The SEC has filed civil fraud charges against two felons for allegedly orchestrating a $29.5 million sports betting investment scheme.

John F. Thomas, 74, and Thomas Becker, 72, both of Henderson, Nev., and six entities they control, promised investors 500% to 1,200% returns from pooled investments in sports betting, using what they claimed was a proprietary handicapping system, the SEC's complaint alleged.

The ex-convicts promised the investments were a “low-risk way to triple your funds in less than six months,” the SEC said in its complaint, which was filed in U.S. District Court for the District of Nevada. Instead, the convicts allegedly used the majority of investor money to fund lavish lifestyles, pay commissions to brokers and agents and make Ponzi-like payments to other investors, the SEC alleged.

This is not the first time the duo has been accused of running afoul of securities law. Thomas and Becker pled guilty in 1991 to felony charges of money laundering and conspiracy for running a pyramid investment scheme. The conviction was upheld on appeal in 1996.

This time, the duo used a network of over 150 brokers and agents, who were paid both front- and back-end commissions, to raise least $29.5 million from over 600 investors in more than 40 states from at least August 2014 through the present, the SEC complaint alleged.

Becker told at least one potential investor inb a January 25, 2017, email that “[The] King—Warren Buffet—takes more than 6 years to triple an investor’s funds. We triple money in less than 6 months,” the SEC complaint stated.

Only 15% of the $29.5 million Thomas and Becker took in was actually invested in sports betting and, even then, the duo misrepresented investment performance to investors, the SEC alleged.

For instance, the aggregated investor spreadsheets provided to investors in February 2017 showed that investor accounts increased by $5,344,262, the SEC said. However, the complaint said the betting slips from that day show the duo’s entities actually earned just $105,782 through sports betting. The duo created investor spreadsheets that "inflated actual results by 5,052%,” the SEC alleged.  

The six Nevada-based entities that Thomas and Becker created and ran are Einstein Sports Advisory LLC, QSA LLC, Vegas Basketball Club LLC, Vegas Football Club LLC, Wellington Sports Club LLC, and Welscorp Inc., the complaint said.

The complaint also alleged that Douglas Martin, Paul Hanson, Damian Ostertag and a company owned by Martin sold the duo’s unregistered securities without being registered as brokers or associated with a registered broker.