Financial advisor Kenneth Ray Cleveland, 64, of Agoura Hills, California, has been sentenced to seven years in prison for fraud and money laundering charges related to an investment fraud scheme connected to former NFL player Cory Redding.
Advisor Swindles Client of Investments
Cleveland acted as Redding’s financial advisor for more than a decade. The two met shortly after Redding entered the NFL after college, by an introduction from one of Redding’s college professors. Redding was looking for a financial professional to advise him on the proper investment of his money and to save for his retirement from football.
Cleveland sold Redding on a “fixed income” investment strategy that appeared to align with Redding’s goals: putting his money in conservative investments and living off the interest while using the principal for retirement. Over the next decade, Redding, a former NFL player who played several years for the Indianapolis Colts, invested millions with Cleveland.
Though Cleveland assured Redding of the success of his investments, Cleveland was, in fact, using Redding’s money for his own personal expenses. Beginning in 2007, Cleveland stole over $4.5 million from Redding.
According to the indictment, Cleveland used over $2 million on personal expenses including mortgages, credit card payments, payroll, business and personal expenses, and payments to his family. He also spent over $2 million more as part of a Ponzi scheme to pay fictitious investment returns to his other clients.
To conceal the scheme, Cleveland provided Redding with financial statements that described how much money Redding had and how much he was making from his investments. In phone calls, text messages, and in-person meetings, Cleveland kept up the scam, telling Redding that he had made smart investments. Cleveland also made money available to Redding when he needed it and periodically paid Redding “interest” – unbeknownst to the football player, the interest payments were actually paid with his own money.
At the end of 2014, when Redding was ready to retire from the NFL and began asking for his money back, he discovered that Cleveland was under investigation in California for a fraud scheme. Shortly after, Redding began to uncover Cleveland’s scam when Cleveland refused to return the money, learning that the money Redding had invested had all been spent.
Cleveland Asked to Pay Full Restitution
Cleveland’s sentencing in federal court follows his guilty plea to previously filed charges. He was charged with seven counts of wire fraud and three counts of money laundering. He has also been ordered to pay full restitution of $4,706,066.86.
Have You Lost Money Investing with Kenneth Ray Cleveland?
If you lost money investing with Kenneth Ray Cleveland or think you may be a victim of your financial advisor, contact an experienced investment fraud attorney today.
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