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May 06, 2016 at 12:19 PM
The Securities and Exchange Commission announced fraud charges against a Pittsburgh-based financial advisor accused of taking money without permission from the accounts of several professional athletes in order to invest in movie projects and make Ponzi-like payments.
According to the SEC’s complaint filed Friday in federal court in Manhattan, Louis Martin Blazer III, who founded Blazer Capital Management as a “concierge” firm targeting professional athletes and other high-net-worth individuals as clients, took approximately $2.35 million from five clients without their authorization so he could invest in two movie projects.
When SEC examiners uncovered the unauthorized withdrawals that Blazer made from his clients’ accounts and asked him to explain the transactions, he lied and produced false deal documents that he created after the fact in a failed attempt to hide his misconduct.
“We allege that Blazer grossly abused the trust placed in him by his clients and repeatedly took their money without authorization. And when our examiners put him on the spot, he resorted to false statements and false documents,” Andrew M. Calamari, director of the SEC’s New York Regional Office said in a statement.
In 2010, according to the SEC, Blazer agreed to raise money for two film projects, “Mafia the Movie” and “Sibling.” Between 2010 and 2012, Blazer repeatedly took money from his clients without authorization to invest in the films.
In one instance, Blazer actually pitched the movie project to a client – a former professional athlete – as an investment opportunity, but that client expressly refused to make the investment. Despite that, Blazer allegedly took $550,000 from the client’s account and invested the money in the film projects.
The SEC further alleges that the client later learned about Blazer making the unauthorized investment in the movies and demanded repayment, even threatening a lawsuit. According to the SEC, Blazer then took money without authorization from a different client – a current professional athlete – to repay the first client in Ponzi-like fashion.
