How a former NHL star lost millions to a fraud involving an unscrupulous financial adviser

W5: Net loss TSN's Rick Westhead probes an investment scheme that targeted professional athletes, including former Toronto Maple Leaf Bryan Berard.

It’s a cautionary tale of what can go terribly wrong when you trust the wrong person with your finances.

In this case it was NHL star and former Toronto Maple Leaf Bryan Berard who put his faith and trust in the wrong adviser, who he thought was a friend.

Berard grew up on Rhode Island, playing hockey with a dream of one day making it to the NHL. At the age of 17, while still in high school, agents from around New England saw the talent he possessed and began courting Berard. Along with the agents came financial advisers, eager to help manage his money.

One financial adviser in particular made an impact with Berard. His name was Phil Kenner.

A former college hockey player, Kenner pitched Berard with the help of 12-season NHL veteran Derek Sanderson. The hockey connection made Berard feel secure and the pitch sealed the deal. In an interview with TSN’s Rick Westhead, Berard recalled that Kenner promised “safe and conservative methods” so he could “grow” his money and build “a good retirement fund”.

In the 1995 NHL draft, at the age of 19, Berard was the number one draft pick. It was a huge honour and a dream come true, plus it meant a big paycheque for the young hockey player who grew up in a blue collar family with six siblings.

During the first season in his NHL career, Berard made $850,000. At the end of his rookie season he won the Calder Trophy, an award given to the most proficient rookie of the year.

Berard was eventually traded to the Toronto Maple Leafs, where his salary rose to $1 million a season. However, like many athletes, his focus was on his sport, not his finances. Berard claims he would check his financial statements and said “early on with Phil was perfect,” and “money was in an account, you could see it every month in our portfolio statements and things were good”.

Along with at least a dozen other NHL players, Berard trusted Phil Kenner to manage his money planning for his eventual retirement from hockey.

In 2003, Kenner opened his own company, leaving Sanderson and other colleagues behind. And over time, Kenner convinced his clients to put more of their money into real estate in locations like Hawaii, New York and Mexico.

In 2009, Berard began to notice that returns on his investments were drying up.

“Things weren’t working out. (We) didn’t receive any money back at all on any investments,” he recalled.

Berard also claims he discovered forgeries involving his signature on documents. In one case he says he was at a training camp in Philadelphia when the forged documents placed him in Arizona.

Not only were Berard and other hockey players questioning what was happening to their investment, the FBI and the American tax department, the IRS, began a joint investigation – eventually charging Kenner with fraud.

After a trial in United States Federal Court on the 9th of July, 2015, Phil Kenner was convicted of six counts of wire fraud, conspiracy and money laundering.

Court documents revealed that “a proportion of the money would be improperly diverted to bank accounts controlled by Kenner” and a partner “and used for their personal benefit, for unrelated business ventures and to conceal their scheme to defraud.”

Court filings estimate the total fraud involving multiple victims cost them more than $15-million, but Berard believes the amount is much larger.

“My guess is anywhere 50 plus million,” he said, totaling his personal loss at “$3-million plus.”

The NHL Players Association believes the fraud suffered by Bryan Berard and other players who trusted Phil Kenner is not unique and hockey players, particularly rookies, are often targeted by unscrupulous advisors.

“I’m sure we are talking about hundreds in hockey, if not thousands, of guys,” said NHLPA Executive Mathieu Schneider. “We’re starting to catch up, I think, with some of the other leagues. But it’s certainly a big challenge for us.”

Bryan Berard, who lost millions to a man he trusted to invest his money, is now offering advice to young rookies to be wary of whom they trust.

His goal: “(To) try to help these younger hockey players, younger athletes really so it does not happen to them. I don’t want them to have to deal with some day when (they’re) done playing … and realize it’s all gone, because you trusted somebody that you shouldn’t have.”

As for the man who took Berard’s money, Phil Kenner is now awaiting sentencing and is being held at a Federal Detention Centre in Brooklyn, New York. According to an FBI statement, Kenner could “face a maximum of 20 years” imprisonment on each count of conviction as well as the forfeiture of up to $30-million in proceeds derived from the frauds.”

But Kenner still maintains his innocence and claims the convictions are based on a series of misrepresentations and perjuries by government witnesses.