Former Philadelphia Eagles linebacker Mychal Kendricks was criminally charged Wednesday with an alleged $1.2 million insider trading scheme involving a Harvard-educated investment banker turned TV writer.
Both men are expected to plead guilty in the coming weeks to alleged crimes that occurred between 2013 and 2015, officials said. Prosecutors say Kendricks, 27, of Philadelphia, exchanged cash bribes, Eagles tickets, and invitations to nightclub promotions and to the set of a music video featuring pop star Teyana Taylor for inside financial information on four companies eventually acquired in deals that sent their stock prices soaring.
Kendricks' codefendant, Damilare Sonoiki, 27, more recently a writer on the hit ABC-TV show "Black-ish," allegedly helped facilitate the trades. Public records show that Sonoiki was a Goldman Sachs analyst at the time.
"When individuals engage in insider trading ... it undermines the public's faith in our markets and harms ordinary investors that do play by the rules," U.S. Attorney William M. McSwain said at a news conference announcing the charges in Center City. "Mr. Sonoiki and Mr. Kendricks were definitely not playing by the rules."
Kendricks, who now plays for the Cleveland Browns, apologized to his family as well as the NFL, his coaches, teammates, and the owners of the Eagles and the Browns. In a statement released by his attorney, he admitted to committing the crimes, but suggested he was taken in by Sonoiki's pedigree at Harvard and at the top-flight investment firm. He pledged to repay all the funds he gained illegally.
"While I didn't fully understand all of the details of the illegal trades, I knew it was wrong," Kendricks said. "I wholeheartedly regret my actions."
Sonoiki's lawyer, Mark Wilson of the Federal Defender's Office in Philadelphia, declined to comment.
Court filings _ including a separate lawsuit against both men also filed Wednesday by the U.S. Securities and Exchange Commission _ paint a portrait of Kendricks and Sonoiki as eager to make their way in their chosen professions and get a jump start on earning cash that would set them up for the future.
The two men met at a party in late 2013, the documents say, and kept in touch thereafter.
Sonoiki, recently out of Harvard, worked for the technology, media, and telecommunications division of Goldman Sachs, but was eager to break into money management for professional football players and other athletes.
Kendricks, then about a year into his stint with the Eagles, provided a good connection to break into the field.
"I'm at a messed up place as far as my money is concerned," Kendricks complained to Sonoiki in an August 2014 text message quoted in court papers. "I have enough money to live and to support myself, but not enough money to avoid taxes ... I don't have enough money to buy a business and get the tax breaks I need."
Over the next year, prosecutors allege, Sonoiki repeatedly contacted the linebacker with advance notice of mergers and acquisitions before the news was released publicly. Although they kept most of their communications offline, text messages quoted in the indictment suggest that Kendricks and Sonoiki tried to cover the true intention of their communications with code.
For instance, when Kendricks allegedly moved $80,000 into a brokerage account in July 2014 so Sonoiki could buy stock in a Detroit software company that was about to be acquired by a private equity firm, the linebacker alerted the analyst that he had "moved 80" via a text.
Sonoiki, according to court filings, replied: "You should keep the number 95" _ a reference to the number on Kendricks' team jersey.
Later, while allegedly planning for another illegal trade, Sonoiki suggested that Kendricks bring the money for the stock purchase _ which he referred to as "bread" _ with him on a trip to New York City.
"Try to have the bread if you can," he texted, according to the court filings. "The bread in NYC just isn't the same and I really like my cheesesteaks with the stuff you all have in Philly."
In all, prosecutors said Kendricks, Sonoiki, and a third man not named in court documents but who prosecutors said served as a middleman in some trades, netted $1.2 million in illegal profits from buying stocks of four firms.
Kendricks came to the Eagles as a second-round draft pick from California in 2012 and immediately jumped into the starting lineup, hailed as a future star. But his playing time decreased as the Eagles changed coaches and schemes.
Although he was vocally unhappy with his role by the start of the 2017 season and was made available for trade, no suitable offers came in and the Eagles ended up leaning on him heavily in their Super Bowl run, after starting middle linebacker Jordan Hicks went down with an Achilles' tear.
The Eagles announced in May that they decided to cut ties with Kendricks, who started 13 games for the team last season. According to ESPN.com, Kendricks was released with a post-June 1 designation in a move that freed up $6 million in cap space for the team. He was headed into the fourth season of a five-year, $29 million extension that he signed in 2015.
Kendricks' father, Marvin Kendricks, was briefly an Eagles running back. During Mychal's California childhood, Marvin was addicted to cocaine and he and Mychal have said that Marvin would take Mychal and his brother Eric, now a Vikings linebacker, with him to drug houses.
The Browns released a statement Wednesday saying Kendricks would not accompany the team to Detroit for a preseason game Thursday: "We are aware of the situation and (are) in communication with the league office as we gather more information. Mychal will not make the trip to Detroit. We will comment further at the appropriate time."
