Instead of investing their money in low-risk ventures, Crafton allegedly funneled it into Ponzi schemes with people with whom he had personal or financial relationships. Those relationships were never disclosed to Crafton's clients, and it took years for them to learn that the investments were essentially worthless, the documents state.
Crafton began working for the athletes between 2003 and 2007, and they were unaware that they were losing money until August 2011, according to the documents.
It's unclear how much Crafton profited from the alleged scheme. He controlled about $7.5 million in financial assets, according to Adam Marshall Smith, an attorney representing the athletes.
In 2009, Sun Trust Bank bought Crafton's investment firm, Martin Kelly Capital Management, for $2.7 million in an effort to bolster the bank's Sports and Entertainment investment group, according to court documents.
Sun Trust is also named as a defendant in the case because it allegedly failed to properly monitor Crafton's financial dealings. The bank is accused of negligent hiring, supervision and retention. Sun Trust told Crafton's clients they were losing money in August 2010.
Crafton is accused of violating the Securities Exchange Act, breach of contract and negligence, among other offenses.
Contact Phillip Lucas at 215-854-5914, lucasp@phillynews.com, or follow @UnPhiltered on Twitter. Read his blog at phillyconfidential.com.
