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The Betting Line – ‘Zero Pay Off’ On a Sports Betting Scam

January 2, 2020

[Image: Sports Betting / Las Vegas]


by Howard Haykin



We’re more than a year into legalized sports betting in the United States, and it’s a comfort knowing that “Big Brother is watching you” and looking out for your well-being. Well, for some of us it was perhaps “too little too late.”



The Securities and Exchange Commission (“SEC”) recently reported that it busted a sports betting scam that raised at least $29.5 million from over 600 investors. Two convicted felons, John Thomas and Thomas Becker, master-minded the scheme, and their network of 150 brokers and agents enticed investors from more than 40 states to invest in a pooled fund that would be used for betting on sporting event.


Investors were told that Thomas and Becker had a proprietary handicapping system that could “grow money 10 times faster than Warren Buffet.” Actually, investors were promised 250%-600% returns on their investments, and others were promised a “low-risk way to TRIPLE your funds in less than 6 months.”


Once on board, investors were given access to personalized spreadsheets that tracked their accounts, which increased or decreased based on falsified and exaggerated results of supposed sports betting. Yet, investors were only too happy to believe that their investments performed as promised, when they had not. And investors who sought payment on their winnings were often willing to accepted explanations that their funds could not be disbursed because all the winnings were in cash and could not be deposited into bank accounts. In actuality, Thomas and Becker spent little on sports betting, and instead used most of the investors’ money to fund their lifestyles, pay commissions to brokers and agents, or make Ponzi-like payments to other investors.



INVESTORS LULLED BY FAR-FLUNG DREAMS.    Once again, investors chased promises of exaggerated investment returns and then were lulled into believing fictitious performance figures from the perpetrators. Prudent investors recognize red flags when they are promised returns that are unrealistically too good to be true



[For further details, click on SEC Litigation Release, or SEC Complaint.]