Have Yankees Damon and Nady Struck Out as Stanford Investors? Major Leaguers Among Those With Frozen Assets

New York Yankees outfielders Johnny Damon and Xavier Nady are among those whose bank accounts and other financial assets have been frozen amid the continuing investigation into the dealings of tycoon banker R. Allen Stanford.

Damon, 35, is set to earn $13 million this season, while Nady, 30, will earn $6.55 million. However, because of their involvement in funds linked to Stanford International Bank, the institution at the center of an alleged $8 billion investment scam, neither player can pick up a dinner tab.

The Securities and Exchange Commission has frozen the assets of three of Stanford’s holdings — Stanford International Bank, Stanford Group Co., and Stanford Capital Management – as they conduct an investigation of the companies.

Stanford is accused of peddling certificates of deposit and promising high-interest rate returns which the SEC says were false and supported by falsified data.

Damon and Nady, who share the same agent, Scott Boras, and financial management firm, Personal Management Consultants, said everything from their checking accounts to their credit cards stopped working on February 17, 2009, a day after the SEC froze Stanford’s assets. The players said they have been told that they are not in danger of losing their money and that in all likelihood access to their funds will be restored within days.

How Far Did Stanford Reach?

It appears, however, that neither player put his money directly into Stanford-controlled investments, but rather affiliated programs, which raises serious questions about how widespread the alleged financial fraud may have been. Officials have said that Stanford’s banking and investment empire had assets estimated at about $52 billion, so there are potentially millions of victims, many of whom have no idea their funds were under Stanford’s control.

Damon said he had been told that his investments were insured by the Bank of New York, not Stanford’s Antigua-based institution.

PMC does not make actual investments, but does steer clients, including major-league players, to suitable investment opportunities, officials said. It appears that PMC directed money from Damon and Nady into Stanford funds or to investments linked to the fallen banker.

Sports Management Firm Linked to Investing

The New York Post reported that IMG, a prominent sports management agency, had helped place client funds with investments run by or associated with Stanford Financial Group, which could have exposed millions of dollars to the financial firm’s alleged fraud.

According to the Post report, IMG and Stanford had a deal wherein Stanford Financial paid IMG a “consulting fee” in exchange for IMG directing client funds to Stanford investments. The Post estimated that payback from Stanford to IMG was in the low- to mid-seven-figures. For the record, IMG denied the quid-pro-quo charges.

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