Promises of gold mines: Ex-NFL player gets prison for running Ponzi scheme
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A former NFL linebacker was sentenced to two and a half years in federal prison this week after he admitted to running a Ponzi scheme involving West African gold mines, properties in Central America and other ventures.
John Robert Leake, a former Atlanta Falcons and Green Bay Packers player, took millions of dollars from friends and acquaintances for supposed investment schemes. Leake used the money to gamble, according to federal court filings from the Central District of California.
“[Leake] stole millions of dollars from friends and acquaintances through bald-faced deception,” federal prosecutors wrote in court filings. He “lied to those who considered him a friend, convinced them to invest in business opportunities that were largely non-existent, and used their funds to either pay his personal expenses, or pay back those he had already stolen from in an effort to keep his scheme afloat.”
Leake, 43, defrauded his investors of $5 million over the course of the five-year scheme. He pleaded guilty in September to one count of wire fraud and one count of transactional money laundering, according to the U.S. Attorney’s Office.
U.S. District Judge John F. Walter sentenced Leake on Monday and ordered him to pay $5 million in restitution to the six victims he scammed.
“Mr. Leake committed these crimes based largely on his being a gambling addict and he feels terrible about deceiving his friends to fuel that addiction,” Leake’s attorney, Evan J. Davis told USA TODAY. “Fortunately he has turned a corner with his treatment and is on the right path.”
Leake played for Clemson University from 2000 to 2003 and was a part of the 2003 Peach Bowl-winning team. The Tennessee Titans signed him as an undrafted free agent in 2004. In 2005, Leake played for the Atlanta Falcons and Green Bay Packers. He resigned from the Falcons in his final season in 2006.
Gold mines in Ghana and Alaska, real estate deals in Southern California, Costa Rica and the Middle East.
Leake’s pitches to investors were bold and exotic. He swept up six friends and mutual acquaintances in the scheme, convincing them to pay over $8 million into his alleged projects between 2015 and 2020, according to court filings.
A portion of the money was invested but over $5 million went instead to Leake’s personal benefit. He used the money for gambling, to cover personal expenses and make payments to victims to lull them into trusting him, according to the plea agreement.
Personal expenses included paying credit card bills, car payments and rent, prosecutors said.
The operation fits the classic definition of a Ponzi scheme where someone takes money from investors for a fraudulent business product. Investors think money they receive back is legitimate revenue from the business but it actually comes from newer investors. The scheme is structured like a pyramid, with the bottom rung of investors paying to fuel the profits of a few at the top.
More: What exactly is a Ponzi scheme?
Court filings leave Leake’s six victims unnamed but describe them as friends and mutual acquaintances.
The first victim thought he was investing in gold mines in Ghana and Alaska, as well as other financial product schemes, according to the plea agreement.
A small amount of the $1.7 million he paid Leake in fact did go to gold mines but the financial product schemes were non-existent. Over $1 million went to Leake.
The pair met through mutual friends around 2014, according to court filings.
Leake’s second victim was a friend, the plea agreement says. Leake ensnared him, the victim’s father and two of their acquaintances.
He went to great lengths to deceive his friend, who was pitched investments in luxury real estate ventures in Los Angeles and Costa Rica.
The alleged plan in California was for Leake to use the funds to cover years’ worth of rent on luxury homes that they would then sublet for an even higher rate and keep the profit.
Leake took over $1 million. But the properties didn't exist. The friend also gave Leake $600,000 to invest with a “prominent billionaire” whom Leake falsely claimed to do business with, court records say.
Leake scammed the same friend into investing around $500,000 in “the Costa Rica property,” prosecutors said. Leake provided forged contracts and checks but never sent to the purported developer.
Over two years, the friend lost about half of what he invested. Leake paid back the rest using payments from other victims, including a pair of investors Leake met through the friend.
Leake’s final victim — someone he met at dinner with friends — lost the greatest sum: $2.8 million, court filings say. Leake used the money to pay the other victims, rather than invest in properties in Dubai as he had promised.
In a letter to Walter, the judge in the case, Leake portrays the moment his gambling-fueled Ponzi scheme caught up with him as an almost biblical reckoning.
“I fell to my knees, sobbing, and began to reflect on all the unforgettable actions I had caused my friends over the years,” Leake says in the letter about the day he learned of his indictment. “I understand the seriousness of my actions and the impact they have had on the six victims I have hurt. I deceived my friends by lying and fabricating reasons for taking money from them.”
He checked into a mental health clinic in Houston later that month and stayed for around 60 days, according to the letter. Leake was living just north of Dallas at the time.
“I remember feeling lost during the first week, trying to understand how I could have gone down the dark hole from which I thought I could never escape,” he said.
The treatment involved Leake joining an Alcoholics Anonymous group as well as groups for gambling and narcotics, the letter says.
He said he deleted gambling apps off his phone and broke off communication with bookies, casino hosts and friends from gambling circles.
Leake said he hopes to be allowed to speak at a conference on addiction in April and to return to work at the clinic after serving his sentence.
“It is important to me to start paying back all six victims,” he wrote in the letter.
Contributing by Terry Benjamin II, a public safety reporter with The Greenville News, part of the USA TODAY Network.
Michael Loria is a national reporter on the USA TODAY breaking news desk. Contact him at [email protected], @mchael_mchael or on Signal at (202) 290-4585.
This article originally appeared on USA TODAY: Ex-NFL player stole $5M from friend in Ponzi scheme. What was it for?
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