ATLANTA — Former Marshall University and University of Georgia football coach Jim Donnan is accused of orchestrating an $80 million Ponzi scheme, using his influence 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.
The West Virginia-based liquidation company, GLC Limited, would buy appliances and furniture for resale, promising 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 while the remainder was used to pay false returns to earlier investors or was spent by Donnan and Crabtree, the SEC said.
Donnan also funneled large sums to two of his adult children and a son-in-law, and regulators are seeking to recover at least some of that money, 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 head football coach at Marshall University from 1990 through 1995 and at the University of Georgia from 1996 through 2000 and later became an ESPN analyst.