NFL security is investigating a former Cincinnati Bengals player for allegedly attempting to defraud three rookies of more than $350,000, Yahoo! Sports has learned.
The probe involves a trio of 2010 draft picks – Oakland Raiders defensive tackle Lamarr Houston, Arizona Cardinals linebacker Daryl Washington and Denver Broncos cornerback Perrish Cox – who have been interviewed during a league investigation into former Bengals cornerback Horace Smith.
The NFL Players Association has also dispatched an investigator to look into Smith, who was fired in February from his position as the director of college scouting for Dallas-based sports agency Woy & Willis Sports Group. Woy & Willis represents all three of the NFL players who were questioned by NFL security, and has since filed a suit against Smith in the name of agency partner Jordan Woy, seeking a restraining order and temporary injunctive relief in response to Smith’s alleged involvement in the scam.
The suit filed by Woy & Willis states that Smith allegedly took out loans "in excess of $350,000" using the names of three players without their knowledge – many at high rates of interest – then had the money directed into secret accounts with a brokerage firm in New York City, where Smith could access the funds for his own use. Two league sources said Washington and Cox were two of three players' names that were forged. Houston was questioned, but it was found his name wasn't used in the loans, the sources said. The suit also claims Smith engaged in "unauthorized and extravagant expenditures supposedly on behalf of players," and misused two rental cars tied to the sports agency – one of which remains unaccounted for.
Three sources familiar with the NFLPA and league probes said investigators are also looking into a jewelry deal allegedly brokered by Smith, in which the players were offered custom jewelry at nearly double the appraised value. The items, which allegedly included high end Breitling watches priced at nearly $85,000 each, ultimately were not purchased by the players at the inflated prices.
Reached by Yahoo! Sports, Woy said his agency is exploring all possible legal action against Smith.
"You can never foresee when an employee will act in an unauthorized manner," Woy said. "As soon as we found out about his actions we terminated him. We have a great relationship with the players and their families and have filed the appropriate legal actions to protect the players and our company."
Smith didn't return messages from Yahoo! Sports.
According to the suit against him, "Smith clandestinely negotiated for loans supposedly on behalf of the players, executed documents to open brokerage accounts in the names of the players, and executed promissory notes for such players to fund such brokerage accounts, where he forged the signatures of the players and of plaintiff to the promissory notes."
The loans were also falsely guaranteed by Woy & Willis, after Smith allegedly forged the signatures of the partners in the firm. The scam was eventually discovered when the loans went into default, and the players involved told Woy they had never requested, nor had any knowledge of the money. At that point, Smith was fired from his position at Woy & Willis, and after speaking with Woy, the New York City brokerage firm that supplied the loans contacted NFL security. Pending the outcome of Woy's suit, both Woy & Willis and the three players involved could potentially be relieved of any responsibility for the debt.
Woy's suit also alleges that Smith has sought to start his own competing sports agency in Dallas, while contacting Woy & Willis clients and telling them he left the firm voluntarily. Smith's wife, LaShonta Smith, is also named in the suit for allegedly serving as the notarizing agent for the fraudulent signatures on the loans.
A 10th round selection of the Bengals in 1992, Smith landed on the team's practice squad and failed to play in a regular-season NFL game, eventually finishing his career in the Canadian Football League. A source familiar with Smith said he had been a real estate investor before eventually joining Woy's agency in recent years.
Smith is related to former NFL defensive end Sean Jones(notes), who later became an NFL agent before having his investment business – Amaroq Asset Management – come under investigation by the Securities and Exchange Commission in 2007. Jones and several others were also indicted in Texas that same year, on mortgage fraud charges stemming from bogus loans that allegedly diverted proceeds into accounts accessed for personal use. Jones was also suspended by the NFLPA for two years in 2003, for "financial irregularities in Jones' representation of player-clients Ebenezer Ekuban(notes) of the Dallas Cowboys, and Cris Dishman, formerly of the Houston Oilers." Jones eventually was ordered to pay Dishman and his wife $396,500 in damages for multiple infractions, including unauthorized stock trades.