Brother Beware

Eagerly playing the race card, a few unscrupulous black financial advisers are hurting athlete-clients and legit minority businesses
April 02, 2006

Until just a fewmonths ago it seemed like the ultimate win-win situation. Over the last severalyears a group of seven current and retired NFL players had met with an Atlantahedge fund manager named Kirk S. Wright. The players had money to invest andWright's International Management Associates had what sounded like interestingopportunities. According to Ray Crockett, one of the players involved, Wrightshowed them financial reports indicating that the little-known IMA had producedan astounding average annual return of more than 27% over seven years. He alsowooed the players at a lavish wedding at his impressive home in the Atlantasuburbs.

Starting in 2004,according to court documents, the players invested a combined total of $15million in IMA--but the deal soured quickly. Concerned about Wright's secrecyand strategies, the players asked for their money back, only to be stalled orgiven bad checks. In February, Wright, 35, went missing--as did almost all themoney (SEC documents estimate the total at $115 million to $185 million) he hadmanaged for about 500 investors. Later that month the players and the SEC filedseparate suits against Wright and IMA, accusing them of fraud. Says ErnestGreer, a lawyer for the athletes, "We're looking for the money."(Wright's attorney, Jacob Frenkel, did not return SI's phone calls.)

The playersinvolved are hardly naive jocks in the first blush of financial success.Crockett and his former Broncos defensive backfield mate, Steve Atwater,together manage commercial real estate holdings. With Atwater and Rod Smith,the veteran Broncos wideout, Crockett also owns a thriving real estatedevelopment company in Southern California. And Crockett owns seven hair salonsin Dallas and has stakes in Hooters restaurants there and in Houston and SanAntonio.

The players havesomething else in common: They are black. And Crockett now believes thatWright, who is also black, exploited that to get their trust and ultimatelytheir money. "Race was a big part of IMA's image," says Crockett."Kirk would say his company had to be aboveboard because as a successfulblack company, people were watching them." Ivan Thornton, a black New Yorkinvestment adviser for pro athletes and entertainers, says, "That [Wright]was a black man who showed outstanding potential had everything to do with hisillusion of success."

The irate IMAinvestors aren't the only athletes to get burned by advisers who stress racialsolidarity in the way Don King did when he cozied up to Mike Tyson. InNovember, Calvin Darden Jr., a 31-year-old stockbroker who had bilked formerNBA star Latrell Sprewell out of $300,000, among other crimes, was sentenced tofour to 12 years for grand larceny and scheming to defraud. In 2002 formeragent William (Tank) Black received a five-year sentence for fraud afterswindling NFL players Fred Taylor and Ike Hilliard and others out of more than$11 million. Sometimes the adviser's incompetence, rather than criminal intent,is the client's undoing. In 1999, hip-hop magnate Master P's No Limit SportsAgency negotiated an eight-year deal for Ricky Williams laden with incentivesso difficult to reach that other teams actually called the Saints tocongratulate them on getting the running back so cheaply.

Thornton saysthat sometimes when players are getting to know potential advisers, blingtrumps substance. One prospective client decided not to hire Thornton after helearned the consultant drove a Nissan Sentra. "A man is a reflection ofwhat he drives," the celebrity said. (Wright reportedly had a Bentley, aJaguar, an Aston Martin and a Lamborghini.)

But this brand ofblack-on-black crime has victims beyond the ripped-off athletes. The IMA caseand others have made life even more difficult for honest black investmentadvisers and agents struggling for a foothold in the billion-dollar business ofservicing pro athletes. "This hurts the black firms trying to do the rightthing, especially when there aren't that many of us to choose from," saysThornton, who has black and white clients. "These events leave theimpression that a lot of us aren't using good business practices."

Felix Wright (norelation to Kirk), a former Browns safety who now heads Sports Trust, afinancial-services company for athletes, believes the athletes involved deservesome of the blame. "Players have to give their finances the same dedicationand attention as they gave their careers on the field," says Wright.

But spotting thebad apples isn't easy. Crockett says he did research on IMA before investingmore than $1 million, and "everything checked out." Kirk Wright had astamp of approval from the NFL Players Association, as a member of itsFinancial Advisors Program, which claims to protect players from fraud.Curiously the program doesn't monitor the financial activities of members orwarn players about the shortcomings of any adviser; it merely requires membersto have a college degree and be properly licensed and insured. "Are theyreally protecting our interests?" asks Crockett.

Ultimately, aplayer's choice of adviser will come down to how he feels about the sales pitchand the person making it. And Felix Wright believes that if that pitch straystoo far from business, the player should beware. "If you have to play therace card," Wright says, "your presentation is weak."

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ILLUSTRATIONILLUSTRATION BY JOHN CUNEO

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