Over the last few weeks, the majority of National Football League news coverage has been dedicated to covering the draft, which was held in Chicago just last night.
While the majority of coverage over the next few weeks will, of course, focus on breaking down the draft picks of all 32 teams, it’s important not to overlook a recent football-related story here in Florida that doesn’t involve the NFL, but rather the SEC.
Earlier this month, Will Allen — a former cornerback with several teams, including the Miami Dolphins — and his business associate were accused by the Securities and Exchange Commission of operating a Ponzi scheme that cost investors millions.
Specifically, the complaint alleges that Allen and his partner violated both SEC anti-fraud rules and federal anti-fraud laws through their business venture Capital Financial Partners, which was pitched as an outfit that would make loans to professional athletes with profits being secured through high-interest rates and financing costs. In total, it raised $31 million from investors.
The complaint goes on to state that while roughly $20 million dollars was paid to investors by Capital Financial Partners from July 2012 to February 2015, it only took in $13 million in loan repayments. Here, the SEC claims that the additional $7 million was covered by illegally using funds from some investors to pay others.
In addition to allegedly running this Ponzi scheme, Allen and his business partner are also accused of misspending a substantial sum of investor’s money to fund everything from nightclub bills to casino trips.
“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,” said the SEC in a statement. “As in any Ponzi scheme, the appearance of a successful investment was only an illusion sustained by lies.”
Having successfully frozen the assets of Capital Financial Partners, the SEC is now seeking an injunction prohibiting Allen and his partner from engaging in further illegal acts, and ordering the payment of civil fines and the return of investor’s money plus interest.
Stay tuned for updates on this important case …