Kevin McCoy

USA TODAY

Denver Broncos quarterback Mark Sanchez and other professional athletes were scammed out of millions of dollars by an investment adviser who gained their trust by stressing his Christian faith and claiming to be a certified public accountant, a newly unsealed federal lawsuit charges.

Sanchez, San Francisco Giants pitcher Jake Peavy and Roy Oswalt, a retired pitcher who starred with the Houston Astros and other teams, were among those defrauded in the alleged scheme, according to the civil lawsuit filed in Texas by the Securities and Exchange Commission.

The three were clients of investment adviser Ash Narayan, managing partner of the California office of Texas-based RGT Capital Management. A legal brief in the case said Narayan "stressed his Christian faith, his interest in charity, and his success advising other similar clients," along with falsely saying he was a CPA.

"Regrettably, these relationships were built on lies," the filing charged. Narayan allegedly exploited the athletes and other clients," and "funneled their savings into a money-losing business and his own pocket," said Shamoil Shipchandler, director of the SEC's Fort Worth, Texas office.

The SEC lawsuit accused Narayan of fraudulently channeling the money to The Ticket Reserve, a struggling online sports and entertainment ticketing business formed to help fans reserve face-value seats for sports events for which teams had not yet been determined.

Narayan, who was the ticketing business' chief fundraiser, a member of the company's board of directors and owner of more than 3 million of the firm's shares, channeled more than $33 million of clients' money to the business from 2010 to 2016, usually without receiving consent, the lawsuit charges.

The ticketing business needed the cash infusions from Narayan's unsuspecting clients to remain in operation, the lawsuit charged. In a May 26, 2014, email to Narayan, Richard Harmon, CEO of the Ticket Exchange, allegedly wrote: "To be sure our revenue sucks. Our balance sheet is a disaster."

In exchange for the transactions, Narayan received nearly $2 million in hidden compensation from the ticketing business, with most of the money directly traceable to funds stolen from his client, the lawsuit charged.

Harmon and other officials of the ticketing business were charged with knowingly or recklessly taking steps to conceal Narayan's compensation. They alternately characterized the payments as directors' fees or as loans, a designation that enabled the investment adviser to avoid reporting the payments as taxable income, the lawsuit charged.

The Ticket Reserve also made Ponzi scheme-like payments to existing investors using money from new investors, the lawsuit charged. After being fired from his investment firm and losing access to his former clients' accounts, Narayan allegedly began redirecting the sham fees he received back to The Ticket Exchange.

The SEC obtained a May 24 emergency court order freezing the assets of Narayan, Harmon and John Kaptrosky, the ticketing company's chief operating officer. The order similarly froze assets of The Ticket Reserve. Chief U.S. District Court Judge Barbara Lynn in Dallas appointed a receiver to gather, take possession and preserve the company's assets.

Defense lawyer Howard Privette said Narayan worked cooperatively with SEC investigators and was disappointed by the court action. "Mr. Narayan has always sought to act in his clients’ best interests. Accordingly, he will continue to work with the SEC to ensure that this matter is resolved in the most favorable manner for those clients," Privette said in a statement.

Attorney Lanny Davis said neither Harmon nor his Kaptrosky did anything wrong. "They and the company were in fact victims of someone else's alleged wrongdoing," and the businessmen "look forward to continuing to cooperate with the SEC to resolve this matter as soon as possible," said Davis.

Although the athletes told Narayan they wanted to pursue conservative investments, the SEC lawsuit characterized the ticketing business as "very risky and inconsistent."

Oswalt agreed in 2010 to invest no more than $300,000 in the company. However, Narayan directed more than $7 million of the pitcher's money to the business without Oswalt's knowledge or consent, the lawsuit alleged.

Sanchez, who formerly starred with the New York Jets, agreed to invest just $100,000 in the business. But Narayan allegedly channeled more than $7 million of the quarterback's money to The Ticket Reserve.

Peavy never authorized investments in the ticketing business and never knew of its existence until February 2016. A court filing shows it was then when Oswalt phoned and told Peavy that Narayan had been fired amid discoveries of unauthorized client investments.

Follow USA TODAY reporter Kevin McCoy on Twitter: @kmccoynyc