Two men were convicted for their role in a multi-million investment scheme,
concluding a ten-week trial in federal court. According to court records,
both Phillip A. Kenner and Tommy C. Constantine were convicted on counts
of wire fraud, wire fraud conspiracy, and money laundering for their connection
to a scam that targeted professional hockey players and a variety of other
investors from Long Island.
According to the U.S. Attorney for the Eastern District of New York, both
Kenner and Constantine used various holding companies to divert millions
of money from their customers for their own personal use, placing investor
money in companies, real estate, and more.
The court lists four separate schemes run by Kenner and Constantine:
- Hawaii Real Estate Investment
- Eufora LLC
- Global Settlement Fund
- Sag Harbor
The Hawaii Real Estate Investment scheme was allegedly initiated in 2003
when Kenner coerced several of his clients to invest $100,000 each for
the purpose of land development in Hawaii. Additionally, court documents
claimed that Kenner had his clients open lines of credit, which they secured
through bonds and savings accounts valued at around $10 million. Kenner
assured his clients that any money that was taken from these credit lines
would be reimbursed in full. In reality, claimed the charges, Kenner was
diverting his clients’ money into unrelated projects for his own
personal benefit, as well as for the benefit of his partner, Constantine.
In another scheme, Constantine operated a prepaid debit card business called
Eufora, LLC. In 2008-2009, when the company was at its lowest, Kenner
allegedly began to solicit his customers to invest in Eufora. Kenner and
Constantine were accused of diverting customer money into accounts that
they controlled for their own personal use.
With the Global Settlement Fund scheme, Kenner’s clients who had
previously invested in the Hawaii land development received notices that
their lines of credit were in default. Until this point, charges alleged
that Kenner had not disclosed to his clients that most of their savings
was gone. Global Settlement Fund was allegedly a way for Kenner and Constantine
to get out of the sticky situation they had created with the Hawaii venture.
Kenner and Constantine raised $2.9 million from this scheme.
Finally, the charges detailed a scheme concerning property in Sag Harbor,
New York. According to the allegations, Kenner took money from a client
without his knowledge or consent, and convinced another customer to contribute
$375k, thereby obtaining a 25% interest in the Sag Harbor property without
putting any of his own money in. When his customers realized what happened,
they sold the Sag Harbor property for less than they invested.
For more details about this case,
read the FBI’s press release.