OMG, was this why he was friends with Donald Trump?! A shared interest in charity self-dealing?
Tom Brady has had a really bad year… he got divorced from his supermodel wife, his un-retirement has started to look like Michael Jordan‘s return to basketball, and the crypto marketplace he invested in went bankrupt after allegedly stealing millions from users — leaving him as the face of potentially one of the biggest financial scams in history. Heck, he’s even been named as a defendant in the class action lawsuit against him FTX.
You may notice how in each case these are the calamities NFL star brought upon himself. By many accounts, he had every chance to fix things with Gisele Bundchen. He could have kept his rep as the GOAT QB by not coming back. And he didn’t have to hitch his wagon to a cryptocurrency company. He already had more money than most people can spend in a lifetime, and it’s not like there weren’t tons of critics warning against it.
Related: Gisele Brought Sexy Jiu-Jitsu Instructor To Costa Rica… To Homeschool The Kids??
Well, you can add one more self-own to the list. According to a new bombshell Daily Beast report, Brady took money from his non-profit, the TB12 Foundationand used it to fund his very-much-for-profit company, TB12, Inc.
They may have almost identical names — heck, their websites even look alike — but they’re very different organizations. The TB12 Foundation is a charitable organization founded by Brady in 2015 “to help at-risk athletes” find the help they need “to overcome injuries or obstacles.” Meanwhile, TB12, Inc. — co-founded with a friend and “body coach” Alex Guerrero — sells protein powder and other supplements, sports equipment, apparel, that kind of thing. It is in no way a charity.
But DB got hold of tax documents they say prove the TB12 Foundation — for some reason — has given at least $1.6 MILLION to TB12, Inc.!
According to the outlet, TB12, Inc was going under, with a balance of negative $7 million as recently as 2020. (BTW, the company previously came under fire for getting a $960,000 PPP loan that year, near the start of the pandemic — right after Brady signed his $50 million deal with the Tampa Bay Buccaneers. )
But at the same time the business was hurting, the TB12 charity was getting a huge injection of funds from a small handful of donors, mostly extremely rich Brady fans like YouTube star Logan Thirtyacre and Canadian cheese magnate Lino Saputo Jr.
In 2021, TB12, Inc.’s co-founder Guerrero and then-CEO John Burns became directors of the non-profit. And according to tax records they got paid handsomely for the role, $497,461 and $630,846, respectively. They were apparently paid by TB12, Inc. — but we now know TB12, Inc was getting money from the charity anyway. So it’s really starting to look like the charity was used as a fund to bail out the failing sports supplement business.
Related: Donald Trump Reportedly Took Money From A Children’s Cancer Charity
DB spoke to Laurie Styronexecutive director of CharityWatch, a nonprofit watchdog, for her expert opinion on what’s going on with Brady’s books. First off, she made clear this is NOT how things are done:
“I can say that I haven’t come across this type of arrangement too often in my 19 years of nonprofit financial analysis in a watchdog role.”
“A charity’s board members have a fiduciary duty to act in the best interest of the charity at all times. Doing so becomes more complicated when there are competing interests between nonprofit and for-profit legal entities, particularly when the two organizations share key staff who have to balance their fiduciary duties between the two. It has the potential to get tricky if there aren’t adequate safeguards in place.”
And it sounds like there weren’t. She added:
“When a charity has a related for-profit legal entity, it can turn into an accountability black hole.”
Eep! That doesn’t sound good! She elaborated:
“If the charity is granting or reimbursing funds to the for-profit entity, and the for-profit is then paying money to other companies or individuals, there is a danger that charitable dollars are indirectly subsidizing the expenses of the for-profit. Money is fungible.”
Whether Tom himself was aware of any of this is unclear. But he knew what he was getting into with Guerrero, who in 2012 was investigated by the FTC For posing as a medical doctor and claiming dietary supplements he sold could cure cancer. That was just a year before he and Brady founded TB12, Inc. together. Together, Brady and Guerrero were accused of selling more supplements which were not remotely proven to do what they said. Forbes calling their sales of “immunity” vitamins to be “unethical and misleading.” That’s starting to sound familiar…
There’s also the fact the TB12 Foundation promotes the questionable training methods and products sold by TB12, Inc — though that’s more of a gray area, as Styron explains:
Charities have pretty wide latitude to decide what programs they want to conduct without breaking any laws or hard rules. But there is still a question of whether or not it is ethical for a charity to focus so much of its resources on programs that provide publicity to its founder. The answer really depends on how much public good is being provided and whether or not this publicity is what is driving the charity’s decisions about what programs to conduct.”
It’s also possible the charity was set up in the first place primarily as a promotional tool for the business. If that’s true, it would hardly come as a shock if the folks running it intermingled the money.
(For what it’s worth, reps for the TB12 Foundation assured the Daily Beast that no money from donations cover any expenses or salaries for TB12, Inc.)
As with Brady’s other “bad luck” this year, this kind of feels like more of the same. Tom took a shortcut to success, maybe even cheating — like, say, deflating a football in cold weather — and this is just the chickens coming home to roost for him. Or who knows, maybe he really is cursed?
What do YOU think of this latest Tom Brady scandal??
[Image via Patricia Schlein/WENN.]