SEC Charges College Football Hall of Fame Coach Jim Donnan with Running $80M Ponzi Scheme
College Football Hall of Fame inductee and former University of Georgia head coach Jim Donnan and his Ohio business partner, Gregory Crabtree, ran a three-year-long, $80 million Ponzi scheme that targeted college coaches, former players, and other investors, said the SEC in a civil complaint filed in Atlanta. Regulators say approximately 100 victims were defrauded in the alleged investment scheme.
According to the Complaint, Donnan and Crabtree solicited investments in GLC Limited, a purported West Virginia-based wholesale liquidation company, by telling potential investors that the company was able to earn "substantial profits" by purchasing leftover merchandise from major retailers and then reselling the items to discount stores.
Investors were allegedly promised returns of up to 380 percent within 2 to 12 months.
The SEC claims that Donnan recruited the majority of investors from contacts he made over the course of his career. In one instance, for example, he allegedly used his influence over his former players to convince one man to invest $800,000 in the scheme. “Your Daddy is going to take care of you,” Donnan allegedly told the man. “If you weren’t my son, I wouldn’t be doing this for you.”
Authorities say Donnan and Crabtree used only about $12 million of the $80 million they raised to purchase liquidated items as promised. The remainder was allegedly used for the men’s own purposes and to pay fake returns to earlier investors in the scheme.
“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.”