A San Diego-based FBI sting operation has nabbed two professional sports agents plotting to fleece their clients in an investment scam. The agents are Joseph Vaccaro of New York City's Dynasty Management and Vincent "Vinnie" Porter of Chicago's PTA Sports Management. They are scheduled to appear in federal court here February 2. The FBI arrested them in October.
The FBI agent who carried out the sting is Marc Pennebaker of the San Diego office. The person who recorded conversations with Vaccaro and Porter is almost certainly San Diego's Bill C. (Billy) Crafton, Jr.
The case against Vaccaro and Porter, which was filed October 2 of 2014, mentions that an unnamed "Confidential Human Source" had earlier admitted to conspiracy to commit wire fraud.
Crafton, also a sports agent, pleaded guilty to charges of conspiracy to commit wire fraud on October 17 of last year in San Diego. He had taken kickbacks on investments he put the athletes in, and concealed those payoffs. (Crafton was sued by former athlete/clients and charged with securities fraud by the Securities and Exchange Commission, in addition to the criminal charge.) One publication that reported on the story, thesmokinggun, also identifies Crafton as the person who recorded the conversations.
In the sting, Pennebaker sometimes posed as an investor named Mark Baker while the Confidential Human Source (almost surely Crafton) taped conversations with Vaccaro and Porter. In one conversation with the source, Vaccaro discussed ways of "ripping off" professional athlete clients.
Vaccaro explained in another conversation, "My big thing is, these guys would all fu*k us in a heartbeat if they could. So if I am going to have a player, I'm going to make as much money as I can because I run the risk of him firing me at any time for no reason."
Porter agreed with the source that the deal they were cooking up to fleece the athletes was a "home run deal" that would only be "a single" for the athletes.
Here is the deal they plotted: the athletes would be told they were buying half of a group of Burger Kings and related real estate for $20 million. Actually, the price would be $16 million. Porter, Vaccaro, and the source would split the remaining $4 million. They agreed that the investors would not be told about that $4 million. The source (almost certainly Crafton) would tell the athletes that he would only take 1 percent as a commission.
Vaccaro, Porter, and the source would actually own the other half of the Burger Kings without making any investment of their own. They would conceal that caper by piling up the names of five or six limited liability companies supposedly owning pieces of their 50 percent stake. Porter said that this piling of limited liability companies would make it appear that other investors owned the other half. The athletes would never know because "they can't dig deep enough," said Porter, according to the government complaint.
Porter, an attorney, instructed the source to lie about who owns that other 50 percent. "You will say no, I do not know the other investors on the other side," Porter told the source, according to the government complaint.
On October 1 of last year, Pennebaker, posing as investor Mark Baker, brought a second FBI undercover agent to a meeting with Vaccaro and Porter. The other undercover agent was pretending to be a wealthy investor interested in the Burger King deal. After Vaccaro and Porter told allegedly false stories about the deal, they were both arrested. According to the smokinggun, the defendants will plead not guilty.