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Billionaire former Premier League club owner pleads guilty to fraud: ‘I am so embarrassed’

One of Britain’s richest men and a man synonymous with Tottenham Hotspur Football Club has pleaded guilty to fraud in the U.S.

Joe Lewis — who founded ENIC Sports Inc, the company which owns the vast majority of shares in Spurs — appeared in court in Manhattan on Wednesday to plead guilty to two counts of securities fraud and one count of conspiracy to commit securities fraud.

He had been accused of using inside information about companies in order to tip off friends and associates, including “his personal pilots, personal assistants (and) romantic partners”, so that they could profit from the information by trading securities in advance of disclosure to the public. Lewis allegedly did this “as a way to give them compensation and gifts” and he “tipped his personal pilot and encouraged them to trade”.

“I am so embarrassed and I apologise to the court for my conduct,” Lewis, 86, told U.S. district judge Jessica Clarke, via Reuters.

Sentencing has been set for March with a stipulated guideline range of 18 to 24 months’ imprisonment.

Lewis is worth $6.2billion, according to Forbes, and his wealth was estimated at £5.096bn by the 2023 Sunday Times Rich List.

Mark Herr, Lewis’ attorney, said on Wednesday: “Today, Joe Lewis acknowledged his conduct in connection with a number of stock trades by individuals close to him.

“Mr Lewis did not engage in improper trading in his own accounts. His conduct should be viewed in the context of Mr. Lewis’ long life of accomplishment and integrity. Soon to be 87, Mr. Lewis is deeply sorry, embarrassed, and apologises to the court, his family, and all those who have come to rely on him.”

Tell me about Joe Lewis…

Born above a pub in east London in 1937, Lewis is a self-made man.

He left school at 15 to work for his father’s catering company and quickly displayed a flair for making money. He made part of his early fortune from the Beefeater pub chain, before earning serious money from playing currency and futures markets.

He set up the Tavistock Group, which now has more than 200 assets across 15 countries. One of Tavistock’s assets is the investment firm ENIC (formerly English National Investment Company).

In 2001, ENIC bought a controlling stake in Tottenham Hotspur. Lewis “ceded official control” of the Premier League club in October 2022.

Lewis (left) with Tottenham Hotspur chairman Daniel Levy (Catherine Ivill/AMA/Corbis via Getty Images)

He has his own trading desk on his 98.4-metre yacht Aviva III, and a billion-pound art collection said to include work by Pablo Picasso, Henri Matisse and Lucian Freud.

In November 2018, Lewis sold the David Hockney painting, Portrait of an Artist (Pool with Two Figures), for $90.3million at Christie’s in New York.

It meant Hockney became the most expensive living artist to have their work sold at auction — but the sale was even more remarkable because Lewis declined to offer a reserve price; so confident was he that the painting would change hands for far more than the $18million starting price.

Lewis spends most of his time in the Bahamas, home of his 600-acre Albany resort. It is, according to Lewis’ company’s website, jointly owned by Tiger Woods, Ernie Els and Justin Timberlake. He also owns huge amounts of land in places including Orlando, Florida and Argentina.

What was he accused of?

The claims in the 29-page indictment read like the plot of a television drama, involving companies with interests as diverse as Australian cattle farming and genetic diseases, glamorous locations around the world, “the Girlfriend”, two pilots, and “the Boss”.

Lewis was accused of 13 counts of securities fraud, each of which carries a maximum sentence of 20 years in prison; three counts of securities fraud (each a maximum sentence of 25 years in prison); and three counts of conspiracy (each a maximum sentence of five years in prison).

The U.S. government alleged that between 2013 and 2021, Lewis violated securities laws through inside trading and submitting false and misleading filings with the United States Securities and Exchange Commission (SEC), which enforces the law against market manipulation.

The document said that “using the information stolen by Lewis”, he and his employees, romantic partners and friends were able to “collectively make millions of dollars by insider trading” in the stocks of four companies: Solid Biosciences, Mirati Therapeutics, Australian Agricultural Company, and BCTG Acquisition Corporation.

Lewis was also alleged to “conspired with others to defraud Mirati Therapeutics, the investing public, and the SEC” by “amassing beneficial ownership” of more than 20 per cent of the oncology company and “hiding” that “undisclosed ownership”.

Joe Lewis

Lewis leaves court on on July 26, 2023 (Michael M. Santiago/Getty Images)

One woman, referred to as “the Girlfriend” — Carolyn W. Carter, 33, “a U.S. citizen who resides in the U.S. Virgin Islands” — was alleged to have made $849,000 after a tip-off from Lewis about buying stock while they were staying at the Four Seasons Hotel in Seoul, South Korea, in 2019.

“Carter and Lewis were in a romantic relationship from approximately 2013 to 2020,” according to a court document.

Lewis’ personal pilots — named as Patrick J. O’Connor, 66, and Bryan L. Waugh (also known as Marty Waugh), 64 — were also charged with seven counts of securities fraud and one count of conspiracy. They both pleased not guilty to all counts.

On one occasion, it was claimed O’Connor texted a friend to say: “Boss is helping us out and told us to get ASAP”, referring to buying stock in Mirati Therapeutics. Lewis, it was claimed, then transferred the pilots $500,000 each to do just that.

Another time, the indictment said O’Connor did not receive the tip early enough to sell before his stock fell. “Just wish the Boss would have given us a little earlier heads up,” he wrote in an email to his stockbroker.

Why does this matter to fans of Premier League football?

Lewis was linked to Tottenham Hotspur for more than 20 years, and the company he founded, ENIC Sports Inc., owns 85.56 per cent of the club’s shares.

He has been synonymous with Spurs since ENIC bought Alan Sugar’s 29.9 per cent stake for £22million (then around $32m) in December 2000.

He entrusted chairman Daniel Levy with the day-to-day running of Spurs and was always extremely detached, but he did attend key games, such as the first game at the new stadium and the 2019 Champions League final. The last match Lewis attended was Tottenham’s home win over West Ham in February 2023.

In October 2022, Lewis was removed as a “person of significant control” of Tottenham Hotspur, according to Companies House, the UK’s registrar of companies.

This was described at the time as a restructuring of the Lewis Family Trusts, with one eye on the long-term future (Lewis turned 86 in February). The day-to-day running of the club would be unaffected.

Tottenham declined to comment on Lewis pleading guilty. A club spokesperson said in July: “The owner of Tottenham Hotspur Football Club is ENIC, with majority control held by a Family Discretionary Trust of which Mr Joseph Lewis is not a beneficiary.

“The Trust is managed by two independent professional trustees on behalf of its beneficiaries. Mr Lewis ceased to be a person with significant control of the Club in October 2022.

“This is a U.S. legal matter unconnected with the Club and as such have no comment.”

How did we get here?

On July 25, Lewis was indicted for “orchestrating a brazen insider trading scheme”. This involved passing information to “romantic partners and his private pilots,” according to the U.S. attorney for the Southern District of New York, Damian Williams.

Lewis’ lawyer David M. Zornow told Bloomberg the government had made an “egregious error in judgment” in charging Lewis, adding his client is man of “impeccable integrity and prodigious accomplishment” and he would “defend him vigorously in court”.

Lewis pleaded not guilty to U.S. Magistrate Judge Valerie Figueredo in Manhattan federal court and his bail was set at $300million, secured against his yacht and aircraft.

He was due back in court on September 5 but the case lagged after it emerged Lewis’ firm Tavistock Financial LLC had paid the legal fees for the billionaire’s pilots, O’Connor and Waugh.

Joe Lewis

Lewis was removed as a “person of significant control” in October 2022 (Catherine Ivill/AMA/Corbis via Getty Images)

The pilots appeared before Judge Jessica G. L. Clarke in the U.S. District Court for the Southern District of New York for a “Curcio” hearing at the 500 Pearl Street courthouse in Manhattan in October. A Curcio hearing is typical in a U.S. criminal trial where conflicts of interest may arise.

O’Connor and Waugh each told the judge they understood the risks and waived their rights to “conflict-free” counsel.

On January 24, Lewis pleaded guilty to two counts of securities fraud and one count of conspiracy to commit securities fraud.

Lewis’ bail conditions remain in place and he retained the right to appeal any custodial sentence.

Additional contributors: Matt Slater, Adam Crafton, Charlie Eccleshare

(Top image: Getty Images; design: Sam Richardson)

Read the full article here

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