Henderson men accused of bilking bettors want $20K a month

Two Henderson residents accused of running a pyramid scheme have asked a Nevada court for a combined $20,000 a month in living expenses after their assets were frozen.

John Thomas and Thomas Becker — who are being sued by the Security and Exchange Commission for allegedly defrauding more than 600 people in a nearly $30 million scheme — are seeking $12,345 and $7,361 a month respectively for rent, food and other expenses during the length of their trial.

Thomas, 75, claims his rent on a home that includes a casita, hot tub, fire pit and swimming pool is $5,500. He is also seeking a monthly travel allowance to see his sick, elderly mother. Becker, a few years younger, has included $841.09 per month for his six-year-old BMW as part of his request.

Thomas and Becker are also each seeking $10,000 per month for legal fees.

The SEC has asked the court for lower living expenses for Thomas and Becker, arguing that the funds would come from accounts that contain client money.

“Investor funds should not be used to support Thomas and Becker’s extravagance while their defrauded investors may be struggling to pay their bills,” the SEC said in a court filing.

The SEC said it is willing to let each man receive $5,000 a month for living expenses from the frozen accounts and $5,000 for legal expenses.

Crane Pomerantz, Stephen R. Hackett and Maurice VerStandig, the defendants’ lawyers, criticized the SEC in a Jan. 8 reply for “arbitrarily determining what constitutes ‘reasonable’ living expenses, and ignoring legitimate expenses necessary for day-to-day living.”

The lawyers claimed that Thomas is living with three other adults and that the SEC “apparently is advocating” for Thomas to move “his entire family” to another location.

2 Ponzi schemes

Thomas and Becker were behind six Nevada sports betting funds that claimed to be able to triple a client’s investment in as little as a year.

In his pitch to investors, Thomas claimed he could generate better returns than even famed stock investor Warren Buffet.

“Defendants claim to have a proprietary handicapping system, and they tell investors that investing with them is a ‘low-risk way to TRIPLE your funds in less than 6 months.’” the SEC said in its suit against the pair. “These representations are patently false.”

The SEC claims the two men actually spent very little money on sports betting. Rather, they spent $13.9 million on personal and business expenses as well as commissions to agents who brought in clients and another $13.2 million in Ponzi payments, the SEC claims.

The SEC launched its civil suit in August alleging that Thomas and Becker were offering unregistered securities with the help of unregistered brokers. The lawyers for the defendants sought to dismiss the case, arguing that sports gambling does not come under the SEC’s jurisdiction.

The Federal Bureau of Investigation is carrying out a separate criminal investigation, according to court records.

The sports betting funds are not the men’s first business foray to get them in trouble with the law.

Thomas and Becker were arrested by the FBI in 1990 along with a third man and charged with running a $30 million Ponzi scheme.

The three men had received money from companies to buy copy machines and lease them out at a profit. However, many of the machines were never bought and the men split the money between them, according to a 1992 article by the Philadelphia Inquirer.

Thomas and Becker both pleaded guilty to federal felony charges of money laundering and conspiracy to commit fraud. Becker was given a seven-year prison term while Thomas was sentenced to 10 years in prison.

Former clients object

Clients of the sports betting funds that have been trying to get their principal from Thomas were outraged by his request.

“I wouldn’t give a penny to him. It is stolen money,” said Andres Solares, who is among a dozen individuals that joined a lawsuit recently filed against Thomas and Becker.

Pravin Patel, who was part of a group of investors that received their principal and a small profit from Thomas after they threatened to contact the FBI, said the sports bettor “should get nothing.” Patel said Thomas still owes him money.

Pomerantz did not respond to an email requesting clarification on where Thomas was living, with whom and why the other adult family members are not covering their share of the rent.

Thomas was renting a home at 440 Welpman Way, which burned down in June as the SEC carried out its investigation. It is unclear if he is still living there.

Thomas and Becker are seeking to buy the home for $1.6 million, according to a lawsuit they filed against the landlord on Jan. 27 in a Nevada court. The men claim that they have an option to buy it and sought to exercise it after the fire.

It is unclear where the men would get the money to pay for the home or for their lawsuit against the landlord. Taylor Simpson, who is representing Thomas and Becker in that case, declined to answer any questions.

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