BULLETIN: Prominent Football Coach And TV Commentator Jim Donnan Charged In Alleged $80 Million Ponzi Scheme
BULLETIN: The SEC has gone to federal court in Atlanta, alleging that Hall of Fame football coach Jim Donnan and a business partner in Ohio conducted a massive Ponzi scheme that sucked in other coaches and caused one of Donnan’s trusting former players to invest $800,000.
The scheme began in 2007 and collapsed in 2010, the SEC charged. Donnan is a former coach of the University of Georgia and Marshall University. He once worked as a commentator for the ESPN television network.
Charged along with Donnan, 67, was Gregory Crabtree, 50. Crabtree was an officer of a West Virginia entity known as GLC Limited, promoted as a wholesale liquidation business that bought leftover merchandise and sold it to discount retailers. Donnan was a GLC pitchman.
GLC also was known as “Global Liquidation Center,” the SEC said.
Investors were promised “exorbitant rates of return ranging from 50 [percent] to 380 percent” in a scheme that fetched $80 million, the SEC charged.
But only about $12 million of the $80 million went toward merchandise purchases, with the rest used to make Ponzi payments “or stolen for other uses by Donnan and Crabtree,” the SEC charged.
“Donnan and Crabtree convinced investors to pour millions of dollars into a purportedly unique and profitable business with huge potential and little risk,” said William P. Hicks, associate director of the SEC’s Atlanta Regional Office. “But they were merely pulling an old page out of the Ponzi scheme playbook, and the clock eventually ran out.”
One of Donnan’s former players, the SEC charged, plowed $800,000 into the scheme after Donnan told him, “Your Daddy is going to take care of you” and “if you weren’t my son, I wouldn’t be doing this for you.”
Donnan resides in Athens, Ga. Crabtree is a resident of Proctorville, Ohio.
Donnan conned at least one investor by telling him, “[Y]ou can’t lose your money; it’s already pumping oil,” the SEC charged.
And the former coach and commentator took care of himself first, the SEC charged.
“Donnan invested approximately $5.8 million in the scheme but paid himself back approximately $13.2 million from GLC investor funds,” the SEC charged. “After the scheme collapsed, Donnan used a small percentage of his profits, less than $900,000, to pay other investors.”
It has been a busy week for the SEC. The agency said yesterday that it had gone to federal court in Denver to halt a $15.7 million Ponzi scheme.
Charged in that alleged caper were Michael J. Turnock, 68, of Denver and William P. Sullivan II, 45, of Highlands Ranch, Colo.
Turnock and Sullivan were running a promissory-notes scam through a company known as Bridge Premium Finance LLC, the SEC said.
On Monday, the SEC charged Ivan Wade Brown, 45, of Alpine, Utah, and two of his companies: Highland Residential LLC and Avanti Capital Partners LLC.
That case alleges a $27 million Ponzi scheme and promissory-notes scam.