Former Dallas Cowboy involved in $25 million Ponzi scheme

Posted Monday, May. 06, 2013  comments  Print Reprints

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A former Dallas Cowboys player had a role in a $25 million Ponzi scheme that defrauded a number of North Texas investors, according to the federal government.

Michael Kiselak, who played center and guard for the Cowboys from 1998 to 2000, raised at least $24 million from 14 investors in a scheme orchestrated by a California man who was sentenced to 10 years in prison Friday by U.S. District Judge John McBryde in Fort Worth.

Kiselak was not charged and was referred to as M.K. in the criminal matter. But in 2009, he was found liable for more than $20 million in McBryde’s court in a civil complaint filed by the Securities & Exchange Commission, court records show.

Efforts to reach Kiselak, who had lived in a $1.8 million Westlake home, were unsuccessful Monday. Cliff Couch, the attorney who represented him in the matter, declined to comment further, except to say that he did not have authority to speak on Kiselak’s behalf and had not been in contact with him “in quite some time.”

The fraud was carried out over several years, SEC documents say.

Kiselak met Jeffrey Sykes of San Bernardino, Calif., on a golf course around 2006, the documents say. (Sykes was sentenced to prison on Friday and ordered to pay almost $17 million in restitution.) In 2007, the two men partnered to solicit investors in what they told them was a 30-year U.S. Treasury Bill swap program, the SEC said.

Kiselak’s firm, Kiselak Capital Group, put the investors’ money into Sykes’ private equity and venture capital company, Gemstar Capital Group, which poured the money into a variety of venture capital investments, including vineyards, a private jet and other private investments, court records say.

In addition, Kiselak enticed investors by promising high returns, then pocketing a 35 percent fee on all trading profits, which he failed to disclose. And he told investors that his firm made a profit of 2.25 percent per month profit by trading Treasury bills, a false statement. The SEC said such misleading information amounted to fraud in violation of SEC rules.

As much as 75 percent of the investors’ money was returned to them, said a person who declined to be identified. Final distribution of account payments was made in November, court records say.

Lars Berg, the receiver appointed in the case to disburse the investor funds, could not be reached for comment Monday.

SEC attorney Toby M. Galloway declined to comment.

Tarrant Appraisal District records say Kiselak and his family lived in the Vaquero subdivision of Westlake in 2009.

Yamil Berard, 817-390-7705 Twitter: @yberard

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