Jim Donnan charged in Ponzi scheme
ATLANTA -- Former Georgia football coach Jim Donnan is accused of orchestrating an $80 million Ponzi scheme, using his own prominence to get high-profile college coaches and former players to invest, the U.S. Securities and Exchange Commission said Thursday.
Donnan and business partner Gregory Crabtree, of Proctorville, Ohio, convinced investors to pour millions of dollars into a business they said was unique and profitable with huge potential and little risk, said William P. Hicks, associate director of the SEC's Atlanta office.
Donnan and Crabtree sold investments in West Virginia-based retail liquidation company GLC Limited and promised high rates of return that didn't materialize, federal regulators said. The pair raised about $80 million from nearly 100 investors, but only about $12 million of that was used to buy merchandise for liquidation, the SEC said.
The SEC's complaint charges Donnan and Crabtree with violating federal securities laws.
A lawyer for Donnan did not immediately return a phone call and email message seeking comment. A lawyer for Crabtree did not immediately return a phone call.
Donnan's attorney has previously acknowledged the former coach was paid lucrative commissions, but he said Donnan believed he was being paid from legitimate profits earned by the company.
Donnan was the coach at Marshall University from 1990 through 1995 and at Georgia from 1996-2000 and later became an ESPN analyst.
Among the coaches Donnan helped attract were Texas State football coach Dennis Franchione; Virginia Tech football coach Frank Beamer; ex-Dallas Cowboys coach Barry Switzer and Texas Tech football coach Tommy Tuberville.
Copyright 2012 by The Associated Press