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Thursday, November 14, 2013

Two arrested in $15 million scheme cheating NHL players and Long Island investors-Newsday

11/13/13, "Pair nabbed in scheme to cheat NHL players, LI investors," Newsday, Ellen Yan

"A financial adviser and a former race car driver were arrested Wednesday after using NHL players and Long Island investors as their "personal piggy bank" in a $15 million fraud scheme stretching from Sag Harbor to Mexico, authorities said.

Phillip A. Kenner, 43, who advised several past and current NHL players, and Tommy C. Constantine, 47, who owned a race car team, were caught in their hometown of Scottsdale, Ariz., and were to be arraigned later in New York, said the U.S. attorney's office on Long Island, the FBI and the IRS.

A 10-count indictment charges them with wire fraud as well as wire fraud and money laundering conspiracies in alleged real estate and business scams during the past 11 years. "Kenner used his school connections to build a client list of NHL players," U.S. Attorney Loretta E. Lynch said.

A person briefed on the case said several Long Island cops also were caught up in the scam.

The investors thought their funds were being used to buy properties in Sag Harbor, Hawaii and Mexico and support businesses that were later found to be shams, the indictment stated. They asked in some cases for $100,000 per investor, and "surreptitiously" transferred funds from victims' lines of credit into their own bank accounts, authorities said.

For example, Kenner paid about $750,000 for a Sag Harbor property in October 2006 after secretly transferring $395,000 from a former NHL player's line of credit and getting $375,000 from another former player by falsely promising 50 percent ownership, court papers said.

The pair allegedly used the funds to pay mortgages, travel, jewelry, credit cards and other personal use. Authorities seek a judgment of at least $30 million and forfeiture of properties, including a 1976 Falcon 10 twin-engine jet.

George Venizelos, of FBI's New York office, said victims' savings were like a "personal piggy bank" to the pair, who "stole from anyone they could find."

The attorney for Constantine, also called Tommy C. Hormovitis, said his client fell out with Kenner over a high-end golf project in Mexico and was not part of a fraud. "We're shocked that Tommy Constantine has been indicted," said Edward Little of Manhattan. "There are some investors who will vouch for Tommy." It was not clear whether Kenner had an attorney."

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