11/15/13 An indictment against financial advisor Phil Kenner (he used to drive USF2000, Grand AM and was part owner of Al Jr.'s team in IRL along with Galles. He ran the Playboy racing cars.) for wire fraud and money laundering in connection with several alleged investment scams was unsealed in Brooklyn federal court Wednesday following a more than four-year government investigation. Kenner, 43, and his business partner Tommy Constantine, 47, were arrested by the FBI and charged with fleecing Kenner's clients to the tune of more than $15 million.
The Kenner-Constantine case was tabled for much of 2012, according to three people briefed on the investigation, as prosecutors in Manhattan devoted massive resources to building a case against SAC Capital, the hedge fund that recently pleaded guilty to criminal insider trading charges in a record-setting $1.8 billion settlement. The Kenner-Constantine case was moved to the U.S. attorney's office for the Eastern District (which covers Brooklyn and Long Island), where a new set of prosecutors worked on it.
The government alleges that Kenner and Constantine conned at least 13 professional hockey players into investing in a prepaid credit card company, a real estate development in Hawaii, and an escrow account for legal expenses related to Mexican land deals; but then secretly spent the money on personal expenses, covert real estate deals, and secret investments. (The government's press release announcing the indictment can be found here.)
Attempts to reach Kenner for comment were unsuccessful. By email, Constantine's lawyer Ed Little says it's "shocking" that an FBI case agent, who he didn't name, "somehow induced" the Eastern District to bring an indictment. He adds, "we look forward to an acquittal in court." Ron Richards, the lawyer who was once in charge of the escrow account for the Mexican legal fund, did not respond to a request for comment. Fortune previously investigated many of the allegations in this case and in that article both Kenner and Constantine denied any wrongdoing. More at CNN Money
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