A group of investors in a string of Nevada-based sports betting funds is worried their chances of recovering their money may have gone up in flames.
The $1.2 million-Henderson home of former felon John Thomas burned to the ground last month in a blaze that the Henderson Fire Department said was caused by an electrical malfunction. There were no injuries.
From that home, Thomas operated his betting business, which he claimed was generating millions of dollars in profit for clients. However, client emails viewed by the Review-Journal indicate at least a dozen claimed they were not paid.
Now some of them worry what the fire will mean to their chances of recovering their winnings, their lawyer said.
“They know what has happened in the past,” said Las Vegas attorney Matthew Callister, referencing a 2015 lawsuit against Thomas by a client who claimed he was owed $1 million, including principal and profit.
Thomas told a Nevada District Court he couldn’t pay the client because sports betting tickets worth millions of dollars were lost when an employee drowned during a short trip to Nicaragua earlier that year.
Thomas did not answer his phone or respond to emails. His lawyer, Crane Pomerantz, declined to comment.
Callister, who has been speaking with “more than a dozen” investors, said he sent a letter to Thomas shortly before the fire demanding he pay them their winnings, as stated in their contracts.
“We received no response whatsoever,” Callister said.
After the June 13 fire, Callister said he doesn’t know where Thomas is now living.
Thomas lived in a remote area of Henderson that was not connected to city water sources. The house was ringed by a tall gate and trees that featured signs warning people of dangerous dogs and cameras.
“The fire investigator determined the fire was accidental due to an electrical malfunction,” Henderson spokeswoman Kathleen Richards said June 24.
Joel McGinnis, the senior fire investigator for the City of Henderson, did not return a call for comment.
The fire comes after a Review-Journal investigation into his criminal background. The Securities and Exchange Commission was probing Thomas’ sports betting funds as of early May. The SEC declined to comment for this story.
Thomas has raised at least $1 million from dozens of investors around the U.S., Canada and Russia for at least six sports betting funds since 2010.
He told investors he could triple or quadruple their money in as little as a year through his sports betting prowess, comparing himself to stock investor Warren Buffett.
At least 10 investors who spoke with the Review-Journal said Thomas would send out regular updates showing their accounts steadily rising in value and reaching their target amounts in just a few months.
However, when the investors requested Thomas pay them their winnings, they said he would give them excuses for why he could not send them money.
Several of the investors shared emails with the Review-Journal that show Thomas blaming the delays on difficulties sending large amounts of money through banks.
Known to his investors by various names including John Frank, John Marshall and Jonathan West, the 74-year-old Thomas served about 10 years in prison for running a Ponzi scheme in the late 1980s, a Review-Journal investigation discovered. The investors said they did not know about Thomas’ criminal background.
Thomas told many of his disgruntled investors in a letter dated June 13 — the day of the fire — that “bank cash flow” was “rapidly growing” and that he anticipated “everyone will be paid by the end of summer.”
Teri Ede, the “investment advisor” who emailed the letter to clients, hung up when the Review-Journal contacted her by phone.
Despite a blaze that wiped out his home office, Thomas had resumed posting his sports betting activity for clients as of June 30.