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Apr 12

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Pro-Athlete Lending Firm is an Alleged Ponzi Scheme

A Florida based financial advisory involved in professional athlete lending has been charged with defrauding its clients. On April 7th the Securities and Exchange Commission (“SEC”) charged William D. Allen and his business partner Susan C. Daub with running a Ponzi scheme which promised investors 18% returns, however a sizable portion of these “returns” were allegedly paid out of new investor funds.

Allen was himself a former pro football player who during his career played for the New York Giants and Miami Dolphins, and was signed to the New England Patriots just before retiring due to an injury in 2013. The investment product he and his business partner marketed consisted of a fund that made loans to professional athletes, which would garner high interest rates for Allen’s firm, and thus provide high return back to investors.

All told, the scheme brought in $31 million of investments and returned $20 million to investors, while providing $18 million in loans to athletes in the NHL, MBL, and NFL and receiving only $13 million in athlete repayments.  This related article on the notable ponzi scheme associated with Bernie Madoff provides a description of ponzi schemes, as well as steps to avoid them.

 

About the author

Devin Yaeger

Devin Yaeger is a consultant at Fulcrum Inquiry, an accounting, finance and economic consulting firm specializing in complex litigation, forensic investigations and appraisal issues across a broad spectrum of industries.

Permanent link to this article: http://betweenthenumbers.net/2015/04/pro-athlete-lending-firm-is-an-alleged-ponzi-scheme/

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