Jorge Posada and Jose Contreras Say They're Caught up in a Multimillion Dollar Scam

A few years into his career, former Yankees catcher Jorge Posada was introduced to Juan Carlos Collar and Anthony Fernandez, a pair of Cuban-American money managers based out of Florida who aimed to corner the Latin American baseball player market. Quickly, Collar and Fernandez befriended Posada and his wife Laura, who in turn entrusted their money to the two financial advisors in 1999.

The working relationship between the Posadas and the two men was built on one basic understanding: the Yankee catcher and his wife had little knowledge of the financial world in which they needed to invest in order to maximize the family's earnings. Everyone understood that as an athlete Posada had a limited money making window, so it was imperative for him to make the right investments to secure his wealth for a post-career life.

Posada was an All-Star, one of the highest paid catchers in the game, and a member of the vaunted "Core Four" group of Yankees home grown players that led the team to three consecutive World Series titles from 1998-2000. But even Posada realized that his career would not last forever.

Over the course of several years, first when Collar and Fernandez were at Merrill Lynch, and then when they opened their own firm, Quantum Family Office Group, in 2005, Posada gave the two money men absolute control over his finances.

What exactly happened in the course of those almost 11 years will soon be determined in a Miami, Florida courtroom.

Posada and his wife Laura are suing Collar and Fernandez and their Quantum Ventures, LLC over what they believe was a blatant and negligent mismanagement of funds that resulted in nearly $11.2 million in losses for the former catcher, according to a complaint filed in Miami-Dade county that was obtained by VICE Sports.

Posada is not the only player claiming to have been duped by Collar and Fernandez. In a separate lawsuit, former Yankees, Chicago White Sox, and Philadelphia Phillies pitcher Jose Contreras has made a similar claim of fraud. In total, Contreras's attorneys claim the pitcher lost nearly $2.4 million through Quantum's investments, according to a complaint also filed in a Miami-Dade county court, which was obtained by VICE Sports. (Curiously, Contreras's complaint says he is 40 years old, even though his baseball bio has always listed him as having been born on December 6, 1971—a difference of three years.)

Both cases are likely to go to trial next year.

The two lawsuits outline a similar track, one that frequently befalls athletes, in particular Spanish-only speaking baseball players, like Contreras, who try to overcome their lack of knowledge of the financial world by relinquishing complete control of their finances.

Both players claim they were unaware of any alleged wrongdoings and say that they never authorized the type of risky investments made by Collar and Fernandez. In both situations, Collar and Fernandez received all of the player's mail, filed their tax returns, wrote checks for them, and were given the authority to make whatever investments they wanted with Posada and Contreras's money.

Both players did not find out about inconsistencies in their accounts until 2010.

The Posadas became aware of possible wrongdoings after they hired an independent accountant to audit their finances. Contreras dropped Collar and Fernandez as his money managers in 2010 for reasons unrelated to the lawsuit. He hired new a new investment team, which discovered the alleged irregularities.

Subsequently, investigations by both player's attorneys resulted in untangling the variety of accusations that are made in the complaint. All of the alleged misdoings happened after Collar and Fernandez left Merrill Lynch and started Quantum in 2005.

Collar and Fernandez's attorney, Gustavo Lamela, did not return multiple requests for comment and the phone number listed for Quantum Family Office Group has been disconnected.

The trail of alleged wrongdoings begins with a peculiar real estate deal.

Shortly after founding Quantum in 2005, Collar and Fernandez formed a separate company to handle speculative real estate deals—Sunset Trails, LLC—into which they put $3 million of the Posadas' money. But the $3 million didn't ensure the Posadas any ownership of the properties Sunset Trails purchased. Instead, the money only entitled them to membership in the LLC. So the Posadas had no say in what happened with any purchase.

Contreras made a similar $785,000 investment in Sunset Trails, according to his complaint.

On July 28, 2005, Sunset Trails purchased a plot of land for $13.5 million for the purpose of "developing an elite equestrian-themed community for the wealthy," according to Contreras's complaint. Most peculiar was that Sunset Trails purchased the land from Southern Acres of Florida, LLC, who on that same day had purchased the land for $8,402,900. In less than a day, Southern Acres had made a $5,049,000 profit.

"I've never heard of anything like that," Posada's attorney Barry Lax said in a phone interview. "It's jaw dropping."

To pay for the land, Collar and Fernandez, according to both complaints, put down a payment of $5.5 million, and then borrowed the remaining $8 million from Peninsula Bank. The pair then had Posada sign an unlimited continuing guaranty agreement, which meant that Posada, allegedly unbeknownst to him, had secured the loan.

Lax said Posada was often asked to sign documents that were presented to him without explanation. This usually happened when Posada was on a road trip with the Yankees.

"They would go to Jorge and they would have a stack of documents to sign, and they would just say 'sign here,'" Lax said. "And Jorge would sign it. He completely trusted these guys with all of their finances. All of their money. Whatever the Posadas made, went directly into their accounts with these guys. That's the kind of trust they had. The Posadas never in any way used other money managers, other investments. Everything was through these guys."

Contreras, who does not know how to read or write in English, claims that he was never provided with documents in Spanish. Instead, Contreras, according to his complaint, said Collar and Fernandez brought him documents in English, which the two money managers would then summarize to Contreras in Spanish. But Contreras alleges that Collar and Fernandez neglected to inform him of several apparent conflicts of interest.

For example, both complaints outline that Quantum received a 1 percent management fee ($135,000) for Sunset Trails' $13.5 million land purchase. Quantum also set up various conditions within the deal that gave them an even greater profit. For example, Quantum received the first 20 percent of all net profits. In total, Quantum was in a position to receive nearly 60 percent of all Sunset Trails earnings on the deal, a condition to which no independent company would have agreed upon. But Sunset Trails was not an independent company. Collar and Fernandez managed Sunset Trails.

Additionally, Fernandez served as the real estate agent on the deal, meaning he personally pocketed approximately $350,000 on the sale, according to Posada's complaint.

"Collar and Fernandez told Contreras that Sunset Trails was a good deal, that he would make lots of money from it, and that he could bring his children there to ride horses at any time," Contreras's complaint reads.

When Sunset Trails failed to pay its $8 million loan to Peninsula Bank, Collar and Fernandez formed another company, Pioneer Nova, LLC, which they presented to Contreras and Posada as a new investment. Both complaints allege that Pioneer Nova's sole purpose was to acquire money to pay off Sunset Trails' debt. Posada invested $2 million in Pioneer Nova. Contreras invested $1,550,000.

To this day, Contreras and Posada's money continues to be tied up in the land deal. Because the two players both purchased membership in Sunset Trails instead of actually purchasing an ownership stake in the land Sunset Trails purchased, neither has any say over what happens with the property. Currently, the land is leased to a farmer and Posada's complaint alleges that Collar and Fernandez will make nearly $750,000 from the rent paid on the land for the next five years.

But Posada's losses don't end with the land deal. Additionally, the former Yankee says he invested $8.1 million in Quantum Hedge Fund, which Collar and Fernandez started. Quantum Hedge Fund, according to Posada's complaint, invested in risky, high leverage hedge funds.

Collar and Fernandez started a company called Quantum Alternative to act as a general partner for Quantum Hedge fund. Collar and Fernandez were the managing members of Quantum Alternative, and they were the executive officers of Quantum Hedge Fund, which Posada's lawyers believe is a conflict of interest.

The Posadas "didn't really have an understanding that they were in a hedge fund," Lax said. "They didn't have an understanding of the significant risks. And these two guys managed the hedge fund. They had no track record, they had no experience running a hedge fund. It's really a joke."

Lax declined to characterize the current state of Posada's finances. But in his career, Posada made approximately $120,000,000. Nearly half of that likely went to taxes. So an $11.2 million loss would be significant.

As a result of their experiences with Quantum, the Posadas now likely have a greater understanding of the financial world. Unfortunately, it's certainly not come in the way they would have wanted.