Former cornerback Will Allen accused of running a Ponzi scheme
New York, NY.- Former cornerback Will Allen has been accused by the Securities and Exchange Commission of running a Ponzi scheme.
From 2001 to 2013, Allen played for the Miami Dolphins, the New York Giants, and the New England Patriots. Now, he is standing trial for using his sports connections as bait to raise money for an alleged Ponzi scheme.
Allen told investors that he could earn interest rates up to 18% by giving out short-term loans to players in the NFL, MLB, and NBA. According to CNN, Allen raised millions because he convinced investors that athletes needed short-term loans since their contracts would not allow them to access cash in the off-season or in pre-season, which is when they sometimes need to purchase a home or vehicle.
According to the SEC, Allen worked with his business partner Susan Daub to raise the money. Allen and Daub’s company, Capital Financial, raised a total of $31 million and they allegedly paid out $20 million to investors between July 2012 and February 2015. Yet, the SEC says that the defendants didn’t lend all the money to professional athletes as promised.
When the firm fell short of $7 million, Allen and Daub used money from some investors to repay others. The ensued Ponzi scheme will now be costing investors a lot. Daub and Allen allegedly used company funds for personal, non-business expenses as well. Company credit cards were used in casinos, cigar shops, jewelers, pawn shops, clothing retailers, and grocery stores.
At this time, the SEC says a federal court in Boston has seized the assets of Capital Financial and the agency is now seeking the return of the gains with interest.