The Puck Stops Here
By D. J. Oliver
Developer Ken Jowdy has, for years, successfully evaded a group of professional hockey players who invested more than $20 million with him and received nothing in return, but it now appears that his shady game may finally be coming to an end.
For nearly a decade, Las Vegas based real estate developer Ken Jowdy has evaded angry investors and side-stepped FBI and SEC investigators for his failed Mexican golf resort project and for allegedly misappropriating millions of dollars of his investors’ money to maintain his opulent lifestyle, but there are signs that the clock is running out on his power play.
Some of his earliest investors, a collection of professional hockey players, have again filed two lawsuits against Jowdy, bolstering previously filed lawsuits that claimed he blew through tens of millions of dollars of his investors’ money on his lavish lifestyle that included – according to a 2009 New York Post article – private jets, parties with porn stars, prostitutes and strippers, and exorbitant salaries for himself and his pals.
Whether these salacious allegations are true or not, one fact is indisputable: since 2002 Jowdy has not returned a single dollar to these investors. The players have brought the suit, they say, in hopes of forcing Jowdy to honor the commitments he made to them when they were all up and coming NHL players.
Most interestingly, the FBI and U.S. Attorney in the Eastern District of New York, which brought a successful criminal case against two men who Jowdy claimed were to blame for the hockey players losing their investments, is now referring to Jowdy as a “co-conspirator” and seeking to seize his assets, including Jowdy’s ownership interest in Diamante Cabo San Lucas. Phil Kenner, who managed some of the hockey players’ money, and his business associate Tommy Constantine, were convicted of wire fraud in federal court last year, but now the Government seems to be shifting its focus toward Jowdy.
“Even before the indictment was brought against Kenner and Constantine and at trial, the Government had taken the position that Jowdy was nothing more than an innocent bystander and that Kenner and Constantine would be using Jowdy simply to deflect their own wrongdoing,” said Andrew Oliveras, Constantine’s New York attorney. “However, since all the evidence was presented at trial, it has finally become clear to the Government that Jowdy received virtually all of the victims’ money, over $20 million in total, and it remains unaccounted for. This was our defense from the onset and the Government seemingly turned a blind eye and rejected it. But now the Government has gone from defending Jowdy, to realizing that we were right and they are now calling him a co-conspirator and going after his assets.”
Jowdy's attorneys objected to the Government's characterization of Jowdy as a co-conspirator, however, in a letter to the Court, Assistant U.S. Attorney, Diane Leonardo stated “…it is the Government’s position the language is appropriate given the facts of and testimony in this case.”
In August of 2015, the Government froze Jowdy’s assets, including his interest in Diamante Cabo San Lucas, and is currently seeking to seize Jowdy’s interest in the golf property, which includes two 18-hole courses, one of which was designed by Tiger Woods.
During the criminal trial last year, Federal prosecutors argued that the vast majority of the funds from the NHL players went to Kenner and Constantine and never made it to Jowdy and his Mexican golf resort developments. This was the crux of the Government’s fraud case against the two men.
However, as more evidence came to light during the trial, even the Federal prosecutors had to admit that the money trail of the millions the hockey players invested did not lead to Kenner and Constantine, but unequivocally to Jowdy. In fact, when prosecutors looked deeper into the financial records, they found that the only funds they could trace to Constantine in connection with the five wire fraud counts that were brought against him, were two $500 wire transfers, money which Constantine’s attorney argued was owed to Constantine by Kenner and the source of which Constantine was unaware.
Kenner and Constantine were, nevertheless, convicted at the end of the 10-week jury trial. But in a shocking turn of events, last month, a key Government witness, upon whose testimony the Government built the better part of its conspiracy case against Constantine, recanted his testimony against Constantine.
Additionally, Kenner, whose defense was centered on blaming Jowdy and Constantine for any wrongdoing, followed suit and recanted his trial testimony against Constantine.
In light of these recent developments, Constantine’s Arizona attorney Michael Morrissey, has filed post-trial motions for acquittal and for a new trial, both of which are currently pending. Regardless of the outcome, it appears that the Government is finally taking a hard look at Jowdy.
But in an effort to fend off the Government’s recent effort to seize his ownership interest in Diamante Cabo San Lucas and to avoid a deeper investigation into his use of investors’ funds, Jowdy is scrambling to reach a settlement with the NHL players who are suing him. Jowdy’s attorneys have asked the presiding judge in the criminal case, who froze Jowdy’s assets, for approval of the civil settlement, but attorneys for both Kenner and Constantine have objected to the settlement because it does not provide restitution to the victims.
In addition, for more than a year, the U.S. Marshals Service Asset Forfeiture Division has, by Court order, requested that it be allowed to visit Diamante Cabo San Lucas to appraise the property and to examine Jowdy's management operations.
“Specifically, by letter dated, October 11, 2016, the United States Marshals requested that Jowdy allow a visit to the Property for the purpose of performing an appraisal of the Property and understanding the financial condition and management operations of the company.", said the Assistant U.S. Attorney, in a letter to the judge who presided over the trial for Kenner and Constantine. "The Marshals also requested that the accountant who constructed the financial statements for the company be available to answer questions. To date, Jowdy has refused these requests."
What’s most striking about the case isn’t that the truth about Jowdy is finally coming to light, but rather how it is that he covered it up for so long. Did Jowdy’s close personal relationship with former high-ranking FBI officials and reporters at the New York Daily News and Fortune Magazine help Jowdy divert an investigation into his questionable business dealings that would have assuredly, many believe, led to an indictment? Did Jowdy obstruct justice when he paid off his most vocal accusers by giving them high-paying jobs in his company?
By the time the game horn sounds, Jowdy may challenge Bernie Madoff for the title of orchestrating one of the longest running cases of financial fraud in U.S. history.
Next in the Series: How did Ken Jowdy, a failed New York bar owner with no real estate development experience, convince an investment advisor and his cadre of professional hockey player clients, that he could build a multi-million dollar golf resort in Mexico and how did he evade his investors and deflect a criminal investigation when it all started to fall apart?