Father and son indicted in New York over failed Arizona sports complex
NEW YORK, April 1 (Reuters) - A father-and-son team has been indicted in Manhattan on charges they defrauded investors in a failed Arizona sports complex, causing more than $200 million in losses for Vanguard Group, AllianceBernstein (AB.N), opens new tab and other municipal bond investors.
Federal prosecutors said Randy Miller, 70, and Chad Miller, 41, were arrested on Tuesday and each charged with securities fraud, wire fraud, conspiracy and aggravated identity theft related to Legacy Park, a sports and entertainment complex in Mesa, Arizona, that collapsed into bankruptcy in May 2023.
The U.S. Securities and Exchange Commission filed related civil charges against the Millers and a third defendant.
Prosecutors said the Millers raised $284 million in bond offerings in 2020 and 2021 by inflating projected revenue for the 320-acre complex, citing forged "pre-contracts" and "letters of intent" from sports organizations to use it.
Authorities said Legacy Cares, which the Millers created to own the park and pay bondholders, made no bond payments after the park's January 2022 opening as revenue and attendance fell short of promises, and the bonds defaulted nine months later.
The indictment also said the Millers, both from Phoenix, misappropriated several hundred thousand dollars to pay themselves and cover personal expenses, including a home for Randy Miller and two SUVs.
Legacy Park was sold for less than $26 million in the Chapter 11 case, and bondholders received only $2.5 million of the $284 million they were owed, authorities said.
Lawyers for the Millers did not immediately respond to requests for comment. Parts of the bond offerings occurred in New York, court papers show.
Bond funds run by Vanguard, AllianceBernstein and Macquarie Group's (MQG.AX), opens new tab Delaware Investments sued the Millers and their underwriter last September, calling Legacy Park "doomed from the start." Pimco (ALVG.DE), opens new tab funds also sued, court records show.
The bondholder complaint said fake letters of intent were provided for at least seven entities, including the Premier League's Manchester United (MANU.N), opens new tab soccer team and a youth affiliate of Major League Soccer's Real Salt Lake.
The criminal case is U.S. v. Miller et al, U.S. District Court, Southern District of New York, No. 25-cr-00138.
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