65°F
weather icon Mostly Cloudy

Las Vegas-based sports betting funds run by ex-felon eyed by SEC

Updated May 4, 2019 - 11:27 pm

One investor, a retired engineer from Texas, thought of traveling more with his grandchildren as his $50,000 investment in Vegas Basketball Club climbed to more than $700,000 in 15 months.

A New York-based doctor considered cutting his work hours as his $125,000 investment in Einstein Sports Advisory morphed into $900,000 in under two years.

They are among dozens of people across the U.S. who combined have invested more than $1 million in six sports betting funds all run by a Las Vegas resident who claims to have the secret sauce to crushing local books. They also are among a handful of investors who claim they have been unable to collect their winnings or recoup their initial investment from the funds’ manager.

Known to his investors by various names including John Frank, John Marshall and Jonathan West, the 74-year-old sports bettor is actually John F. Thomas III, a felon who served about 10 years for running a Ponzi scheme in the late 1980s, a Review-Journal investigation has discovered. He appears to have been born John F. Rodgers and then changed his name to Thomas in the 1980s.

A person named Thomas J. Becker was jailed with Thomas for selling copy machines that didn’t exist to financial institutions. Nevada secretary of state documents and bank statements show that a Thomas J. Becker is assisting Thomas with the sports betting funds. Now, funds connected to Thomas or Becker or both — Einstein Sports Advisory, Quantum Sports Advisory, Wellington Sports Club, Vegas Basketball Club, Vegas Football Club and Sports Psychometrics — have come under the scrutiny of the U.S. Securities and Exchange Commission.

At least one SEC investigator in its Los Angeles office, Matthew Montgomery, has communicated with investors of Thomas’ group of funds, said David Shapiro, a California-based lawyer for an investor.

Montgomery declined to comment when contacted by the Review-Journal.

Another disgruntled investor on the East Coast, who asked that his name not be used, said he called Montgomery and spoke at length with him regarding Thomas. Montgomery followed up by sending the investor a form regarding procedures for giving testimony to the SEC, the investor said.

Meanwhile, the Nevada attorney general has received at least two complaints about the Einstein fund from investors, but the office declined to say whether it is investigating Thomas and his funds, according to documents seen by the Review-Journal. Monica Moazez, a spokeswoman for the attorney general’s office, declined to provide additional information.

Michael Lawton, a spokesman for the Nevada Gaming Control Board, which oversees sports betting regulation, said it is “familiar with a couple of the funds” but is “not aware they took any investments from Nevada clients. That being said, they were not operating illegally in Nevada.” Lawton declined to say if the agency is investigating.

Thomas did not respond to multiple requests for comment, and Becker could not be reached. Both men are being represented by Crane Pomerantz of Sklar Williams law firm.

“As with every dispute, there are two sides to the story. At the appropriate juncture, my clients look forward to providing their perspective. It would be premature to provide any additional statements right now,” Pomerantz said in a statement to the Review-Journal.

Claims of success

For at least six years, Thomas has been raising tens of thousands of dollars from professionals and retirees in New York, Texas, California, Florida, Chicago and Ohio by convincing them he has a proprietary handicapping system “that is very accurate in predicting the outcome” of games, according to investor contracts provided to the Review-Journal.

His websites, which require login credentials, say he has consistently won big over the years. His Wellington Sports Club website says he has generated greater than 600 percent compounded gross profit for each of the past two fiscal years.

Thomas advertised that he invested his clients’ money by betting on heavily favored teams using round robin wagers, which are bets consisting of multiple parlays. A parlay is a single wager on two or more teams; parlays only pay if all the single bets win, which makes them among the riskiest wagers.

Nevada casinos’ win percentage on parlays has averaged 28 percent over the past decade compared with about 5 percent for single bets, according to Nevada Gaming Control Board data.

Thomas finds clients with the help of “investment advisers” recruited through ads on Craigslist. Five investment advisers contacted by the Review-Journal were not listed as registered investment advisers with the Financial Industry Regulatory Authority website brokercheck.finra.org.

Now, about 10 investors have told the Review-Journal they have been struggling for months or even years to get their supposed winnings and in many cases their principal as well. The investors are all part of groups of four to 13 that invested with the funds.

The investors spoke on the condition of anonymity because they are embarrassed to have possibly fallen for what they said they think might be a scam. Aside from doctors and engineers, Thomas’ investors include Silicon Valley and financial investment professionals and business owners.

In emails obtained by the Review-Journal, Thomas told several clients that he is so successful at winning — better even than famed stock investor Warren Buffet — that he can’t possibly send so much money through banks without raising money laundering concerns. He also said that banks have shut down his accounts, thus making it difficult for him to send money.

Thomas is now telling his clients — who are clamoring for their winnings — that he will be able to pay them as soon as online betting accounts are available with the passage of a “national sports betting bill,” according to emails he sent to clients and that were obtained by the Review-Journal.

“We grow money a million times faster than Warren Buffett … actually we grow it a quadrillion times faster. Just can’t move it into the banks that fast. Online sports betting solves the bank cash flow problem,” he said in a November email to a disgruntled Florida client. He invested $25,000 with two friends and said he hasn’t received a penny back.

But a national sports betting bill is highly unlikely to pass Congress anytime soon while only six states will probably have mobile betting by the end of the year, said Brian Bussmann, a partner at Global Market Advisors.

In any case, regulation that allows people to move money between online sports betting accounts would take “quite some time — and possibly a change in federal law” before it could become a reality, said Chris Grove, a managing director at Eilers &Krejcik Gaming.

Past complaints

Sports betting funds were prohibited in Nevada before the passage of Senate Bill 443 in 2015, said Tony Cabot, a professor at UNLV and a former gaming attorney.

But Sports Psychometrics and Vegas Football Club were operating before the 2015 bill was passed, according to court records and Nevada secretary of state data.

In 2015, Arizona resident Marc Desabrais sued Thomas and his Vegas Football Club in Nevada District Court for breach of contract, accusing the latter of failing to pay him anything. In a motion to dismiss, Thomas denied the allegations.

Desabrais invested $50,000 in the fund in August 2014, and the sum rose to slightly more than $2 million by April 2015, according to documents in the court file.

But Desabrais told the court that he hadn’t received any money as of June 2016 and said Thomas stopped communicating with him.

Thomas told the court that the employee placing the bets at Las Vegas casinos drowned during a short trip to Nicaragua in May 2015 and winning tickets worth millions of dollars were lost.

The case was settled out of court. Desabrais declined to comment when contacted by the Review-Journal.

In 2017, Oregon issued a cease-and-desist order against Wellington Sports Club and Becker, whose name is on the Nevada secretary of state registration documents, for promoting the fund in the state. Oregon said that the fund was not a registered security and Becker was not a registered salesman. It fined him $35,000.

Oregon sent copies of its findings to the Nevada Gaming Control Board in May 2018 and to the Nevada secretary of state’s office in June, according to Brad Hilliard, a spokesman for the Oregon Division of Financial Regulation.

In August, Minnesota authorities contacted the Nevada secretary of state’s office seeking information about Quantum Sports Advisory after an anonymous complaint about the fund, according to Ross Corson, a spokesman for the Minnesota Department of Commerce. Minnesota could not find proof the investment was being sold to state residents. The Review-Journal was contacted by an investor from Minnesota in April who claimed to be struggling to get back more than $100,000 in principal.

It is unclear when Nevada regulators first learned of Thomas and his funds. The Nevada secretary of state’s offcie declined to comment.

Keeping the faith

At least two investors in Vegas Basketball Club remain hopeful of getting their money from Thomas. In an email exchange with another investor — the retired engineer from Texas — one said Thomas reportedly “was starting a new baseball secured betting program in April called Progressive Betting.”

“He is very confident that he will be making millions by May and will be able to pay us all off entirely around that time,” the investor wrote. “I told him that most of us still have faith in him that he would pay us but we can’t control everyone.”

Contact Todd Prince at 702-383-0386 or tprince@reviewjournal.com. Follow @toddprincetv on Twitter.

Don't miss the big stories. Like us on Facebook.
Sports Betting Spotlight Videos
Business Videos
How much do Las Vegas casino CEOs make?
Las Vegas gaming CEOs made anywhere between $1 million and $24 million last year, according to company filings with the U.S. Securities and Exchange Commission. ((Las Vegas Review-Journal)
30-year-old Rio needs a little TLC
Nearly 30 years after the Rio opened, the red and blue jewel that helped catapult Las Vegas to a new level with its buffet and nightclub has lost its status along with its shine.
The latest on the Drew Las Vegas - VIDEO
Eli Segall recounts his tour of the Drew Las Vegas, formerly the Fontainebleau, on the Las Vegas Strip. (Michael Quine/Las Vegas Review-Journal)
Pinball Hall of Fame to move near south Strip
Operators of the Pinball Hall of Fame have been approved to build a new, larger arcade near the south edge of the Strip on Las Vegas Boulevard near Russel Road. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
National Hardware Show underway Las Vegas
The National Hardware Show kicked off Tuesday at the Las Vegas Convention Center (Mat Luschek / Review-Journal)
Caesars for sale?
Caesars Entertainment Corp. has been swept up in takeover speculation since the company’s share price tumbled last year amid disappointing earnings and concerns over a recession. Amid the decline, hedge funds scooped up shares. Billionaire activist investor Carl Icahn began buying shares of Caesars as early as January. Icahn acquired nearly 18 percent by mid-March. In February Icahn called on the Caesars board to study a sale as a way to boost shareholder value.
Las Vegas home prices
Las Vegas home prices grew fastest among major markets in February for the ninth straight month. But amid affordability concerns, the growth rate has slowed down. Southern Nevada prices in February were up 9.7% from a year earlier, according to the latest S&P CoreLogic Case-Shiller index. The last time Las Vegas' price growth fell below 10% was in September 2017, S&P Dow Jones Indices reported.
Free Parking Coming To Wynn
Free parking will come to the Wynn and Encore resorts on May 1, 2019. (Mat Luschek / Review-Journal)
Founding Venetian employees talk about 20 years at the Strip resort
The Venetian, which opened May 3, 1999, is celebrating 20 years on the Las Vegas Strip. Seven original employees talk about opening the luxury resort and working there for two decades. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Circa aiming for December 2020 opening
The 1.25-million-square-foot property will have 44-stories and 777-rooms. It will also have a separate nine-story, 1,201-space parking garage.
Boxabl official explains the building concept
Boxabl business development manager Galiano Tiramani shows off a room built by his company. (Blake Apgar/Las Vegas Review-Journal)
TI/Mirage Tram reopens
The tram that shuttles guests between TI and Mirage reopened this week after being closed for much of 2018.
Las Vegas Convention Center expansion taking shape
Renderings and actual footage show how the Las Vegas Convention Center is evolving.
Former Starbucks CEO Howard Schultz at Las Vegas convention
Former Starbucks CEO and potential presidential candidate Howard Schultz spoke at the Epicor Insights user conference at Mandalay Bay Convention Center Wednesday, April 17, 2019. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Drew Las Vegas to open in the second quarter of 2022
The 67-story Drew Las Vegas is slated to open in the second quarter of 2022 at the north end of the Las Vegas Strip. (Michael Quine/Las Vegas Review-Journal)
NAB Day 1 (Time Lapse)
NAB kicked off at the Las Vegas Convention Center on Monday, April 8, 2019. (Mat Luschek / Review-Journal)
National Association of Broadcasters Show shows 1mm thick 8K TV with 22.2 channel digital sound
Japan’s NHK Science & Technology Research Laboratories booth featured a 1mm thick 8K TV system used in conjunction with a 22.2 channel digital sound system at the National Association of Broadcasters Show at the Las Vegas Convention Center. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Nevada shoppers react to Smith’s no longer accepting Visa credit cards
On March 1, Smith’s announced that it would no longer be accepting Visa credit cards at any of its 142 supermarkets, including the 45 in Nevada.
Massachusetts Gaming Commission asks how long Wynn executives knew about misconduct
Business reporter Rick Velotta gives an update on the adjudicatory hearing on the suitability of Wynn Resorts to retain its gaming license in Massachusetts.
Henderson app developer part of Startup in Residence
Henderson based developers of the app On Point Barricade are taking part in Startup in Residence, a North America program dedicated to pairing tech companies with governments. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Sam's Town employees and customers talk of their love for the iconic casino
Longtime Sam's Town employees and customers love each other and love their casino. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Las Vegas apartments rents
Las Vegas’ apartment market has accelerated in recent years. Developers are packing the suburbs with projects, landlords are on a buying spree, and tenants have filled buildings.
William Boyd talks about the birth of Sam's Town
On the eve of the 40th anniversary of Sam's Town, William Boyd, executive chairman of Boyd Gaming and son of hotel namesake Sam Boyd, talks about how the casino became one of the first local properties in Las Vegas. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
High Roller observation wheel turns five
The world’s tallest observation wheel celebrates it’s fifth year on Sunday, March 31, 2019. (Michael Quine/Las Vegas Review-Journal) @Vegas88s
Escape Room Industry Growing In Las Vegas
Escapology employees discuss the growing escape room industry in the U.S. and Las Vegas. (Bailey Schulz/Las Vegas Review-Journal)
Impact of parking fees on visiting the Las Vegas Strip
There are no data showing a relationship between Strip resort and parking fees and the number of out-of-state visitors to Las Vegas. But there are data showing a relationship between Strip parking fees and the number of local visitors to the the Strip. ‘’As a local, I find myself picking hotels I visit for dinner or entertainment, based on whether they charge for parking or not,”’ said David Perisset, the owner of Exotics Racing. ‘’It is not a matter of money, more of principle.’’ A 2018 survey by the Las Vegas Global Economic Alliance found 36.9 percent of Clark County residents reported avoiding parking at Strip casinos that charge for parking. 29.1 percent reported avoiding using any services from a Strip casino that charges for parking.
MGM's sports betting deals
MGM Resorts International signed a sports betting sponsorship agreement with the NBA in July It was the first professional sports league to have official ties with a legal sports betting house. The deal came just two months after the U.S. Supreme Court overturned a law prohibiting sports betting in most states. In October, MGM became the first gaming company to sign a sports betting partnership with the NHL. In November, MGM became the first gaming company to sign a sports betting partnership with the MLB. Financial terms of Tuesday’s deal and earlier partnerships have not been announced.
Faraday puts Las Vegas land on the market
Nearly two years after Faraday Future bailed on its North Las Vegas auto factory, the company has put its land up for sale. (Michael Quine/Las Vegas Review-Journal)
El Cortez owner Kenny Epstein on running the iconic property
Kenny Epstein, owner of the El Cortez Hotel in downtown Las Vegas, talks about Jackie Gaughan mentorship and answers rumors about bodies in the basement at the mob-era casino. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
LVCVA recommends construction of underground people mover
The Las Vegas Convention and Visitors Authority announced the recommendation for an underground people mover for the convention center. The system would have the potential to expand and connect Downtown and the resort corridor all the way to McCarran. (Michael Quine/ Las Vegas Review-Journal)
THE LATEST
Lucky Dragon’s foreign investors demand refund

The Lucky Dragon’s developers and prior management are facing lawsuits from Chinese investors, the project’s main lender and a Canadian high-roller who paid a $400,000 deposit to lease the casino just one month before it abruptly closed.

Trump removes tariffs on Mexico, Canada, delays auto tariffs

President Donald Trump took steps Friday to ease tensions with America’s allies — lifting import taxes on Canadian and Mexican steel and aluminum and delaying auto tariffs that would have hurt Japan and Europe.

Boeing finishes software update for grounded 737 Max jet

Boeing says it has finished updates to the flight-control software implicated in two deadly crashes involving its 737 Max, moving a step closer to getting the plane back in the sky.