As far as swindlers went, the late Kirk Wright hadn’t quite ascended to the top of the mountain. But he was fast coming within range. Wright, 37, had started and run International Management Associates (IMA), an Atlanta-based hedge fund which came to amass somewhere between $150 million and $200 million in paper assets. The problem was that these assets weren’t worth much more than the paper they were printed on. The fund collapsed in 2006, triggering a rash of federal indictments. The Securities and Exchange Commission slapped Wright with a separate $20 million civil suit. Other legal action resulted, too, most notably a civil suit filed by several retired pro football players against their union, the NFL Players Association, plus the NFL itself and certain individuals for failing to perform due diligence on Wright. The players had lost a combined $20 million or more.
Wright, a resident of Marietta, Georgia, paid a price twice over. After a two-week trial, a federal jury in Atlanta on Wednesday, May 21 found him guilty of mail fraud, securities fraud, and money-laundering stemming from IMA’s collapse. Prosecutors had charged that Wright over the course of several years diverted more than $150 million (an earlier estimate pegged the total at $185 million) from hundreds, if not thousands, of unsuspecting clients for unauthorized purposes, and then used phony documents to create the illusion that the investments were money-makers. In reality, said the feds, Wright had been falsifying asset performance and balance-account data since 2001. Investors received statements showing their assets listed at about 1,000 times more than their actual worth. Frequently, Wright would conduct transactions via Ameritrade for nonexistent accounts. Only a small portion of the money was placed in promised investments, and even that lost value.
Kirk Wright couldn’t resign himself to a future of up to 710 years in prison and a fine of up to $16 million. And so, rather than face the music at his August 26 sentencing, he committed suicide. According to Betty Honey, an investigator with the Fulton County (Ga.) Medical Examiner’s office, Wright hanged himself in the Union City jail sometime on May 24, just three days after his conviction. Her office has ruled out foul play. “My only reaction to it is that I am very saddened by it,” said Michael O’Leary, one of Wright’s lawyers. “I feel very badly for his family.”
Wright’s numerous creditors might not share such anguish. They include seven former NFL defensive stars who had filed a civil suit to recover $20 million. In March 2007, as reported in Union Corruption Update, U.S. District Judge Julie Carnes in Atlanta denied a motion to dismiss their action against the NFL, the Players Association and several individuals whose job it was to perform a background check on Wright. That suit is still pending, though with one of the original plaintiffs having dropped out. The association has maintained that it does not endorse financial advisers and is not responsible for what happened. Additionally, argues the association, the retired players, who include Denver Broncos All-Pro free safety Steve Atwater, breached union rules by not exhausting all available internal remedies before suing.
Recovering even a modest portion of the missing funds will be a challenge. When Wright wasn’t mismanaging his clients’ money, he was spending it. He lived large, splurging on jewelry, prime real estate, luxury vehicles, a $500,000 wedding, and miscellaneous items. When suspicions about his financial dealings finally surfaced, he fled Atlanta for sunny Miami Beach, Fla. He was arrested in May 2006 at Miami Beach’s Ritz-Carlton Hotel, where he was staying under an alias, and with $30,000 in cash, various fake IDs, and seven prepaid cell phones on hand. Equally damning was the fact that he had in his possession a journal listing the pros and cons of hiding out in selected U.S. cities. The journal also included passport information and the phone numbers of embassies in Mexico and the Dominican Republic.
There is always an element of tragedy in death, especially by one’s own hand at a young age. But tragic doesn’t necessarily mean noble. Kirk Wright was a slick, charming con man whose luck finally ran out, the sort of guy who would steal from his own mother. In fact, he did steal from his own mother – at least that’s what federal prosecutors had claimed. His career and life are over; the trail of financial damage he left behind, regrettably, will be around for some time. (cnbc.com, 5/21/08; ESPN.com, 5/25/08; Wall Street Journal, 5/27/08; other sources).