U.S. prosecutors charged American businessman Josh Wander with fraud, according to multiple reports and a statement by the Federal Bureau of Investigation. Wander co-founded the investment firm 777 Partners, which built a portfolio of soccer clubs before it collapsed.
Wander is accused of fabricating financial documents and misleading lenders and investors. The alleged effort aimed to defraud them of nearly half a billion dollars, Inc. reported.
A Soccer Investor Whose Firm Collapsed
777 Partners owned or held stakes in multiple soccer teams in Australia, Brazil and across Europe, The New York Times reports. The Miami-based firm was once “one of the biggest accumulators of European soccer clubs,” according to the Times.
A lender later accused the firm of fraudulent behavior. The firm subsequently saw its British business go bankrupt and its American business enter limited receivership.
Investing in foreign soccer clubs has become a familiar page in the entrepreneur playbook, Inc. noted. Movie star turned business mogul Ryan Reynolds made the move trendy with his 2021 acquisition of Wrexham AFC.
Reynolds is far from the only businessperson to see the clubs as a worthwhile investment, according to Inc. The husband-and-wife co-founders of staffing company Belay and beer company NoFo Brew Co have also taken stakes in European soccer clubs.
What the FBI Alleges
Starting in 2018, Wander began moving money out of 777’s primary line of business, the FBI says. That business underwrote and financed structured settlements related to lawsuits or personal injury claims.
The FBI says the money went into other, less reliable sectors. Those included “streaming platforms, airlines, and professional sports teams such as Sevilla FC and Genoa CFC.”
“Despite warnings from employees … and contrary to the terms of the credit facilities, Wander directed that restricted funds from 777 Partners’ lenders be used to cover the firm’s acquisitions and expenses,” the FBI said.
That spending left the investment firm facing “significant cash and collateral shortfalls,” according to the FBI. Wander allegedly tried to conceal the gaps “by pledging more than $350 million in assets as collateral to certain lenders.”
According to the FBI, Wander made those pledges while knowing the firm “either did not own the collateral or had already pledged the collateral to other lenders.”
A Warning for Founders Buying Into Sports
Inc. framed the case as a lesson for business owners eyeing pro soccer. Some see the sport as a place to park money or build a personal brand.
Those investors, Inc. warned, should make sure they avoid the investor equivalent of a red card. For 777 Partners, the soccer bet ended with a collapsed firm and federal fraud charges against its co-founder.
