Father And Son Charged In Alleged $284M Fraud Behind Sprawling Sports Complex
Father-son duo Randall and Chad Miller face civil and criminal charges over an alleged $284M bond fraud scheme that led to the construction of a sprawling sports complex in Mesa, Arizona.
The Department of Justice and Securities and Exchange Commission filed separate cases Tuesday against the pair, alleging they used forged letters of intent and contracts with well-known pro sports teams, including soccer juggernaut Manchester United, to secure $284M in municipal bonds through the state of Arizona.
“Fathers and sons have found shared bonds in sports for generation,” FBI Assistant Director in Charge Christopher Raia said in a statement. “Randy and Chad Miller allegedly chose to use a planned sports complex as a means to exploit and defraud investors.”
The sports complex, known as Legacy Park, opened in October 2022, less than two years after the bonds were issued. But the promised business never materialized. In May 2023, the development and its operators filed for bankruptcy. The complex was eventually sold for less than $26M, effectively wiping out bondholders' equity.
The Millers had told investors that at least seven organizations were lined up to use the park, including the English soccer club Manchester United and a youth affiliate of Major League Soccer’s Real Salt Lake. None of them had actually signed any of the deals cited in the bond prospectus, a Bloomberg report later found.
The commitments helped attract some investment giants to the project. The Vanguard Group, AllianceBernstein Holding and Macquarie Group owned roughly 70% of the debt. NBA point guard Russell Westbrook was among the investors, the local ABC affiliate reported.
The group of investors sued the Millers and Chicago-based bond dealer B.C. Ziegler in September, alleging that they inflated demand for the sports park and saying their investments relied on materially false and misleading information.
A 2020 prospectus for Legacy Park bonds ran longer than 1,000 pages and estimated that the complex would bring in $23M from 25 organizations, along with $19M from another 26 organizations that had signed letters of intent with the park, Bloomberg reported.
Legacy Park’s revenue failed to cover debt costs, and the complex went into default the same year it opened. Legacy Cares, the nonprofit that owned the park, filed for bankruptcy in May 2023, The Arizona Republic reported.
The company had $366M in liabilities and $242M in assets, including what it said was the $229M book value for the complex, which sold for a tenth that value five months later. Bondholders received $2.4M of the sale in cash and an 11% stake in the new owners, according to Bloomberg.
Randy Miller, 70, and Chad Miller, 41, were criminally charged in the U.S. District Court for the District of Arizona, with the case being led by the Southern District of New York’s Securities and Commodities Fraud Task Force. They each face two charges related to securities fraud and a single count of aggravated identity theft.
The SEC case charges the Millers and Jeffrey de Laveaga, Legacy Park’s former chief operating officer, with violating the antifraud provisions of the federal securities laws when they created fake documents to convince potential investors to buy in to the project.
The pair forged signatures and created fake documents from sports teams and an organization that promotes sports for athletes with disabilities as part of their scheme to win investors, the criminal prosecutors allege.
“Randy Miller and Chad Miller swindled investors out of over a quarter of a billion dollars by selling municipal bonds they knew were backed by forgeries and lies,” acting U.S. Attorney Matthew Podolsky said in a statement. “This Office is committed to protecting the integrity of the public finance system. When individuals abuse that system and investors’ trust, we will hold them accountable.”
The 320-acre park is now known as the Arizona Athletic Grounds. It is owned by private investment firm Rocky Mountain Resources, which told the local ABC affiliate in March 2024 that the park was on a path to break even by the end of last year.
