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The SEC has charged a Tallahassee lawyer with defrauding retired NFL players with postconcussion brain injuries.EXPAND
The SEC has charged a Tallahassee lawyer with defrauding retired NFL players with postconcussion brain injuries.

Former Florida Assistant Attorney General Accused of Defrauding Concussed NFL Players

In news that perhaps might not sound surprising for Sunshine State government, a former employee of the Florida Office of the Attorney General was charged today with securities fraud.

This afternoon, the Securities and Exchange Commission (SEC) charged Tallahassee lawyer Phillip Timothy Howard with defrauding not just anyone, but retired NFL players dealing with postconcussion brain injuries. According to a complaint released today, Howard and a business partner, Don Warner Reinhard (more about him in a second), allegedly acted as financial advisers for more than 70 retired NFL players but, the SEC says, "failed to mention that he had served jail time for bankruptcy and tax fraud, and had been barred by the SEC from working for any investment adviser firm." Howard had apparently been running two hedge funds out of his Tallahassee law office that allegedly wound up functioning more like personal piggy banks and/or a pyramid scheme. The pair ran a company called Cambridge Capital Group Advisers LLC.

"Howard represented National Football League ('NFL') players who suffered concussion-related brain injuries during their NFL careers in connection with a class-action lawsuit against the NFL," the SEC's complaint reads. "Howard has acknowledged that these players' 'brain function is not there, their body has been beat up from the NFL, they don’t have employment capacity, they don’t have credit, and they don’t have capital anymore.' Nonetheless, Howard and Reinhard solicited these players to invest in the Funds.  As a result, the majority of the Funds' investors are former NFL players. More than half of them used their retirement accounts in order to make the investments happen."

Per the SEC, Howard promised retired NFL players he'd invest their retirement savings into "a diverse
range of securities with a secondary focus on litigation settlement advances," but in fact spent most of the money giving other NFL players advances on their own concussion settlements that they'd earned from NFL concussion lawsuits. On top of that, however, the SEC says Howard and Reinhard also skimmed 20 percent of those payments — about $973,000 — off the top for themselves. The SEC also says Howard used some of that money "to cover costs associated with [his] personal residential mortgages."

"The SEC further alleges that Howard defrauded investors by borrowing $612,000 in undisclosed personal mortgage loans from the funds, which he never repaid, and that Howard and Reinhard used investor funds to pay themselves fabricated 'broker fees' on settlement advance loans to Howard's legal clients," the SEC said.

According to his online bio, Howard served as a "Special Assistant Attorney General" in Florida's capital from 1987 to 1993. From there, he also went on to work for the Florida Agency for Health Care Administration in the '90s. At one point, he was even nominated to be the top federal prosecutor in the Northern District of Florida. This past April, the Florida Bar filed a complaint against Howard amid claims he'd misappropriated client funds and allegedly misused money intended for a paralyzed client he'd represented.

Howard allegedly told investors that no one associated with Cambridge had ever gone to prison. That, of course, was untrue: His business partner Reinhard is, in fact, locked up right now.

"Reinhard is currently incarcerated at a Florida state prison in Lawtey," the SEC said in its complaint. "From no later than March 2015 until at least February 2017, Reinhard managed Cambridge and the Funds with Howard during this same time period. "

In 2017, Reinhard was arrested in Bay County on child-abuse charges after he allegedly forced a 3-year-old to eat his own feces during a potty-training exercise. According to the Panama City News-Herald, Reinhard had "at one time been a chairman of the Florida State University Seminole Booster board" and "was revered at FSU football games, where he sat in a private skybox, drove luxury cars, and owned beach houses." He was sentenced to five years in prison in 2018 and also pleaded guilty to probation violations that year in a different case.

"We allege that Cambridge, Howard, and Reinhard defrauded these particularly vulnerable investors, many of whom invested their retirement savings," the SEC's Miami regional office director, Eric Bustillo, said today in a media release. "Instead of investing all of the funds' assets as promised, Howard and Reinhard used a significant portion of investor money to line their own pockets."

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