Disgraced former advisor emerges as key figure in college basketball scandal
A disgraced former financial advisor has emerged as a key figure in the mushrooming college basketball corruption scandal.
Louis Martin Blazer III, who was barred from the financial advisory industry last year by the SEC, has been a "cooperating witness" in the explosive criminal case involving fraud and bribery charges filed by federal prosecutors Tuesday against coaches and others connected with the game, the U.S. Attorney's Office for the Southern District of New York has confirmed. The case alleges that college basketball coaches have taken bribes, among other charges.
Blazer, a Pittsburgh-based money manager who is still listed as "principal owner" of Blazer Capital Management, also signed a plea agreement last week admitting guilt to five federal crimes, including securities fraud, wire fraud, identity theft and making false statements.
The scandal reached the top ranks of NCAA men's basketball powers today as the University of Louisville placed head coach Rick Pitino and athletic director Tom Jurich on administrative leave in the wake of the federal investigation.
FACES UP TO 67 YEARS IN JAIL
Blazer was accused by federal prosecutors of a 14-year-long wire fraud scheme in which he made "payments and loans to NCAA athletes in order to induce those student-athletes to retain the defendant as a financial advisor and/or business manager."
But under the plea agreement, Blazer will not be prosecuted for that and other alleged crimes if he "fully complies" with the government. He faces up to 67 years in jail for the five criminal counts filed against him.
Blazer had been working with federal authorities for over a year investigating allegations that college coaches were accepting bribes to steer basketball players to certain companies, managers and financial advisors after the players became professionals, the U.S. Attorney’s office said.
One complaint filed by the U.S. Attorney's office alleged that Chuck Person, a former NBA star with the Indiana Pacers and assistant coach at Auburn University, took more than $91,000 in bribes from Blazer in return for persuading Auburn players to become Blazer's client when they signed a professional contract.
Ten men, including Person and three other NCAA Division 1 coaches and one RIA, Munish Sood, the CEO and chief investment officer of Princeton Advisory Group, were charged with wire fraud, bribery and conspiracy, among other offenses, in three separate complaints running over 100 pages filed Tuesday in federal court.
Blazer was referenced multiple times in the complaints as CW-1, or "cooperating witness-1."
MAFIA MOVIE LED TO SEC CHARGES
Last year the SEC alleged that that Blazer stole $2.35 million from five clients. One of his professional athlete clients, the SEC said, turned him down when Blazer asked the client to invest in two movies, "Mafia the Movie" and "Sibling." But Blazer went ahead and took $550,000 out of that client's account for the film projects, according to the commission.
Earlier this year, the SEC ordered Blazer to pay almost $2 million to resolve allegations that he swindled millions of dollars from clients who were professional athletes.
Without admitting or denying the charges, Blazer, representing himself, agreed to settle the case.
Blazer gave former NBA star Chuck Person more than $91,000 in bribes, according to federal prosecutors.
Blazer was barred by the SEC from the industry last year but continued to run Blazer Capital Management, which describes itself on its web site as" the premier personal services advisory firm, specializing in catering to the unique needs of today’s professional athletes, entertainers and high-net-worth individuals and families."
The firm says its services include "a wide array of personal and professional advisory services … in virtually all areas of [our clients'] lives … [including] "preparing a budget, reviewing and paying the bills, purchasing a home, or planning a vacation."
Blazer, who previously worked for Merrill Lynch and Smith Barney, among other firms, is described on the website as being "focused on the unique needs and requirements of professional athletes and entertainers."
Blazer and his team, the website states, "have developed a significant network of contacts among players, coaches, agents, front office employees, and other stakeholders and service providers that enable him to provide highly customized and efficient financial services."
Blazer could not be reached for comment.