SEC Charges Ex-Philadelphia Eagles Football Player With $10M Fraud

Merrill Roberts Jr., an ex-Philadelphia Eagles football player, is charged with financial fraud. According to the Securities and Exchange Commission, Robertson bilked investors in a $10M scam.

The SEC claims that Robertson, Sherman Vaughn Jr. and their Cavalier Union Investments LLC promised investors they would invest in diversified holdings. Instead, they took nearly $6M of investors’ money to cover their own spending and pay earlier investors. Expenditures purportedly included cars, luxury items, spa visits, family vacations, and educational expenses.

The two men are accused of claiming that the unregistered debt securities they were selling were safe and would generate up to 20%. They also purportedly told people that experienced invest advisers were running Cavalier’s investment funds when there were no advisers or funds.

The investment firm, said the SEC was “functionally insolvent” soon after it was set up, yet the defendants allegedly concealed this from prospective investors and depended on the latter’s money to stay in business. The government said that Cavalier only invested in restaurants and all of them failed.

The firm’s website touted a list of clients that included entertainers, athletes, churches, institutions, and wealthy and ordinary investors.Their alleged securities fraud purportedly targeted coaches, alumni, employees, and donors of schools where Robertson had been a student, as well as senior investors.

The SEC is charging him, Vaughn, and their firm with federal securities law violations. The regulator wants permanent injunctions, civil penalties, and ill-gotten gains, along with prejudgment interest.

Meantime, the U.S. Attorney’s Office for the Eastern District of Virginia has brought a parallel criminal case against Robertson. He was arrested this week.

Affinity
When someone targets members of their community in a security scam, this is a type of affinity fraud. An affinity fraud involves a fraudster targeting individuals belonging to a specific type of group, whether social, religious, or professional, and either pretends to belong to or be affiliated with the group or is an actual member. Prospective investors may find it easier to place their trust in someone with whom they are affiliated with or is connected to other people they know.

At our securities fraud law firm, we help individuals and institutional clients to recoup their losses from affinity scams and other types of investment fraud. Contact us today.

Read the SEC Complaint (PDF)

Affinity Fraud

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