Federal regulators have filed civil fraud charges against former NFL cornerback Will Allen and his business partner, accusing them of reaping more than $31 million in a Ponzi scheme that promised high returns to investors from funding loans to cash-strapped pro athletes.
The Securities and Exchange Commission announced the charges Monday against William D. Allen, Susan Daub and their investment firms.
The SEC said Allen and Daub paid about $20 million to investors but received only around $13 million in loan repayments from athletes. To make up the gap they paid investors with other investors' money rather than actual profits on the investments, in a classic Ponzi scheme, the agency said.
“The defendants sold investors on the idea of lending money to pro athletes, but we allege that’s not where a large portion of the investors’ money went. As in any Ponzi scheme, the appearance of a successful investment was only an illusion sustained by lies,” said Paul G. Levenson, Director of the SEC’s Boston Regional Office.
Allen couldn't be reached for comment. A person answering the phone at Daub's home said there was no comment.
-- The Associated Press