Financial Fallout from CTE - Fraudsters Find Another Target

As the August 7 deadline approaches for NFL retirees to register for a settlement from the NFL Concussion Settlement, there have been a slew of troubling stories detailing the depths people will stoop to get of a piece of the pie from brain damaged, incapacitated, or dead former professional athletes. These stories are just the tip of the iceberg.

NFL Concussion Settlement

As a bit of background, NFL retirees sued the NFL for brain injuries from head traumas suffered while playing pro football. The retirees also claimed (which the NFL denied) that the NFL was aware of the risks associated with repetitive traumatic brain injuries, but failed to warn and protect players against the long-term risks and ignored and concealed this information from players.


The two parties reached the NFL Concussion Settlement for approximately $1 billion. The settlement applies to potentially 20,000 retired players though each must register to receive a payment. The amount each retiree receives depends on the severity of the player’s brain injuries.

Piranhas and Sharks

This $1 billion payout has left fraudsters and unscrupulous opportunists frothing at the mouth with dollar signs pouring out. In a recent article, The New York Times referred to it as a “feeding frenzy of lawyers and lenders” looking for a payout through exorbitant contingency fees, usurious loans, scare tactics, and services that are not needed.


“Some lawyers,” the New York Times article points out, “have also hired former players to sign up their brethren, yet do not always disclose that the ex-players are being paid to recruit other retirees.”


Walter Carter, a former NFL defensive end, said that he heard from at least a dozen different companies pitching services, including former athletes. “I watch how these attorneys work, and I think it’s a crime,” Mr. Carter said to the New York Times. But “most of them penetrate the confidence of guys by working with other guys. It’s the ultimate betrayal.”


ESPN’s Outside the Lines reported that the attorneys representing the players will receive an agreed upon $112 million of the $1 billion (quick math: $112mm / $1b = 11%), but many are also charging contingency fees of the actual settlement paid to the player – some up to 40% of the award. Clearly, lawyers need to get paid for the work that they do, but 50% sounds pretty steep to charge men who died for the sport they loved.

Cognitive Decline

Complicating this mess, many of the men who are entitled to benefits from the settlement have racked up huge medical bills from treating their debilitating brain injuries which has left them broke or close to it. Many retirees are also unable to register for the settlement due to their mental deterioration, and their wives and families have taken over the claims process.


The Outside the Lines article stated that two dozen wives sent a letter to the judge presiding over the settlement which stated:


"For many of us, our husband's medical care is dependent upon these monetary awards and they cannot survive another delay. ... As wives and caregivers, we have struggled to keep the family unit intact on a shoestring budget, while managing the burden of their costly care. Our husbands need every penny they are entitled to receive out of this settlement. ... Many of our men are now either gone or completely 'lost' to us. We have chosen to stand by them because we realize they were victims."


Predatory lenders are exploiting these vulnerable and broke retirees. They know certain players have medical bills and other bills they cannot afford, so they provide the retiree or their families an advance in return for a portion of their anticipated settlement. However, the interest rates on the advances can run from 40% to as high as 250%.


In a case of the lowest of the low, an article in Forbes by attorney Darren Heitner detailed an alleged predatory lending scam by RD Legal Funding1 against both NFL retirees and 9/11 responders. The New York Attorney General and Consumer Federal Protection Bureau sued RD Legal for its actions, and the NFL Players Association sent a fraud alert to warn its retirees.


The question isn’t just if the fraud alert will get out to all the retirees, but will the mental state of some retirees preclude them from understanding the risk of these frauds?


The brain trauma in many of these NFL players has been identified as Chronic Traumatic Encephalopathy (“CTE”), a degenerative brain disease with no cure that can only be identified after death. The leading research center of CTE at Boston University has a FAQ which lists the symptoms of CTE: memory loss, confusion, impaired judgment, impulse control problems, aggression, depression, anxiety, suicidality, parkinsonism, and, eventually, progressive dementia.


These symptoms often begin years or even decades after the last brain trauma or end of active athletic involvement.


New York Times Video Link - Inside the CTE Damaged Brain 


A recent study by Dr. Ann McKee, the director of the CTE Center at Boston University, revealed that 110 of the 111 brains of deceased NFL players had CTE. Although there’s clearly selection bias within this sample – many of the families or the athlete himself donated the brain for research to figure out why their husband, father, or self had lost so much of himself in his waning days – the numbers are still staggering and have jump-started early retirements and continued questions about the future of football, particularly at the youth level.


CTE is not only the byproduct of football; instead, it’s from repeated blows to the head and concussions, and therefore, the byproduct of almost any contact sport, including hockey, soccer, rugby, and boxing.


The heartbreaking story of Derek Boogard, an NHL enforcer/fighter posthumously diagnosed with CTE who overdosed on painkillers at the age of 28, provided more fire to the flame of banning fighting in hockey. Dr. McKee also analyzed Boogard’s brain and was astonished at the advanced degree of brain damage in such a young man.


Boogard’s story also mentions other enforcers in the NHL – Rick Rypien and Wade Belak, 27 and 35 years old, respectively – that had committed suicide. Too young, too soon. Many other enforcers were also interviewed and provided more insight into the physical and mental brutality of fighting. As Chris Nowinski, one of the first activists of identifying the dangers of concussions and the threat of CTE, said, “They are trading money for brain cells.”


In another study, four out of six former professional soccer players had CTE and all six had Alzheimer’s. The study followed 14 retired pro soccer players (only six families allowed the researchers to examine their brains), and all 14 had dementia after playing soccer for an average of 26 years. Twelve of the 14 eventually died of dementia.


There’s no way to quantify the percentage of athletes from each contact sport that may now or later suffer from CTE, but it’s fair to say that it should be very closely monitored because of the many risks.

Fraud and CTE

Read the symptoms again. Each of these mental disabilities and cognitive impairments of CTE create a huge risk for professional athletes to be taken advantage of. It’s playing out right now in different ways through the NFL Concussion Settlement, and athletes of all sports will continue to be targeted as the years pass.


The scary thing - as McKee's 110 of 111 NFL brains with CTE found - is how many athletes may be at risk for financial exploitation due to their maladies. We really have no idea what the actual percentage is, but these studies continue to shine a light that the number is drastically higher than anyone could have imagined a decade ago.


I hope that families of professional athletes can identify these symptoms and help the athlete deal with the decline on the horizon. I hope that the families can implement adequate protections against those trying to financially exploit a terrible situation, but there are no assurances of this, particularly when an athlete is without support.


The best we can all do right now is educate the public and ensure the risks – physical, mental, personal, and financial – are understood and evaluated.

Seeing Stars

I cannot get the image of Sidney Crosby’s concussions out of my head.  I’ve seen every one, most of them as they happened. Watching him lie lifeless on the ice, as he did in this year’s Game 3 playoff against the Washington Capitals, I wondered aloud if this could be the end of his career.

The man had missed over 100 games over a two year span with concussion-like symptoms. There were questions of retirement. Amazingly, he was back two games later and went on to win the Stanley Cup as Captain of the Pittsburgh Penguins.


Crosby is one of the top five NHLers of all time with every accolade and accomplishment you can think of, yet I only wonder about his life after the NHL. I wonder if he will be stopped short by dementia and Alzheimer’s, if the cumulative effect of concussions and hits will wear away his psyche. I wonder where the sharks will be hiding with scam investments or power of attorney forms to whittle away at his earnings of $156 million. I hope it never comes to any of this, but for some star athlete somewhere, it will.


1 - RD Legal was offering advances with interest rates as high as 250 percent. Not surprisingly, founder of RD Legal, Roni Dersovitz, has an unrelated case pending with the SEC for allegations that Dersovitz used investor funds to purchase high-stakes investments not disclosed to his investors.