A North Carolina businessman who advised professional athletes on investments has pleaded guilty to wire fraud and filing a false 2011 income tax return.
According to the Department of Justice, Michael Rowan, a resident of High Point, North Carolina, operated Capital Management Wealth Advisors Inc. (CMG) and APS Management LLC (APS), along with a business partner. Through his companies, CMG and APS, Rowan provided financial and investment services to professional athletes, including players in the National Football League (NFL). From May 2008 through August 2014, Rowan converted and misappropriated approximately $2.9 million from his clients’ bank accounts. For 2009 through 2013, Rowan failed to report the misappropriated funds on his federal income tax returns.
According to documents filed with the court, Rowan, together with his business partner identified only as “J.J.”, reached out to prospective NFL Players in college regarding services, including bill payment, investment services, and financial guidance. Rowan was previously linked to a scandal involving college players and violations of National Collegiate Athletic Association (NCAA) rules, though he has denied wrongdoing (you can read more about the Yahoo Sports investigation here).
Once a player had been drafted by the NFL, Rowan would enter into an agreement with the player to provide financial services for an annual fee of between $15,000 and $50,000. According to court documents, Rowan steered his clients towards certain banks and then requested that his clients give him access to their bank accounts. Rowan represented to his clients that he would only make transactions that were authorized by them and for their benefit, such as paying their bills. However, Rowan used his access to his clients’ bank accounts to transfer over $2.9 million for his own personal benefit and without his clients’ authorization or knowledge.
Eventually, Rowan was found out. In addition to criminal charges, he was named as a defendant in a case filed by San Diego Chargers wide receiver Craig “Buster” Davis who claimed that he paid $500,000 for an interest in a private hangar project and received nothing in return; that case was settled for an undisclosed amount in 2011.
Currently, Rowan’s company, Capital Management Wealth Advisors Inc. is marked “suspended” on the North Carolina Department of State website. CMG had its Certificate of Authority previously revoked in 2010 for failure to file an annual report. Rowan’s other company, APS Management, was administratively dissolved in 2016.
As part of the plea agreement, Rowan has agreed to pay restitution to the Internal Revenue Service (IRS) in the amount of $479,352.00.
Rowan’s sentencing is scheduled for January 31, 2017. He faces a statutory maximum sentence of 20 years in prison and a fine of up to $250,000 for the wire fraud count and three years in prison and a fine of up to $100,000 for the false tax return count, as well as a period of supervised release and monetary penalties.
And while this scheme specifically targeted NFL players, that doesn’t mean that those of us with less glamorous jobs aren’t at risk. Laurence Landsman, a securities litigation attorney at Block & Landsman in Chicago, Illinois, with experience in trial work involving fraud and professional athletes, notes, “While professional athletes are particular targets of this type of fraud, the unfortunate reality is that anyone can be the victim of these types of schemes, to devastating effect.”
You can find ways to protect yourself from tax and identity theft fraud here.
