Money Players

Kirk Wright commits suicide

Associated Press is reporting that Kirk Wright, founder of International Management Associates, committed suicide today in jail. Wright was convicted Wednesday of operating an investment scheme that bilked millions of dollars from clients, including many NFL players.

Kirk Wright bilked investors, including many current and former NFL players out of at least at least $20 million. He fraudulently provided investors with reports claiming his firm, International Management Associates, had over $180 million in assets. But when he was finally busted, there was less than $500,000 accounted for. In February 2007, Wright was ordered to pay nearly $20 million as part of a default judgment by the U.S. District Court in Atlanta. In March 2007, six current and former players sued the NFL and its union, seeking to recoup $20 million they lost in this fraud scheme. The NFLPA, in response to significant financial losses experienced by several NFL players, began the Financial Advisor Program, a first-of-its-kind program aimed at protecting players against incompetent and fraudulent advisors.

I wrote an article on Kirk Wright in Sports Business Journal: "Pro athletes must use caution to avoid financial runaround" (August 28, 2006). I also used this as a case study in my book, Money Players.

Former Denver Broncos player Steve Atwater was hired by Wright to solicit investors for IMA and also invested $2.7 million of his own money. After learning of Wright's death Atwater told the Atlanta-Journal Constitution, "It's a tragic deal all around."

Sad story. Hopefully there are some valuable lessons learned here.

--Marc Isenberg

Financial end-arounds (updated)

On Febuary 12, 2006 Kirk Wright was ordered to pay nearly $20 million as part of a default judgment by the U.S. District Court in Atlanta. This would be great news if Kirk Wright had this kind of money in his accounts. Wright fraudulently provided investors with reports claiming his International Management Associates funds had over $180 million in assets. But when he was finally busted, there was less than $500,000 accounted for.

Here's an I wrote last year in the Sports Business Journal on personal finance and professional athletes.

Pro athletes must use caution to avoid financial runaround

By Marc Isenberg
Published August 28, 2006: Page 13

When the infamous Willie Sutton was asked why he robbed banks, he said, “Because that’s where the money is.” If Sutton were alive today, perhaps he’d target professional athletes. Instead of his risk-taker’s bravado, he could steal millions from unsuspecting pro athletes with simple razzle-dazzle and lies.

While professional athletes are among the most financially fortunate members of society, they are also among the most vulnerable. Young, financially inexperienced and often surrounded by yes-men, professional athletes are magnets for scam artists.

Kirk Wright, founder of hedge fund International Management Associates, is the latest to be accused of defrauding current and former pro athletes. From 1998 to 2005, which The Wall Street Journal points out included the worst bear market since the Great Depression, Wright reported average annual returns of more than 27 percent. The returns apparently were fabricated. The Securities and Exchange Commission estimates that Wright, who was arrested by FBI agents in Miami on May 17 and faces 21 counts of federal mail fraud and three counts of securities fraud, bilked investors out of at least $115 million. <Read full article in PDF file>