Former NFL coach, player are victims in an alleged ponzi scheme

by Michael Tarsala

Former Dallas Cowboys Super Bowl-winning coach Barry Switzer is among the alleged victims of a ponzi scheme run by Hall of Fame football coach Jim Donnan.

Donnan and partner Gregory L. Crabtree are accused of cheating investors – many of them former players including linebacker Kendrell Bell who played for the Pittsburgh Steelers – collectively out of $80 million.

Football fans may remember that Donnan helped put Marshall University on the football map in the 1990s, winning the NCAA Division 1-AA National title in 1992. He also coached at Georgia from 1996 to 2000, compiling a career record of 104 wins, 40 losses. He was inducted into the College Football Hall of Fame in 2009, and in recent years worked as a college football analyst for ESPN.

Donnan and his partner Crabtree reportedly raised money from about 100 investors in a business that bought leftover merchandise from retailers and sold it at a profit to discount stores. Investors were allegedly promised returns of 50 to 380%.

Instead, regulators say Donnan pocketed $7.4 million for himself; only $12 million was used to buy merchandise. The rest was used to pay off earlier investors in the venture.

“Donnan and Crabtree convinced investors to pour millions of dollars into a purportedly unique and profitable business with huge potential and little risk,” William P. Hicks, associate director of the S.E.C.’s Atlanta office, said in a press statement. “But they were merely pulling an old page out of the ponzi scheme playbook, and the clock eventually ran out.”

Frauds of all sorts — not just ones targeting athletes — are preying on a growing number of investors, says Pat Huddleston, former SEC enforcer and author of The Vigilant Investor.

The FTC has reported more than 1.5 million fraud complaints, up 62% in three years. He says the upward trend will likely continue, and sees potential for another giant Bernie Madoff-like scam.

Huddleston says that if returns seem too good to be true, that is likely the case.

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Photo by: Jory’z Shotz

  • Uriah School

    Hardly a surprise–this is the guy who took the rule buster Moss when FSU kicked him out.

  • http://profile.yahoo.com/XEHX63TEQMXXXT46KLWYZAGHDY John

    W@hy on earth would a football player, coach or assistant invest in something they have no experience.

    • http://www.facebook.com/A.V.Turk Albert V. Turk

      Because being a successful coach or player does not make you “smart”.

      • Malaprop

        Apparently not the coach’s opinion of themselves.

  • http://www.facebook.com/eddie.kostlevy Eddie Kostlevy

    these con men befriend the victims.there is to much of this and little punishment or restitution.it is very difficult for the victims to report these crimes.

    • Lexi

      AMEN!  My son-in-law/daughter personally lost $380,000, along with 5 others who also got conned.  What happened the main con got a lousy 5 yrs and the title company manger who was moving the funds day after deposted (without required 6 signatures) got 3.  FTC is doing “nothing” to these folks and that’s why it continues to rise.  Side note: yes my relatives considered this person to be a VERY good friend.  That sucks also; so can you trust – a perfect stranger?

  • Uncle Billy

    A Hall of Fame Coach defrauds fellow coaches and players. They thought of him as a “good guy’ without bothering to collect any information about the investments recommended. An old story of knowing someone casually and then making unwarranted assumptions about general character. Here we may reference Bernie Madoff and a host of others.

  • It’s Me

     
    Some days you are the “savvy shopper” dog, but one day you WILL be the fire hydrant, no matter how you look at it.  One mans liberty ends where another’s begins!

  • C Anthony

    GREED!!!

  • Fairtax2012

    We are all victims of the Ponzu Scheme known as Social Security

    • Dr. B.

      Ponzu is a Japanese sauce; Ponzi was the 1920s crook who invented the fraudulent investment operation thatbears his name. Social Security is NOT a Ponzi scheme. Without ANY changes it can meet 75% of its obligations in the year 2065. Here’s some advice: Stop watching Fox News!

      • joe

        so your a supporter and you acknowledge it will not even cover itself in 50 years. I do not know what the percentage is know but unless something is done it will not be going strong, not enough workers to support those being paid.

        • Malaprop

          SS is fine. Its what they do with the SS money to prop up all that other stuff in government that is a problem. You drink too much koolaid.
          You are coorect abou tthe lack of jobs though. But that is hardly the problem for SS. You only collect when you pay in, so less workers, less future collectors. As well as less paying in.