Many reading this would enjoy the opportunity to invest a solid $15 million into mining bitcoins, but an NFL star is alleging in civil court that his financial manager, Ameriprise Financial employee Michael Vick, did exactly that – with the star’s money. The tone of the lawsuit makes it seem that the money manager was so confident in his investment at the time that he assured Darren McFadden, a running back for the Dallas Cowboys and rising star in professional American football, that:
[Michael Vick] promised to pay back Plaintiff any funds that Plaintiff invested in such business venture. Instead, consistent with Plaintiffs recently-revealed pattern and practice Defendant Vick used Plaintiff’s fund to start this bitcoin “business”, including using all of Plaintiff’s monies to purchase all the necessary infrastructure and materials, only to retain all the revenues generated or derived from the “business” along with all the corresponding business assets purchased with Plaintiffs money.
Michael Vick the financial manager should not be confused with the shamed dog-fighting Pittsburgh Steelers quarterback, although they perhaps share a penchant for money making schemes which are less than honest.
McFadden recently came to the realization that the man he put in charge of “safeguarding his use of cash to protect his earnings” was in fact squandering it on pointless schemes, more than just the business of Bitcoin mining, which has been rocked by so more scandals than one article can possibly cover. In total, the Bitcoin operation, which is only vaguely referenced in the initial filing, only represents a fifth of the alleged $15 million which Vick is said to have burned. Due to the exhortations of the supposed white collar scam artist, McFadden was compelled in August, 2008 to vest the advisor with power of attorney over much of his assets, a move which essentially gave the manager unlimited authority where McFadden’s monies were concerned.
Other failed investments were not specified, leading one to wonder if the use of the term “Bitcoin” is meant to herald its traditional negative connotation in a court environment. In any case, the complaint, filed in Pulaski County, Arkansas, outlines a con artist much more successful than most the Bitcoin world has yielded. Other businesses, besides the supposed Bitcoin mining operation, were all used to directly funnel money to Vick himself. One might conclude that the mining operation never actually existed, or worse the $3 million was invested into a “virtual mining” pyramid scheme such as the one Josh Garza is believed to have run in recent yearss.
The actual details of the mining venture will not be available until the case proceeds, and Michael Vick may decide to settle rather than work it out through the justice system, but it would seem a wise move on the part of Vick to convert a fair sum of his misbegotten gains to Bitcoin if he was sure his scheme would eventually be discovered.
The case cites Arkansas law which requires certain behavior from financial managers, advisors, and accountants, and alleges numerous counts of fraud, totaling a sum much greater than $15 million if a jury and judge are to decide. Vick could be paying McFadden for the rest of his life, but for McFadden and his attorneys, the case seems to be more about the dishonorable nature of Vick’s activities. McFadden says that Vick was a family friend, and the complaint states:
As a fiduciary, Defendant should be held liable for his conduct which did not meet the requisite standards of fair dealing, good faith, honesty, and loyalty and which constitutes self-dealing.
Request for comment was not returned by McFadden’s attorneys in time for publication, it being a weekend, but CCN will continue to inquire as to the precise nature of the alleged Bitcoin mining failure. It certainly is an increasingly unprofitable business, mining bitcoins, with difficulty at a near-all-time high on the currently (near) 1.7 million TH/s network. New financial technology is always a good place to hide impropriety, but Vick will be forced to prove in court (should he decide to fight rather than settle the case) that he sincerely believed in the investment, and then will still most likely be compelled to make McFadden whole for his financial injuries.
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Last modified: June 13, 2016 07:23 UTC