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Saturday, July 22, 2006

Kirk Wright - NFL Hedge Fund Scandal Czar's Bond Revoked

According to the blog Letter of Apology, Kirk Wright, the focus of the NFL Hedge Fund Scandal, had his bond revolked by U.S. District Judge Clarence Cooper. The AP Story is below

Judge revokes bond for hedge fund manager accused in fraud scheme
Associated Press

ATLANTA - A federal judge revoked bond Thursday for a hedge fund manager accused of bilking investors ranging from NFL players to his own mother out of millions of dollars after a prosecutor disclosed the suspect kept a journal in which he mused about the best place to flee.

U.S. District Judge Clarence Cooper said no amount of bail he could set would guarantee that Kirk Wright would appear in court to face fraud charges.

Cooper's decision to detain Wright pending trial reverses a magistrate judge's ruling in Florida to allow Wright to remain free if he posted $1 million bond.

A group of people who say they were victims of Wright's scheme clapped and cheered when Cooper announced his ruling in federal court in Atlanta. The group included former Denver Broncos safety Steve Atwater and former Philadelphia Eagles safety Blaine Bishop.

"That's why I came. I wanted to see him," Bishop said afterward. "He was a coward and wouldn't look at anyone, which is what he is."

Atwater said "most definitely" when asked if he was satisfied with the judge's ruling. The two are among a group of seven current and former NFL players who have sued the league and the players union seeking to recover the $20 million they lost in the scheme.

At the hearing, Assistant U.S. Attorney Justin Anand said that when Wright was captured in Miami Beach on May 17, three months after a warrant was first issued for his arrest, a journal was found in his possession in which Wright listed various U.S. cities and the "pros and cons" of hiding in each one.

The journal also included passport information and the phone numbers of embassies in Mexico and the Dominican Republican, which Anand asserted showed Wright was thinking about fleeing the country.

Nearly $30,000 in cash, several fake ID's and seven prepaid cell phones were also found in the luxury hotel room where Wright was staying when he was arrested, Anand said, adding that Wright withdrew $500,000 the month before the first warrant was issued by a Superior Court judge.

"This is a very obvious case of a risk of flight," the prosecutor said.

But defense lawyer Natasha Silas said Wright was in almost daily contact with his previous attorney for a month after the federal warrant was later issued and was trying to negotiate his surrender.

Silas said that if Wright was really intent on fleeing, he would have left the country, rather than staying in Florida, where his mother lives.

Silas also said that Wright and his wife had received death threats from some of his investors and he wanted to make sure his family was safe before turning himself in.

"I would concede that the actions of Mr. Wright when viewed at first blush do look like someone who is on the run," Silas told the judge.

But, she added, "It's a lot more complicated than that."

While the prosecutor described Wright's mother as one of his victims, the defense lawyer said his mother and other relatives wouldn't be willing to post bond for him if they were truly victims. She asked the judge to keep the $1 million bond set in Florida.

Cooper sided with the government, saying the "preponderance of the evidence" suggests Wright is a risk of flight.

According to authorities, Wright and his company collected as much as $185 million from at least 500 investors since 1997 and misled some of them to believe the value of those investments was increasing, using false statements and documents.

As recently as Jan. 25, the firm reported $166.6 million in assets spread across five hedge funds it manages and advises. That money is now missing, according to the Securities and Exchange Commission.

The prosecutor said Wright used some of the money on personal items, including property, jewelry and to make child support payments to an ex-wife.

In the lawsuit filed June 23 by the football players, they claim the players union endorsed the services of the investment firm Wright headed even though Wright had liens against him. The NFL has said the suit does not have any merit, while the union has declined to comment.


Anonymous said...

It will be interesting to learn just how much money Wright's relatives, who were willing to bail him out, actually made in the scam that he ran. Let's hope that Atwater and the other players can settle with the NFL union who recommended this con man and his cronies on their approved list.

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