Having millions of dollars sounds good until it's time to hold millions of dollars. Most people, even athletes, have no clue what to do with that kind of money. It also makes them the targets of big financial leeches.
Take the case of Denver Broncos QB Mark Sanchez. He thought he was doing the smart thing—saving, not spending his game checks. It turns out he was handing his money to a stone cold fraud, and now he's out $7.8 million.
From yahoo.com:
Sanchez, San Francisco Giants pitcher Jake Peavy and former Houston Astros pitcher Roy Oswalt were named by federal investigators as being the victims in the case, according to the Associated Press. An adviser, Ash Narayan, put about $33 million of the athletes' money into a ticket business without their knowledge. Even worse, the lawsuit filed by the Securities and Exchange Commission against Narayan says he was given a $2 million finder's fee from the ticket company for directing the money its way. The ticket company, The Ticket Reserve, had lost money for four straight years.
"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," Shamoil T. Shipchandler, director of the SEC's Fort Worth regional office, said in a statement.
According to Vice.com, Narayan was listed as an NFLPA-approved financial adviser on its site.Vice reported that Sanchez directly deposited game checks into investment accounts managed by Narayan. Although Narayan claimed to be a certified public accountant, he never had a CPA Vice said.
The ol' Ponzi Scheme. Not as old as America itself, but close enough. Add this to the list of reasons why "investment" can be one of the best euphemisms for "scam."
