A financial adviser in California faces allegations that he defrauded a former Indianapolis Colts player out of more than $4.5 million in investments.
On Friday, U.S. Attorney Josh Minkler announced the indictment of Kenneth Ray Cleveland, 63, of Agoura Hills, California (near Los Angeles). Cleveland faces seven charges of wire fraud and three counts of money laundering.
The indictment does not name the victim, referring to him only as Individual A.
The U.S. Attorney's office said they would not disclose the victim's name, but the description they provided fits only one player: a defensive lineman who played with the Colts from 2012 to 2014.
The victim played for the National Football League from 2003 to 2016 and lived in Carmel from July 2012 and May 2015, the indictment says. Cleveland served as the victim’s financial advisor for nearly the entire length of the victim’s football career—from 2003 to 2015.
Acting on a referral from one of his college professors, the victim hired Cleveland to help him manage his NFL earnings and plan for his post-football financial life. Over the years, the victim gave Cleveland more than $7 million to invest on his behalf, the indictment says.
Cleveland told the victim that he would put the money into conservative investments, but instead Cleveland spent more than $4.5 million of that money, the indictment says.
Cleveland is alleged to have used $2 million of the victim’s money to pay “fictitious investment returns and principal” to other investor clients; and to return $240,000 of the victim’s own money to him in the form of “fictitious investment returns.”
The indictment also alleges that Cleveland used another $2 million for personal expenses including bill payments and expenses, daily purchases and payments to his mother, sister and daughter.
At the same time, Cleveland is alleged to have given the victim false financial statements and other false assurances that his investments were performing well.
“Cleveland praised Individual A’s decision to invest with him by comparing Individual A’s purported financial security to other NFL players who had reportedly squandered their earnings,” the indictment says. “At no point did Cleveland mention that he had spent the majority of the money that Individual A invested with him.”
The situation unraveled when the victim asked for his money back but Cleveland could not provide it, Minkler’s office said.
The charges against Cleveland carry maximum sentences of 10 to 20 years’ imprisonment, plus a fine of up to $250,000.
If he is found guilty, the indictment also orders Cleveland to forfeit the property or money gained in relation to the offenses.
This is not the first time Cleveland has faced legal action over his financial dealings.
Television producer William S. Bickley, who produced shows including "Happy Days" and "The Love Boat," sued Cleveland in August 2013. Bickley’s suit claimed that Cleveland, whom he had considered a life-long friend, stole at least $6 million from Bickley while serving as his business manager, according to an account in the Hollywood Reporter.
Cleveland's phone in California was disconnected.