Clark Hunt, the owner of the KC Chiefs, had legal action brought him against by the state of New Mexico late in August for what the state alleges is his involvement in an investment scandal.
Clark Hunt, owner of the Kansas City Chiefs, allegedly secured $300 million in investments for a hedge fund that he was a partner in by illegally using connections with the former governor of New Mexico, according to a lawsuit against Hunt filed by the state on Aug. 22.
According to Tripp Stelnicki of The New Mexican, Hunt had a working relationship with father and son team Anthony and Marc Correa. The Correas were advisers to then-Governor Bill Richardson, who has been out of office for eight years.
The lawsuit alleges that using their connections to the governor, the Correas arranged for Hunt’s fund – HFV Asset Management – to get the $300 million from the State Investment Council. The suit states that amount was three times more than the amount any other hedge fund managers who took investments from the same government agency received.
State sues owner of NFL’s K.C. Chiefs in investment scandal: https://t.co/r0db2rvOxC
— Chase Carlson (@ChaseACarlson) September 3, 2017
In exchange for their arrangements, Hunt paid the Correas a 25 percent cut of the management fees as a finders fee according to the lawsuit. The suit goes on to state that the hedge fund manager for the State Investment Council actually advised against giving HFV any money at all. To make matters worse, Hunt’s investments failed to produce a desirable return on the taxpayer dollars. One investment lost more than $13 million according to the suit.
What the state is seeking in this filing is clear. Instead of filing criminal charges against Hunt, the state has filed a civil suit in a district court. That’s an important distinction for Hunt, as it isn’t the people of the state of New Mexico that are seeking justice against him, but rather the State Investment Council in a private matter. What’s clear is that the council is looking to recoup some losses.
More from Kansas City Chiefs
- How to Bet on the Chiefs vs. Cardinals in NFL Preseason Week 2
- The 3 Most Intriguing Games on the Chiefs’ Schedule
- DraftKings + FanDuel Kansas Promos: INSTANT $150 Bonus Plus Two Chances to Win!
- Fan-Favorite Locks Up Chiefs Roster Spot With Stellar Preseason Performance
- DraftKings NFL Kansas Promo: Bet $5 on Chiefs vs. Saints, Win $150 Bonus!
Because of that, there is a likely end to this suit. In July, a state judge approved a settlement of $24.25 million in another lawsuit that involved a hedge fund which took money from the State Investment Council and lost it through bad investments. That fund, Chicago’s Vanderbilt Capital, had lost about $90 million taxpayer dollars.
The amount that Hunt could be ordered to pay if indicted is uncertain, but what seems more certain is that legal proceedings like this can move along at a glacial pace. The Vanderbilt Capital settlement took a decade to work out, and it’s unclear whether any fraud was involved in that case or if it was honest incompetence. The fact that allegations of fraud have been made against Hunt could complicate matters.
Next: KC Chiefs: Walk-out songs for Chiefs players
It’s in Hunt’s best interest to settle and avoid a trial given the preponderance of evidence against him and the possible negative consequences of every detail of the state’s case being made public. The State Investment Council is likely similarly interested in a settlement, so it’s just a matter of working out the details from here.