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Two felons in Henderson, Nevada, have been running a sports betting scam that's defrauded more than 600 investors nationwide out of $29.5 million so far, the Securities and Exchange Commission charged Friday in a suit filed in Nevada U.S. District Court.
Since Aug. 4, 2014, John F. Thomas, 74, and Thomas Becker, 72, along with accomplices, connived their victims into investing in six entities by promising them they would make 250%-600% returns from a pooled investor fund used to bet on sporting events, according to the suit. Those six entities, also named as defendants in the suit, were Einstein Sports Advisory, QSA, Vegas Basketball Club, Vegas Football Club, Wellington Sports Club and Welscorp.
The defendants claimed to own a proprietary handicapping system for sports betting and falsely told investors that investing with them was a "low-risk way to TRIPLE your funds in less than 6 months," according to the SEC. Despite the defendants' claims to investors, the six entities actually performed very little actual sports betting and the defendants "misappropriated the majority of the money raised from investors," the suit said. To date, the defendants had used, "at most, only 15% of investor funds to bet on sporting events," it said.
Thomas and Becker used the money they bilked out of investors to fund their lifestyles, pay commissions to brokers and agents or make Ponzi scheme payments, according to the suit. This wasn't the first scam for either of them. In 1991, Thomas — who was known at the time as John Rodgers and has also gone by the names Jonathan West, John Frank and John Marshall — and Becker pleaded guilty to federal felony charges of money laundering and conspiracy related to a pyramid scheme they ran together, according to the suit.
