The Securities and Exchange Commission (“SEC”) has charged College Football Hall of Fame coach Jim Donnan and his business partner, Gregory Crabtree, with running an $80 million dollar Ponzi scheme. Donnan was a head football coach at Marshall University from 1990 through 1995 and at the University of Georgia from 1996 through 2000. Later, Donnan became a college football analyst for ESPN. In 2009, Donnan was inducted into the College Football Hall of Fame as a coach.
According to the Complaint filed in Atlanta, Georgia, between 2007 and 2010, Donnan and his partner Crabtree, an Ohio resident, convinced approximately 100 investors, mostly other college coaches and former players, to invest nearly $80 million in their West Virginia-based company GLC Ltd. The SEC alleges that Donnan and Crabtree told investors that GLC was a wholesale liquidator that purchased surplus merchandise from major retail stores and then re-sold the merchandise to discount retailers at a profit. The Complaint alleges that the pair promised investors returns in the range of 50% to 380% for short-term investments lasting only 2 to 12 months.
The SEC alleges that only $12 million of the $80 million was used to purchase merchandise while the remainder was used to pay earlier investors or was misappropriated by Donnan and Crabtree for personal use. According to the SEC, much of the merchandise that was purchased by GLC was left abandoned in warehouses in Ohio and West Virginia.
The Complaint charges Donnan and Crabtree with fraud and violations of the federal securities laws and seeks civil penalties, the return of ill-gotten gains and interest.
Investors nationwide who have been the victims of a Ponzi scheme, may contact the Florida securities arbitration lawyers at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or by e-mail to email@example.com.