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.