Players sue NFL over concussions, then attorney defrauds them to pay mortgage, feds say
An attorney from Florida defrauded former NFL players he represented in a class-action settlement over concussions, federal officials say.
Now he owes more than $12 million and is headed to prison.
Tallahassee attorney Phillip Howard, 62, was sentenced to 14 years in prison after he pleaded guilty to a charge of racketeering, the U.S. Attorney’s Office, Northern District of Florida announced in a Nov. 9 news release.
In a 138-page sentencing memorandum filed Nov. 7, officials laid out a case in which they said Howard’s team doctored players’ medical records and steered them to invest money in companies he controlled without real return on their investment.
Howard’s attorneys did not have any comment for McClatchy News.
“Phillip Howard weaponized the trust of others,” Sherri Onks, FBI special agent in charge, said in the release. “As an attorney, he should have been helping his ailing clients invest in a better future, but instead he stole from their pocketbooks for his own personal gain.”
’Swindling their investments’
Officials said this scheme took place from December 2015 to January 2018.
Howard’s clients were part of a group of former football players submitting payout claims after the NFL settled a class-action lawsuit that argued the league was liable for players’ concussions.
The NFL denied these claims but agreed to settle, with a payout currently worth more than $1.2 billion, according to the claims website.
While Howard represented the players in this class action, officials accuse him of steering his NFL clients’ funds toward his investment companies he called The Cambridge Entities. The companies offered and sold securities to investors in the form of interests in private funds, and many of The Cambridge Entities investors were Howard’s legal clients, officials said.
“Despite reassuring investors that their money was secure, Howard never informed them that almost none of the investment funds yielded a return and failed to disclose that the investment funds had been commingled with funds used to operate his law firm and to issue payroll for its staff, pay Howard’s personal mortgages and otherwise personally enrich Howard,” prosecutors said.
Documents show that in one case, $161,000 invested in The Cambridge Entities went toward paying off the mortgage on one of Howard’s beachfront properties.
Additionally, the man he formed the investment fund with was barred by the Securities and Exchange Commission from associating with investors, brokers or dealers, documents show.
Officials said Howard enticed his clients to invest “while failing to disclose the structure of the Enterprise, the conflicts of interest, the criminal background of persons associated with or employed by the Enterprise and the true nature of the investment companies’ funds.”
In total, Howard obtained over $4 million this way, officials said.
Falsifying medical records
Howard’s team is also accused of recruiting a doctor whose medical license had been revoked, officials said, in order to manipulate players’ medical records to meet the standards for the NFL’s class-action settlement, according to the sentencing memo.
“Yeah, I fudged a few numbers,” the doctor told federal authorities when questioned about inflating players’ impairment scores. “You give them three numbers, four numbers, five numbers, six numbers, seven numbers in a row, you know, and most people couldn’t get past four or five in a row. So, if they got five, I might say four, okay?”
In falsifying the records, Howard’s team made players’ claims ineligible for the settlement program, officials said.
Around the same time, Howard sought out third-party lenders to loan money to his clients using their potential settlements as collateral, to bridge the gap while players were waiting for their payouts to come in, officials said.
Howard found one lending company that agreed to loan $3.1 million to 39 players, according to the sentencing memo.
However, officials said he didn’t disclose to the lending company that the medical records, which were “critical underwriting documents of the loan process,” had been edited.
”Howard and others fraudulently obtained and attempted to obtain approximately $8 million from third-party lenders through such conduct,” the release said.
In December 2022, federal officials announced Howard was indicted on one count of racketeering (RICO), which carries a maximum sentence of 20 years in prison.
In August, Howard pleaded guilty to the count and agreed to pay full restitution, according to the plea agreement.
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