Becker, Thomas, Culprits in Alleged $30 Million Sports Betting Fraud, Allowed $5,000 in Monthly Living Expenses

Posted on: June 16, 2020, 01:25h. 

Last updated on: June 16, 2020, 04:57h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

A US District Court judge in Nevada will allow John F. Thomas and Thomas Becker ⁠— the two Henderson men behind an allegedly fraudulent $29.5 million sports wagering mutual fund ⁠— to draw $5,000 apiece per month in living expenses.

Becker, Thomas Alleged Fraud Case
Two men accused by the SEC of orchestrating a fraudulent sports betting fund worth almost $30 million will be allowed $5,000 to cover monthly living expenses. (Image: Associated Press)

Judge Andrew Gordon made the ruling last week but denied an injunction request by the defendants seeking to lift a freeze on their personal assets. Gordon made the ruling because the Securities and Exchange Commission (SEC) previously proved the men moved money through a shell company known as No More Bad Hires Inc. (NMBH).

The SEC objects both substantively and because Thomas and Becker failed to confer with it prior to filing the application. But it stipulates to a $5,000 allowance per month per defendant,” according to a copy of Gordon’s ruling obtained by Casino.org.

The commission believes that if the defendants are allowed unfettered access to the ill-gotten gains, the money will be spent and victims won’t be compensated.

Promises and Ponzi

The SEC alleges that Becker and Thomas bilked hundreds of investors from 40 states out of $29.5 million using an elaborate network of shell companies, including Einstein Sports Advisory LLC, QSA LLC, Vegas Basketball Club LLC, Vegas Football Club LLC, Wellington Sports Club LLC, and Welscorp Inc.

The duo promised shareholders exponential returns on invested capital, claiming they could grow cash far more rapidly than famed venture capitalist Warren Buffett. Their purported betting system revolved around betting parlays, which are valid avenues for a quick return on investment. But those wagers come with long odds and are typically eschewed by professional sports bettors.

In reality, just 15 percent of the money Becker and Thomas duped out of investors was allocated to investors, with the remaining 85 percent directed to financing their lifestyles, payments to brokers, and Ponzi distributions, according to the SEC.

Creditors Not Happy

Creditors, or in this case, victims, moved to block the defendants from accessing frozen funds for the purposes of living expenses, a moved supported by Gordon.

“Finally, several of the defendants’ creditors move to intervene to object to the use of the frozen funds to support the defendants’ living expenses and legal fees. I grant their motion to intervene on a limited basis,” wrote the judge.

Gordon added that Becker and Thomas could have previously raised the argument to withdraw cash from the NMBH bank account. But the defendants opted to challenge the SEC on the grounds of their actions not being subject to federal securities laws.

A court could be compelled to reconsider the ruling on the preliminary injunction. But the defendants would need to bring new evidence to support their claims that the SEC’s injunction should be lifted.

Becker and Thomas argued that they should be allowed access to the money because the SEC cannot prove the defendants would dissipate the assets. Several cases heard in the Ninth Circuit Court put that burden on prosecutors. But in this case, the SEC says there’s proof that the swindlers “misappropriated” $13.9 million in investors capital, including more than $1 million on retail spending and travel.