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The U.N. Office on Drugs and Crimes estimates that annual illicit proceeds total more than $2 trillion globally. Proceeds of crime generated in the United States were estimated to total approximately $300 billion in 2010 or about 2% of the overall U.S. economy. As history would remind us and amidst the COVID-19 pandemic, crisis creates extreme vulnerability to fraud and financial crime across our global financial systems.
The ExCo vs. The Status Quo brings together like-minded individuals and brands to illuminate the innovative actions companies are taking to make a bigger impact. This diverse community of industry leaders are building the conversation around what’s working, what’s not, and how to make things better – together – through a shared commitment towards a common goal.
Courtney Altemus is the Founder and CEO of Team Altemus. Team Altemus helps athletes navigate the complexities that come with the big and fast financial changes associated with athletic success. Courtney and her team’s unwavering commitment to arming student athletes with unbiased guidance to take control of their financial futures while keeping focused on their academic and athletic success is gaining overwhelming attention by collegiate programs and athletes alike.
Why did Team Altemus wanted to get involved with this campaign and what does making the world a safer place to do business means to you?
Courtney Altemus, Founder & CEO at Altemus: I was on Wall Street for a few decades, and a small part of my client base was always professional athletes.Over time I realized that I had a bigger impact on their lives than many other ultra-wealthy individuals and part of it was that I had started working with them when they were younger and taught them what risk was. I taught them about doing due diligence. I taught them about analyzing risk reward and investing. The rest of the world doesn’t necessarily do that all the time; they just try to sell. It’s very transaction-oriented and that’s certainly not a safe way to approach business.
I decided to leave Wall Street and release my licenses so I could bring that expertise, be completely unbiased and try to help athletes. I mean really this applies to everybody, our entire world but athletes need it and it is all about making the world a safer place to do business. I used to joke I’m going to save the world one professional athlete at a time.
I used to joke I’m going to save the world one professional athlete at a time.
Because of our intense focus on these people as our heroes, our next generation paying attention to every move. There were too many bad stories out there and I felt like we needed to change that. Our motto is “athletes and money only positive stories”. Rather than coming at them with the scare tactics, let’s give them tools to make better decisions to empower them to understand and make it safer to do business.
Rather than coming at them with the scare tactics, let’s give them tools to make better decisions to empower them to understand and make it safer to do business.
We’re in the middle of a massive sea change for college athletes right now. Can you talk a little bit about what’s going on and what it means for Team Altemus?
CA: College athletes have historically been considered amateurs and unable to be paid for play, name, image and likeness. NCAA made a massive shift in October of 2019 and announced that student athletes will be able to accept compensation and are likely to roll out on July one.
As experts in the field and having worked with athletes, both at the professional level and the collegiate level, we immediately knew that this was either the most incredible opportunity that’s ever going to come to these young people in their lives or it’s going to be a colossal failure. It’s where we’re going with “athletes and money only positive stories”, so we started diving in right away with education. We’ve been using Exiger’s DDIQ for professional athletes for a few years prior to this and now we’re faced with a big challenge because the NCAA waited so long to make changes. It used to be that the value of a college scholarship was a valid argument; a fair value in exchange for their athletic ability, but the TV contracts got so massive overtime, it no longer was a valid argument. We don’t even know if a college degree makes enough impact on our long-term earnings to make that argument anymore.
You have college football season producing $500 million in TV revenues and the March Madness men’s basketball tournament makes $1 billion for three weeks out of the year. 40 college coaches in 40 out of 50 states are the highest paid employees in the state. So it became impossible to continue to deny these rights, but because it took so long, we’ve had this conflict of opinions and legislation with what this is going to look like. Our message has been that we know what the student athletes need no matter what the regulations are. They need education, they need due diligence and they need tools.
Our message has been that we know what the student athletes need no matter what the regulations are. They need education, they need due diligence and they need tools.
Now we’re in a situation where the NCAA opted not to vote on their proposed legislative concepts four states have passed state laws to go live July 1st. The NCAA may or may not come out with a decision on regulations in June. There have been at least six federal bills introduced and it’s looking more and more like we will ultimately have federal legislation governing this, which is incredibly interesting for many reasons, not the least of which is that there’s a massive antitrust element focused on how athletes have been treated in the past and how they’ll be able to operate in this new world going forward. We knew right away all of the decisions professional athletes regularly face are going to hit 450,000 17 – 21 year olds on the same day at the same time for the first time in history. We know from experience, they don’t have the tools. It has nothing to do with their education level or how they were brought up, they just don’t have the tools. They just happen to be athletes who have two full time jobs: student and athlete.
Can you talk about the vulnerabilities that present themselves to student athletes as they move toward more opportunities to commercialize their name, image and likeness?
CA: Well, if you think about the reason I started the business. I saw a need. I had the anecdotal evidence of my existing clients and I saw what they weren’t getting. I figured out that I could not deliver it to them in my position because I was, by definition, biased, because I was selling an investment product at the time.
I knew there was a need for professional athletes and I was so fortunate to have had a long standing professional relationship with Michael Bieber. I’ve known Michael for so long and known the amazing things he’s done in the risk management world. I didn’t know that there was even the hint of a tool that could be used by individuals. I have now recognized that I’m in this unique position to provide guidance in risk management, and I know what happens with these athletes from a professional level. There’s so much they don’t know and that’s why I started the business. We now have a massive group of younger people who definitely don’t know that there’s a tool out there and don’t know that there’s the term due diligence, so we talked to them. Some of them in their finance class know it from doing due diligence on companies.
41% of NFL players from 2012 to 2017 reported economic fraud. Those people are adults, they have experts around them, they have resources on their teams. College athletic departments are not equipped for that, nor should they be. That’s not what they were built to do. So, knowing what I know about sports, knowing what I know about risk and having spent all that time in a highly regulated industry, we tried to first educate the schools on how vulnerable their student athletes are. The schools and the NCAA identified the risk of professional service providers but they don’t even really understand the full extent of that. We knew right away that we had to educate people on how dangerous this is.
We knew right away that we had to educate people on how dangerous this is.
Any of those college athletes that were considered elite, meaning potentially going to the Olympics or entering a draft process, we would talk to them about tools they needed to employ when it’s your senior season. That’s when one can expect an onslaught of calls from agents, advisors, marketing reps, insurance sales people. They will be hounding and and telling them that they need to hire them as soon as they are no longer playing for the school. But they often have no time to talk to any of them during that last season because it will take time away from your ability to focus on their craft as well as what’s going on in the classroom.
And if you think about it, it gets exponentially more dangerous because so many of these athletes are planning on building personal brands around their status as student athlete. If they don’t know to expect the onslaught of calls, they’re quickly going to be distracted from being a student and an athlete. They may build an incredible brand only for it to last for two weeks because they may no longer be eligible to play. That’s just the tip of the iceberg that doesn’t even get into once you set up a management system to manage all these incoming inquiries. Once you’ve done due diligence and gone through an unfamiliar process of choosing people to surround them, there’s this whole other world that’s the more important: monitoring. It’s hard to overemphasize how dangerous it is but we’re getting everybody up to speed as much as we can.
It seems like the collegiate sports industry has somehow dodged an appropriate level of scrutiny. How do you see that changing?
CA: The reason they’ve been able to dodge that scrutiny is because they’ve been able to consider student athletes amateurs, so they were buffered from industry regulation in a way that we traditionally think about it. They’re highly regulated in terms of tracking all the rules and regulations, as well as making sure that the student athletes stay eligible to play.
If you just took the antitrust laws and applied them to college athletics you don’t have to get more than a paragraph in before you are able to make an argument for shutting it all down. That’s how they’ve been able to avoid regulation from a governmental standpoint but now we have new rules and we’ve got four States ready to go live on July, 1 with state laws. They can’t have individual state laws because then they’ll have schools trying to compete for recruits so they want one unified law which means Congressional involvement. As you can imagine, there’s probably six or seven bills which are mostly bipartisan.
Everyone is in the same place about what needs to change, but now you have people weighing in that this should be a pure free market. They should be able to be paid to play and they should be employees of the institution; no pay for play just pay for name, image and likeness. What does that look like on the spectrum of regulations? My guess is they are going to be closer to a hybrid amateurism model that isn’t pay for play, but being compensated for name, image and likeness. Over time, that will evolve and we’ll see more regulations. So it will be a slow evolution, but it will become increasingly prevalent.
If you were to talk to a college compliance person and athletic department, these poor people don’t have time to sleep. They are highly regulated but they don’t really move outside their world which is focused on something entirely different.
We’re very grateful for the partnership between Team Altemus and Exiger’s DDIQ today. As part of your risk management process and as part of your solution set that you extend to both college programs and your student athletes, can you talk about the role it plays in your mission to empower athletes at all levels with information and tools, so they can be victorious financially?
CA: One of the coolest things we do with DDIQ in order to educate athletes is show them how to run a profile on service providers – agents, etc. – they are considering partnering with and assess their risk. I like to say if you’re reading about fraud on a public database somewhere then it’s probably too late so we have to look for fraud. We’ll try to find as much as we can that could indicate fraud could happen in the future. I start with the basics like looking at the number of LLC’s they’re involved with, then we check Open Corporates to you know how those LLC’s are managing money every day, as well as their partners. They may all be perfectly fine from a regulatory perspective and approved outside business activities with their brokerage or their financial institution, but we need to dig into that. Because if they’re involved in 10 other situations, then we need to find out what they are and how much time they’re spending on them because, at a minimum, they may not have the time needed to dedicate to serve their athlete appropriately.
It’s so rewarding to watch these athletes learn.They start learning context and realize it’s okay to ask people – potential business partners – follow up questions because, at the end of the day, there are 600,000 more of them. So if they don’t answer the right questions the right way, they can go move on to the next potential business partner.
It’s so rewarding to watch these athletes learn.
The other thing I like to do is teach them about monitoring. They’re clueless about monitoring but 90% of those awful athlete money stories can be traced back to a relationship that started really great and evolved into a bad relationship over time.That advisor can start to feel like they’re pretty smart since they’ve been in the middle of bull market and their athletes are coming back and saying that they heard about this or that in the locker. They start sort of winding into direct investments which, from regulatory standpoint, they’re not really supposed to do.
They’re clueless about monitoring but 90% of those awful athlete money stories can be traced back to a relationship that started really great and evolved into a bad relationship over time.
I’ve done a ton of back testing with DDIQ with public situations, with people who are now in jail five years before it came to light. When looking at an ongoing monitoring report we’re not going to say “Oh, my goodness, you have to fire this person”, but we’re going to say that’s a red flag and you need to ask questions such as, at a minimum, how much time is that lawsuit taking up.
I ran a DDIQ on, ironically, one of my former colleagues who one of my clients wanted to work with because I have to be completely objective. I can’t just say that person is okay because I know them. I’ve known for 20 years that I need to do the exact same due diligence. Low and behold, I run a report he’s on CNBC all the time, and he and his wife were both arrested because, allegedly, he was with his girlfriend . . . very chaotic, privileged world drama. That’s not fraud and he could probably do this job just fine, but what it points to is that this is what’s going on in his life and the kind of choices he is making. That piece of it is so powerful to me and not even something I anticipated when we first started using the tool. It’s another reason I’m so passionate that we need to get it into the hands of student athletes because they need to learn a whole new system and a way of thinking. I want this to become an industry standard.
they need to learn a whole new system and a way of thinking. I want this to become an industry standard.
I love how you are using DDIQ as a teaching tool. This idea of helping others develop the stamina it takes to look, the patience to inquire, and the courage to speak up. It sounds to me like DDIQ plays a pretty important role in your process, your firm, and your work. What’s at stake for the athletes you are partnering with?
CA: Well, no pressure, but it’s usually directly correlated to people losing money. Now I’m half joking, because I have to say I have not had a situation where Exiger has messed up. I always start with saying that this is not a background check this is going to be an aggregation and filtering of an organization as if nobody else has public information. It’s not going in and checking to make sure that that information is verified, it’s using AI and these risk management tools to verify it against other factors.
One needs to take ownership and accountability, so I think part of my responsibility is to teach them that. Giving them the message that they have to take ownership and the tools to do it because . . . it is their money, their life.
Giving them the message that they have to take ownership and the tools to do it because . . . it is their money, their life.
As we grow into this collegiate space, the quantity of reports is going to grow exponentially, so I think the next challenge will be more around talking to the Altemus team. We’re going to automate as much as possible, but when somebody flagged something for manual intervention or protocol, then you there will be a new processes. We’re going to take time to move through the way I approach it, which is to step back and say “Okay, what are the commonalities that transcend every single athlete and every single school that we can apply technology to?” The technology isn’t going to be any good unless we know how to use it, know how to interpret it . . . so that’s baseline.As the need for manual intervention comes up, having the right team in place to know exactly what we want to accomplish and whether we can use technology for it will be important. I guess what I’m saying is that we (Team Altemus) expect things to get more complex.
The technology isn’t going to be any good unless we know how to use it, know how to interpret it . . . so that’s baseline.
How do you see technology continuing to evolve? What is the opportunity for the sports industry to use it to protect its most valuable asset: its athletes?
CA: Coincident with what’s happening in the college sports space, we now have sports betting at an all-time high. I think there are 20 plus states that have passed a law that[CA2] went to Supreme Court reverse three or so years ago. We now have stadiums starting to allow in-game betting so people are on their phones. It’s not just about win or loss any more, it’s about how many yards the quarterbacks are going to throw and how many interceptions.
Everything is happening so fast. We have technology and companies that are solely devoted to monitoring the integrity of the gambling data and also making sure that student athletes are not engaging because they’re not allowed to. It’s growing at such a massive pace. It was just announced that Trevor Lawrence who was the number one pick in the NFL draft signed a deal in crypto to be paid and crypto went into his bit whatever account. We can’t manually keep that under control, which is all the more reason it’s so important to start here. I think over time that new partnerships will unfold between technology partners to meet the growing need in this space. We just had the first sports betting 24 hour TV channel get acquired for a ridiculous amount of money and those are the things that aren’t necessarily being paid attention to. You kind of hear it and that’s so exciting but the growth in e-sports and the fact that colleges have e-sports teams and you can get a scholarship for video games. Technology is going to play an increasing role, and one that I think is even bigger than I can fathom.
Technology is going to play an increasing role, and one that I think is even bigger than I can fathom.
You worked on Wall Street and in the sports community your entire career … what do you see as the biggest or most persistent challenge facing those industries today?
CA: I think that regulations are always going to be tough because it’s so hard to stay in compliance. The cost of setting up new guardrails and new systems to monitor compliance is astronomical. I think that, as much as the financial world is used to that, it still doesn’t make it easier when a new bill is passed that requires more information from potential clients. I was sort of in the thick of it when those things started coming to light. One of the things that I think we don’t give ourselves enough credit for is acknowledging that we don’t know what we don’t know. That’s the commonality between even the most brilliant person on Wall Street who has the most experience in the world if a new bill comes down the Pike.
One of the things that I think we don’t give ourselves enough credit for is acknowledging that we don’t know what we don’t know. That’s the commonality between even the most brilliant person on Wall Street who has the most experience in the world if a new bill comes down the Pike.
With young athletes, I can tell you from my experience, they have no clue what they don’t know and they’re in a unique situation. It’s all well and great to say that they need to take time to make sure that they are financially literate or have the right team around them, but if they take their eye off the proper nutrition, rest and training, somebody’s going to take their position and they’re financial circumstances will change quickly because of that. It’s similar to Doctors that are notoriously not great with money. There are only so many hours in a day and to become an expert in your field, you have to be very deliberate and disciplined about how you spend those hours.
I see it as exciting challenge to educate and empower as many athletes as possible but it is a little scary. It is estimated that 41% of NFL players have lost in aggregate a half a billion dollars due to fraud. This is probably an incredibly low estimate because it’s so hard to track. Athletes aren’t aware of how much of a target they are for predatory fraudulent behavior.
Athletes aren’t aware of how much of a target they are for predatory fraudulent behavior.
41% of NFL players, 22% of professional basketball players, 15% of major league baseball players, 10% of hockey players and then followed by running, boxing and soccer, all had at least enough fraud to report between 2% and 5% during that timeframe. Now keep in mind, these are professional adults who have the resources and at least some experience in making decisions, and we know those numbers are low. Even the athletic departments at some of the best academic institutions in the country don’t have that real world experience, hence my mission to save the world one professional athlete.
Even the athletic departments at some of the best academic institutions in the country don’t have that real world experience, hence my mission to save the world one professional athlete.
Courtney, you’re so passionate about the work you do and unstoppable in your pursuit. If there’s one legacy you can leave behind in your career around making the world a safer place to do business, what is it?
CA: It is what we call the formula for success. It’s going to sound kind of common and silly when I say it, but we teach through experiential learning. We teach them to apply a familiar process to different parts of their life . . . money, contracts, whatever it is that they need to prepare for. It’s a basic process we call strategize, innovate, execute.Before you do anything, if you’re an athlete and you’re getting ready for a game, you have to strategize, you have to have a plan, you’re studying your own playbook, you’re studying film for hours, so that you know exactly what that opponent is likely to do in certain situations . . . and then you execute. It’s a process that comes naturally to most athletes but we’re helping them learn to apply it to a different set of challenges.
strategize, innovate, execute.
We all know that plans never go according to plan so you have to innovate.Everybody wants to innovate and to us, that means do something you’re doing already . . . differently. You adjust and then you execute. You can have the best plans on paper, but if you don’t execute it doesn’t mean anything. Not only is that process common sense but it also encourages people to slow down. I think that the pace of our world and the pressure from social media, especially on underdeveloped brains, has suppressed the important need to take a breath. I don’t mean we go meditate, I mean take a breath and consider what’s going on. Identify the problems and adjust when you need. That would be my legacy message. It sounds really simple, but it works if you practice it.
We all know that plans never go according to plan so you have to innovate.
Rapid Fire Round with Courtney
- Favorite Places to Travel: Upper Saranac Lake in the Adirondacks
- Favorite Food: I wish I could give you something really sophisticated but if I could have ice cream for dinner, I would.
- Favorite Show to Binge: I’m biased because my son is an actor and he’s in Grand Army on Netflix! I also binged Big Little Lies.
- Favorite Book: Keith Richards’ Life. It’s a great human story and a great story about somebody who could easily be dismissed as just a rowdy rocker who did drugs.
- Favorite Band/Singer: Bruce Springsteen. I’m embarrassed to say I’ve lost count of how many shows I’ve been to it’s a religious experience for me.
