own investment in a tequila company in Mexico, investigators wrote in court papers. Former race car driver Tommy Constantine took money to finance racing teams in California, they added.
"Kenner exploited his personal relationships with these players in pursuit of his own lucre," George Venizelos, head of the New York FBI office, said in a statement announcing the arrests.
FBI agents picked up Kenner, 43, and Constantine, 47, on Wednesday morning at their homes in Scottsdale, Ariz. They were awaiting a court appearance in Phoenix on wire fraud and money laundering charges filed in federal court in Brooklyn.
Constantine maintains his innocence, said his New York City lawyer, Edward J.M. Little.
"We're really shocked the federal prosecutors have gone forward with this case," Little said. "We've been in discussions with them a long time and attempting to co-operate."
The name of Kenner's attorney wasn't immediately available.
Court papers didn't name the alleged victims. But in recent years, several players have publicly challenged Kenner and Constantine with civil lawsuits.
Former NHL star Joe Juneau accused Kenner of financial fraud in a 2008 lawsuit filed in Los Angeles. Another retired player, Owen Nolan, won a $2.8 million arbitration claim against Kenner. And former player Ethan Moreau has brought similar claims against Constantine.
According to court papers filed last year, the Securities and Exchange Commission was investigating allegations that Kenner and others had solicited $20 million from 19 investors for a phoney Mexican real estate venture, then kept the money for themselves.
In the latest court papers, prosecutors allege the seeds of the fraud date to the late 1980s, when Kenner and Juneau were college roommates before Juneau went on to have a long career playing with the Boston Bruins, the Washington Capitals and other NHL teams. Kenner used the connection to start an investment firm catering to pro players, the papers say.
Kenner talked the players into investing in Hawaiian land that he told them would be developed and resold for a hefty profit, the papers say. He instead funneled about $2 million to a holding company run by Constantine, they say.
Aside from race cars, Constantine "also used the money to make payments on personal mortgages and to pay for meals, limousines, rental cars and cellular telephone expenses," the papers say.
Kenner persuaded the hockey players to also invest a Constantine-owned company that sold prepaid debit cards and to donate to a legal defence fund for a player tied up in litigation over his investments, the paper say. The men stole millions of dollars of that money to invest in the tequila company and to pay hotel, airline and other bills, they say.
In arguing that both men should be jailed without bail, prosecutors alleged that Kenner has access to large amounts of cash and a network of associates in Mexico, factors that make him a flight risk. They claim he told one associate that "at a moment's notice, he could pack his duffel bag full of money, get in his car and never be seen again," the court papers say.
The papers also cite Constantine's conviction and sentence to six years in prison on a drug-trafficking charge in 1993.
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