Feds Charge Former Giant Will Allen With Ponzi Fraud
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.
http://www.nbcnews.com/business/business-news/feds-charge-former-giant-will-allen-ponzi-fraud-n337366
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