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July 10, 2015 at 12:15 PM
A federal jury in Central Islip has convicted an advisor and a part-time race car driver on charges of wire fraud, wire fraud conspiracy and money laundering conspiracy, the U.S. Attorney’s office for the Eastern District of New York announced Thursday.
The defendants were accused of stealing millions of dollars from business owners in Long Island and professional athletes.
The verdict followed 10 weeks of trial. Sentencing is scheduled for Nov. 20, when the defendants, Phillip Kenner and Tommy Constantine, a part-time race car driver, will face a maximum of 20 years’ imprisonment for each count and could forfeit up to $30 million they took from victims.
Kenner played hockey at Renssellaer Polytechnic Institute, where he met Joe Juneau, a teammate who would later go on to play in the National Hockey League. The now-retired Juneau testified that he introduced Kenner to other hockey players in the 1990s as Kenner was building his advisory career. According to the Justice Department, Kenner’s clientele included New York Islanders forward Michael Peca, U.S. Olympian Bryan Berard, and Stanley Cup champions Darryl Sydor, Bill Ranford and Sergei Gonchar, among others, “whose careers blossomed just as Kenner took over greater and greater control of their finances and wealth.”
According to the attorney’s office, the fraud started as early as 2003 when Kenner convinced several of his clients to invest $100,000 in a land development deal building luxury estates in Hawaii, and to open lines of credit worth at least $10 million. According to the Justice Department, witnesses testified that Kenner told them the lines of credit would be used to pay initial development costs and would be reimbursed when Lehman Brothers Holdings agreed to loan up to $105 million to the project in 2006.
However, prosecutors established that Kenner borrowed nearly all of his clients’ lines of credit for personal interests in unrelated real estate deals, transferred some of those funds to Constantine, and funded personal expenses for himself and Constantine.
According to the statement issued by the Justice Department, Kenner borrowed against one line of credit to pay monthly interest charges on others, ultimately wiping out his clients’ savings. When the scheme collapsed in 2008, he and Constantine tried to cover up the fraud by convincing investors that their money had been used to fund loans to a Mexican developer, Diamante Cabo San Lucas, which had defaulted on the loans. They told the investors that to get their money back, they should contribute to something they called the Global Settlement Fund, which would pay for litigation against DCSL.
