INVESTMENTS FROM AT least 15 current and former NFL players, including Von Miller, Nick Foles and Mark Brunell, were used in a complex investment program designed to profit at the expense of low-income borrowers, according to civil and bankruptcy court documents obtained by ESPN.
The players invested in a now-defunct company that funded a separate business targeting Texans with troubled credit ratings who needed quick cash and would put up their cars as collateral on loans averaging $1,000. Because of fees and interest in excess of 300%, borrowers would agree to pay hundreds of additional dollars to repay the loans. The so-called auto title loans are legal in Texas but prohibited in many states because they prey on people who lack access to traditional banking sources.
Yet it turned out to be a bad deal not just for desperate borrowers. The orchestrator of the investment, longtime financial adviser Joseph “Joey” Feste, claimed in court filings that the venture was in default of promises to pay investors some $40 million. It’s not known how much the athletes lost, although millions linked to NFL players helped fund the title loans, according to documents Feste filed. Feste, owner of KM Capital Management, an Austin, Texas-based private wealth management firm that caters to athletes, ultimately lost his status as an NFL Players Association-registered financial adviser, in part for failing to disclose to the union the civil litigation related to the title loans.
Today, Feste still acts as a financial adviser to NFL players, though without the union’s official blessing, with a client list featuring recently retired Drew Brees and current talents such as Patrick Mahomes and Tua Tagovailoa.
Neither the players who invested nor Feste were charged with any crimes, though ESPN has learned Feste was the subject of a whistleblower complaint filed in late 2019 with the U.S. Securities and Exchange Commission. Feste declined multiple interview requests for this story, and his attorneys declined to answer specific questions related to the investments which were part of a bankruptcy proceeding that ended last October.
“My client’s reaction is that this is an old story about an old investment that has been vetted by several regulatory entities charged with the responsibility of doing so,” said attorney Andrew Kim, who represents Feste. “It was completely cleared of any problems. It was a totally legal business.”
Kim noted: “And the court documents describe it all. It is all there in the court documents.”
The players’ involvement in a business that targeted low-income borrowers puts them at odds with recent statements and actions by the league and the NFLPA on issues of inequality and social and racial injustice. “The Players Coalition has led the efforts of players and clubs to engage with leaders at all levels of government … on issues like bail and criminal justice reform; [to] promote education reform and economic opportunity in disadvantaged communities,” among other efforts, the league and union said in a joint statement last September.
When contacted by ESPN, some players said they did not know how their money had been invested or whether they made or lost money. “I am not sure of the particulars,” said former NFL backup quarterback Ken Dorsey, now the Buffalo Bills’ quarterbacks coach. “I am not as good as I hope to be with some of this stuff. Part of my problem is I don’t understand a lot of it. I kind of trust the people.”
Other current or former players, including Foles and Miller, did not respond to questions from ESPN or declined to discuss their investments.
THE DETAILS OF the title loan investment involving the athletes have largely been buried in nondescript civil and bankruptcy case files in the federal court system. Though the file has been publicly accessible for years, the athlete connections have not been made public prior to ESPN investigating the case.
In 2011, Feste founded Storehouse Lending LLC,…