Financial Adviser Accused of Stealing From Athletes

WASHINGTON (CN) — The SEC claims in court that a financial adviser stole millions of dollars from the accounts of two pro athletes and used some of the money to invest in movie projects.

In a civil complaint filed Friday, the U.S. Securities and Exchange Commission (SEC) accused Louis Martin Blazer III, owner of Pittsburgh, Pa.-based Blazer Capital Management, of taking $2.3 million from five clients "in unauthorized transactions."

The athletes that were allegedly victimized by Blazer are not named in the 16-page complaint. "Client 1" is a former pro athlete and "Client 2" is a current pro athlete, according to the SEC.

Blazer allegedly used some of the money he took without permission to invest in two movie projects, "Mafia the Movie" and "Sibling."

In one instance, he pitched the film projects to Client 1, who declined to make an investment — but Blazer took $550,000 out of his account anyway, the SEC claims.

When Client 1 demanded return of the money, Blazer took funds from Client 2's account to pay him back using "Ponzi-like payments," according to Friday's lawsuit.

Then, in 2013, Blazer allegedly lied to SEC investigators and "concocted a story that he put Client 1 in touch with Client 2 regarding the movies, and the two clients negotiated their own deal." He also produced fake documents, the SEC claims.

"This case concerns a fraudulent scheme executed by Blazer to surreptitiously take money from his clients to make unauthorized risky investments, to repay clients who lodged complaints concerning how their funds had been invested and sought a return of their money, or to fund investments made in the name of a Blazer-controlled entity," the complaint states.

The SEC says Blazer agreed to settle the charges without admitting or denying the allegations. The settlement is subject to court approval, with financial penalties to be decided by the court at a later date.

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