A business pairing the enormously popular fantasy football leagues with the Georgia Lottery must have looked like a money-making combination.
Two eager investors thought so and forked out $500,000 in loans to the Atlanta man who hatched the idea of a fantasy football lottery league. But Timothy Cobb, a former lawyer who once worked for Turner Broadcasting System, was running a scam, according to allegations in a federal indictment unsealed this week.
"Cobb is no longer engaging in fantasy, but reality," said Thomas Holloman, an IRS special agent in charge. "(The) indictment represents the government's effort to throw a penalty flag against Cobb's illegal activity to defraud investors in his start-up of a fantasy league football lottery."
Cobb, 53, pleaded not guilty Tuesday before a U.S. magistrate and was released on $20,000 bond. Cobb's attorney, Manny Arora, said he is preparing a vigorous defense.
Cobb, a graduate of the University of Pennsylvania law school, lost his ability to practice law in 1998 for failing to pay his mandatory dues to the State Bar of Georgia. Ashok Sinha, Turner Broadcasting's vice president for corporate communications, said the company had no comment on Cobb's case and declined to answer questions about his employment history.
In July 2014, Cobb founded Skyboxx Sports LLC, a company he said would match fantasy football leagues with the Georgia Lottery and other state lotteries, the indictment said. But instead of using investors' money for the business, he used it to make alimony payments, take trips to Barbados and Mexico City and dine at restaurants in Atlanta, Miami Beach and New York, the indictment alleged.
When his investors became suspicious and demanded their money back, Cobb emailed their attorney fabricated documents to give the false impression that their funds had been deposited into a Skyboxx bank account, the indictment said.
Georgia Lottery spokeswoman Tandi Reddick said the lottery "was not working with (Cobb) in any way."
Fantasy sports has grown to be widely popular, with football, baseball, basketball and other sports leagues being played worldwide. In 2017, fantasy sports was a $7.2 billion industry with almost 60 million players in the U.S. and Canada, according to research conducted by Ipsos Marketing for the Fantasy Sports Trade Association.
Given the immense popularity of fantasy football, it's not surprising a plan to pair it with lotteries would attract investors, said Atlanta lawyer Brian McEvoy, a former federal prosecutor who specialized in economic crimes. "It's just another good way for an alleged fraudster to lure in a victim."
Florida lawyer Dan Wallach, an expert in fantasy sports and sports gambling, said he had never heard of a scheme such as the one allegedly used by Cobb.
"To somebody who's incredibly wealthy and completely unsophisticated, this might have looked like a great idea," Wallach said. "But your antennae should go up whenever you hear of a state agency getting involved in anything related to sports wagering or fantasy sports."
Cobb is charged with two counts of wire fraud and two counts of filing false tax returns — for omitting the funds he allegedly stole from his investors.
Cobb had allegedly convinced investors that he could run a fantasy football league through the Georgia Lottery, U.S. Attorney Byung J. "BJay" Pak said. "Cobb gambled on getting away with his scheme, but he lost."