On Wednesday, December 10, the Securities and Exchange Commission charged San Diegan Bill C. (Billy) Crafton Jr., who counseled professional athletes on their finances, with fraudulent misconduct in violating federal securities laws. Importantly, Crafton agreed to plead guilty to criminal conduct, waiving the right to a jury trial and any assertion of double jeopardy. (The securities agency only handles civil matters.) The Reader has covered Crafton's antics in a column and blog items on October 23, 2013, November 14, 2012, and September 15, 2012.
According to the securities commission, from 2006 through at least 2011, Crafton knowingly misrepresented or failed to disclose to his clients the fact that he received more than $1.5 million in payments to recommend investments he put the athletes in. For example, Crafton put his athlete clients in now-defunct entities called the Westmoore Lending Opportunity Fund and Westmoore investment. Crafton received more than $466,000 in undisclosed compensation, including $295,000 in undisclosed brokerage payments, and $170,484 in direct payments. This money was surrpetitiously slipped to Crafton from one of his employees who was actually a broker for Westmoore. The securities agency charged that a string of Anaheim Hills funds, all with the name Westmoore, amounted to a Ponzi-like scheme and corporate shell game that had fleeced investors of $50 million. Crafton and his associates then waged a telephone and e-mail campaign telling the athletes that the agency was wrong — the Westmoore investments were solid. Westmoore collapsed.
Crafton also put the athletes' money with a mortgage broker. His clients didn't know that Crafton was receiving 25 percent of all commissions earned by the broker on transactions of Crafton clients. There were several other similar schemes he pulled on his clients, said the Securities and Exchange Commission.