Six Las Vegas Sports Betting Funds Being Controlled by Ex-Con Ponzi Scheme Operators, Investor Payouts in Limbo
Posted on: May 6, 2019, 06:19h.
Last updated on: September 4, 2019, 11:48h.
Two men imprisoned in the 1990s for operating a Ponzi scheme shell company that pretended it supplied copy machines to financial institutions are in charge of at least $1 million invested in six Las Vegas several sports betting mutual funds, the Las Vegas Review-Journal has discovered.
John F. Thomas III — who was apparently born John F. Rodgers but is also known to investors as John Frank, John Marshall, and Jonathan West — operates six funds that are currently being scrutinized by the Securities and Exchange Commission because investors have claimed their dividends have dried up.
These are Einstein Sports Advisory, Quantum Sports Advisory, Wellington Sports Club, Vegas Basketball Club, Vegas Football Club and Sports Psychometrics.
Nevada Secretary of State records show that one Thomas J. Becker is assisting Thomas with management of these funds, which exactly matches the name of a man who was imprisoned with Thomas over the copy machine fraud.
What’s a Sports Betting Fund?
Sports betting mutual funds are essentially “hedge funds” in which pooled capital is wagered on sports rather than invested in securities.
Nevada legalized the practice in 2015, for the first time allowing sports books to accept investment from out-of-state individuals and businesses. Lawmakers hoped this would bring extra money into the sports betting sector but, in reality, many sports books found the regulations involved to be onerous, and preferred not to accept the mutual funds’ money at all.
And yet, despite the regulations, there have previously been concerns about financial mismanagement. A spokesperson for the Nevada Gaming Control Board told LVRJ that, as far as he was aware, Thomas’ funds were not operating illegally in Nevada.
‘Faster Than Buffett’
LVRJ said it spoke to about ten investors who had been struggling “for months or even years” to claim their returns, despite claims by the Wellington Sports Club website to have generated over 600 percent compounded gross profit in each of the past two years.
Thomas has claimed in his promotional materials that his secret lies in betting on favored teams using multiple parlay bets or round robins, which would be an unusual and high-risk method for a successful professional gambler.
“We grow money a million times faster than Warren Buffett … actually we grow it a quadrillion times faster. Just can’t move it into the banks that fast. Online sports betting solves the bank cash flow problem,” Thomas told one investor, before adding that the expected passage of a “national sports betting bill” will soon facilitate the movement of money via nationwide sports betting accounts.
No such bill has been proposed, nor would it be likely to pass if it were.
While the SEC has been in contact with several investors, which suggests it is looking into Thomas’ operations, the commission declined to share details with LVRJ reporters when contacted Friday.
A lawyer for both Thomas and Becker told LVRJ there were two sides to every story and that his clients were looking forward to “providing their perspective.”