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Peca blindsided by financial adviser

In an interview with the New York Daily News, former Sabres captain Michael Peca likened his experience with Phil Kenner to watching a movie. Everything seemed so clear when looking back and examining their relationship from a distance. At the time, he overlooked details that would have set off alarms.

“I met Phil when I was 22, and he built a relationship with me and he knew how to play off that relationship,” Peca told the newspaper after testifying against Kenner in a Long Island federal courtroom. “It’s like a movie, when you say, ‘How did I miss that?’ and then you go back and re-watch it and see how subtle it was.”

Kenner and former business partner Tommy Constantine are accused of stealing some $15 million from Peca and a dozen other NHL players, and several police officers, who invested in an elaborate venture that prosecutors claim was a scam. Kenner and Constantine are on trial on charges of wire fraud, money laundering and conspiracy.

The complex case has more twists and turns than a striptease and, in certain aspects, has come to resemble one. There are layers upon layers that need to be peeled away before getting to the cold, naked truth. It involves real estate deals in Hawaii, a country club, a prepaid debit card company and other investments.

At the very least the case is another cautionary tale about athletes who have more money than they can manage and put their faith in the wrong people. Many don’t realize they lost massive chunks of money until it’s too late.

Peca and his wife, Kristin, testified 10 days ago and outlined a relationship with Kenner that began in Buffalo. Kenner grew up in Amherst, was a star hockey player at Nichols School, earned a scholarship to Rensselaer Polytechnic Institute and became a financial adviser to several players.

Athletes are constantly warned about trusting people, but Kenner had credentials. He had connections to NHL players and worked in an investment firm with Derek Sanderson, who played for the Bruins in the 1960s and early 70s. He was the best friend and college roommate of veteran Joe Juneau, who also played in Buffalo.

The big picture revealed a legitimate businessman who was often hanging around the Sabres’ dressing room. Kenner befriended Jason Woolley, Jay McKee and Brian Campbell and others across the league, including defenseman Bryan Berard. He was a schmoozer who had helped them manage money early in their careers.

Initial success gave him credibility. Once they started signing fatter contracts, he effectively convinced them to invest more with him. Peca, for example, was happy to invest $100,000 with Kenner after signing a four-year deal worth $20 million with the Islanders. Others made similar decisions.

By all appearances, the players messed up. They trusted Kenner, who prosecutors portray as a leech who illegally fed off his rich and famous friends so he could live a fantasy lifestyle. Kenner has been sitting in the clink since he was indicted 18 months ago. He has blamed others for his legal problems.

A jury will determine Kenner’s fate. It’s unlikely that the NHL players and others involved will fully recover their money. It’s not even clear exactly how much each player invested.

Peca didn’t return a voicemail and text message. He’s a standup guy, and I hoped he would provide insight into the case and share lessons learned. It was surprising to read he relinquished power of attorney to Kenner to manage lines of credit. It’s believed Peca lost nearly $3 million, or less than one-eighth of his total NHL earnings.

We’re quick to criticize athletes for blowing their money and essentially disrespecting their fortune in life. Professional sports are littered with tales about players who lost millions of dollars because they lived beyond their means with their mansions, luxury cars, vacations and heaven knows what else.

It’s nauseating for common folk who can barely afford tickets to watch them play after working all week and living paycheck to paycheck. Most people feel fortunate if they can feed their families and buy a modest house. Many will fail to make $1 million in their lifetimes and can’t fathom losing $3 million.

Average Joes aren’t going to have much sympathy for the players involved, and perhaps they don’t deserve any. It’s hard to feel sorry for wealthy people who lost a boatload of money when they have millions more stuffed away in other coffers. Still, it doesn’t mean they should fall victim to an accused swindler.

In fact, it could happen to anyone.

Peca didn’t graduate from college, but he was never short on intelligence. He enjoyed wealth that came from his career while otherwise leading an ordinary lifestyle. He and his wife were raising their children while living in Western New York. He wasn’t known as a big spender.

We’re not talking about a collection of dumb jocks who blindly opened their checkbooks to some stranger. They were investing with a financial adviser who, in some cases, was among their closest friends. They didn’t think twice about not getting monthly financial statements. They assumed all was well.

Apparently, they were wrong.

It appears their downfall was a pack mentality that often comes with playing for a professional team. Teammates are like family members. If they see one getting a solid return on investment, others follow along. It’s particularly true if the player investing is respected inside the dressing room.

Based on court proceedings, it sounded as if Peca fell into a trap that caused him to spend good money after bad. He invested $250,000 in an attempt to recover money that already was lost and created a deeper hole.

“So much money was missing,” Peca testified, according to the Daily News. “For us to recover some of that money … there was an element of desperation.”

Sometimes, that’s exactly how it happens. The warning signs were there all along, but Peca didn’t understand the movie until they rolled the credits. He was left wondering how he missed Kenner lurking in the background.

email: bgleason@buffnews.com

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