How some of the NFL's biggest stars got taken for millions
In Irvine, Calif., Luigi DiFonzo lured football players and others into his investment firm, DFJ Italia, claiming that he was an Italian count. In fact, he was a two-time felon. At an NFL Hall of Fame dinner in Canton, Ohio, in 1999, a company official bragged that DFJ was "the first choice [of] professional athletes for banking and investments." Several former players, including Dickerson, invested and lost money in DFJ, which collapsed under a mountain of debt in March 2000. "He targeted the NFL players as potential investors," says FBI agent Evan Rae, "and in the end, it was a scam." DiFonzo committed suicide in August 2000.
In some cases, former players use their friendships to bilk their old teammates. Former tight end Terry Orr was sentenced to 14 months in prison last August for defrauding a Georgia businessman and three former Washington Redskin teammates, including Art Monk, one of the greatest wide receivers in NFL history. Each of the players invested $50,000 in Orr's failed shoe company. Prosecutors say Orr diverted most of the money to pay personal debts.
Given its huge salaries and signing bonuses, the NFL is fertile ground for financial flimflams. Next year, 1,800 players will share in $2.5 billion in salaries and bonuses, never mind the millions more that some will make in endorsements. "We tell these young men they are walking around with bull's-eyes on their chests," says Lawrence Sweeney, the chief investigator for NFL security.
Increasingly often, con artists are hitting their mark. In the past three years alone, according to the National Football League Players Association, at least 78 players have been defrauded of $42 million. Gene Upshaw, the no-nonsense executive director of the union and a Hall of Fame lineman, says that's just "the tip of the iceberg." In an interview, he added, "There are many cases out there where players are too embarrassed to report the fraud."
Tired of the scams, Upshaw and player representatives brought in a former federal prosecutor, Kenneth Ballen, to devise a program for regulating financial advisers. That program is being launched this week, spurred largely by the sensational case of William "Tank" Black, convicted in a Gainesville, Fla., courtroom last week of defrauding 12 current and former NFL players and others. Under the new program, the players union will conduct background checks on advisers, looking for criminal records or other problems. The union will also require advisers who register in the program to be licensed and qualified by state and federal regulatory agencies (Page 36).
Some players are victims of their own greed or the implausible schemes of others. Brian Simmons of the Cincinnati Bengals lost $100,000 he invested with Linda Frykholm, a former Illinois schoolteacher. She promised some 200 investors a 300 percent return, within seven days, on a scam she called the United Nation Trade Honduras Project. In all, she raised nearly $15 million but used that money to finance a lavish lifestyle. She took trips to Switzerland, paid for private schools for two children, and bought two $2 million lakefront homes in Wisconsin. Last year, she began serving a 12-year prison term for fraud.