On Tuesday, federal investigators said several professional athletes that include Jake Peavy a pitcher for the San Francisco Giants, Roy Oswalt a retired pitcher for the Houston Astros and Mark Sanchez a quarterback for the Denver Broncos, were cheated out of over $30 million by a Ponzi-like, investment adviser scheme.
In a May lawsuit filed in Dallas, the Securities and Exchange Commission alleged that Ash Narayan told clients he was promoting an investment strategy of low risk for their monies but he was actually putting over $33 million if their money into an online entertainment and sports ticket business based in Illinois called The Ticket Reserve. The business had been losing money for four years.
It also said that Narayan did not tell the investors that The Ticket Reserve had paid him close to $2 million for finder’s fees for directing the investor’s money to their company.
The SEC’s regional office in Fort Worth said in a prepared statement that Narayan had exploited the athletes and his other clients who had put trust in him to handle their finances.
The statement added that he fraudulently funneled the savings of his investors into a business that was losing money as well as into his own pocket.
The lawsuit by the SEC alleges that The Ticket Reserve, Narayan, Richard Harmon the CEO of the ticket company and its COO John Kaptrosky, violated provisions of antifraud of the federal securities law and an antifraud rule of the SEC and has accused Narayan of also violating antifraud provisions of the 1940 Investment Advisors Act.
On Tuesday, the SEC announced that it had obtained an order from the court that froze all assets of Harmon, Kaptrosky and Narayan. A receiver was appointed as well to manage the online ticket business. No criminal charges were filed.
An attorney representing Narayan said that his client has sought at all times to act in the best interests of his clients.
According to documents in the court, Narayan directed over $30.4 million into the online ticket business from three former and current athletes including $15.1 million of Peavy’s; close to $7.8 million of Sanchez’s; and almost $7.6 million of Oswalt’s.
In statements that were filed as part of this lawsuit Sanchez and Peavy, each said they believed that Narayan had forged their signatures so he could transfer monies from their accounts over to the ticket business.
Peavy said he was working to put aside $20 million for when he retired from baseball.