The Securities and Exchange Commission has charged former NFL cornerback Will D. Allen and a partner with fraud and frozen their assets after uncovering a Ponzi scheme that raised $31 million from at least 40 investors but only paid out some $20 million.
Allen, who played for the New York Giants, Miami Dolphins and New England Patriots, co-owned Capital Financial Partners, which made loans of roughly $18 million to pro athletes who were short of cash (during the off seasons) between July 2012 and February 2015.
"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, in a statement.
The SEC states that Allen and Susan Daub, a financial professional, advanced about $18 million to athletes while raising over $31 million from investors. The pair "allegedly misled investors about the terms, circumstances, and even the existence of some of the loans and used some investor funds to pay personal expenses, such as charges at casinos and nightclubs, or to fund other business ventures."
According to the Financial Industry Regulatory Authority's BrokerCheck, Daub has been affiliated with a number of broker-dealers since passing the Series 6 exam in 1995 and the Series 63 test in 1996, though she has not been registered with a firm since 2010: Morgan Keegan (2007-2010), Tower Square Securities (2005-2007 and 2003-2004), Rampart Financial Services (2004-2005), Investors Capital (2000-2003), Centennial Capital Management (1999-2000) and Princor Financial Services (1995-1999).
The Giants drafted Allen in the first round out of Syracuse University in 2001. He was lured away with a four-year, $12 million contract by the Dolphins in 2006 and signed an extension for $16 million in 2009. He was arrested for driving while intoxicated in early 2010, and the Dolphins ended his playing contract with the team in September 2011. He then signed with the Patriots in 2012 and left the NFL in 2013.
Investor Scheme
