Ex-financial adviser accused of running Ponzi scheme with pro athletes’ money |
Local Stories

Ex-financial adviser accused of running Ponzi scheme with pro athletes’ money

A former Pittsburgh financial adviser siphoned $2.35 million from the investment accounts of professional athletes to invest in movies, including a 2013 horror flick shot in the city, and replaced some of the misappropriated funds with “Ponzi-like payments” when he was discovered, securities regulators alleged Friday in announcing the settlement of civil fraud charges.

Louis Martin “Marty” Blazer III, founder of Blazer Capital Management in the South Side, was accused of swindling money from five clients, including at least two professional athletes, between 2010 and 2012, according to a complaint filed in Manhattan federal court by the Securities and Exchange Commission. The complaint did not name any of Blazer’s clients, and the SEC declined to disclose them.

Blazer, who is no longer a registered financial adviser and declined to name the clients, told the Tribune-Review that the incidents stemmed from “miscommunication that got out of control.”

“It did happen so long ago, and we’ve come to terms and settled the whole thing,” he said, adding that professional athletes can have “selective memory” about their financial decisions.

Blazer agreed to settle the charges without admitting or denying the allegations, the SEC said. The agency said the settlement requires court approval. The judge will determine financial penalties and monies that Blazer has to repay, the SEC said.

“We allege that Blazer grossly abused the trust placed in him by his clients and repeatedly took their money without authorization,” Andrew Calamari, director of the SEC’s New York regional office, said in a written statement.

The SEC alleged that Blazer, whose firm catered to athletes and other wealthy individuals, tried to persuade an unidentified professional athlete to invest in two movie projects for which Blazer was raising money. The athlete refused to invest, but Blazer forged documents to make it appear that he received authorization to move money from his client’s account six times in 2010, the complaint alleged.

Blazer invested the money in the movies “Mafia the Movie” and “Sibling,” the complaint alleged. “Sibling,” later renamed “A Resurrection,” was shot in Pittsburgh and released in 2013.

When the athlete discovered the unauthorized transfer in 2012, he demanded Blazer return the money. Blazer allegedly made unauthorized transfers of $650,000 from the accounts of another unidentified professional athlete to repay the first client in a “Ponzi-like” scheme, the SEC said.

Ponzi schemes are a type of financial fraud in which money raised from one investor is used to make payments to other investors.

Blazer has faced other legal cases linking him to professional athletes, including Kevan Barlow, a retired NFL running back and University of Pittsburgh standout.

Barlow alleged in 2011 that Blazer had “misappropriated, mismanaged, squandered, and/or stole millions (of dollars)” from him, according to a complaint with the Financial Industry Regulatory Authority, or FINRA, a private organization that regulates investment brokers.

The complaint alleged that Blazer declined to provide Barlow with comprehensive accounting of his finances or investments from 2001 to 2009. In 2010, Blazer informed Barlow that he had “slightly over $100,000,” despite having earned an estimated $13 million to $15 million between 2003 and 2006, the complaint said.

Barlow’s allegations, which sought compensatory damages in excess of $4 million and punitive damages of $12 million, was settled in 2012, records showed.

Barlow could not be reached. His attorney, David Strassburger, declined to comment, citing a confidentiality agreement in the settlement.

In a separate FINRA record from 2011 involving allegations that $4 million was misappropriated from a client’s account, Blazer blamed “a professional football player who over the same period of time withdrew money — I believe recklessly — and despite numerous warnings about his spending habits continued to deplete his accounts.”

New Jersey-based First Choice Bank sued Blazer in 2013 and 2014 for a series of unpaid loans for which Blazer signed as a guaranty, Allegheny County court records show. The loans, ranging from $10,000 to $50,000, were taken out in 2011 by athletes including former Pitt basketball standout DeJuan Blair, former Cleveland Browns wide receiver Greg Little and former NFL running back Anthony Allen.

An attorney for First Choice Bank who handled the cases did not return a call for comment. Bank officials could not be reached.

Blazer’s license as a financial adviser expired in 2012.

Alex Nixon and David Conti are Tribune-Review staff writers. Reach Nixon at 412-320-7928 or [email protected]. Reach Conti at 412-388-5802 or [email protected].

TribLIVE commenting policy

You are solely responsible for your comments and by using you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.