SEC Charges Former NFL Player and His Business Partner in $32 Million Ponzi Scheme Involving Loans to Professional Athletes

A federal court in Boston has unsealed a civil lawsuit filed earlier this month by the U.S. Securities and Exchange Commission (“SEC”) against a former professional football player and his business partner for allegedly defrauding at least 40 investors out of as much as $14 million, alleging the business partners operated a Ponzi scheme that bilked investors who were promised profits from loans to professional athletes.

According to the SEC’s lawsuit, former professional football player William (“Will”) D. Allen — a former first round draft pick who played in the NFL with the New York Giants, the Miami Dolphins, and the New England Patriots and who now resides in Davie, Florida — and his business partner, Susan C. Daub — a financial professional formerly of Acton, Massachusetts who now lives in Coral Springs, Florida — claimed to make loans to professional athletes who were short of cash in the off-season or early in the season.  Allen and Daub allegedly told investors that they could profit by funding the loans and receive interest of up to 18 percent paid by the athletes.  Under that framework, Allen and Daub raised nearly $32 million from investors while advancing only $18 million in loans to athletes.  From July 2012 through February 2015, the investment program paid $20 million to investors while receiving a little more than $13 million in loan repayments from athletes.  To fill the nearly $7 million gap, Allen and Daub used money from some investors to pay other investors — the hallmark of a Ponzi scheme.

In addition, Allen and Daub allegedly misled investors about the terms of some of the loans and, in one clear instance, purportedly falsified the existence of one of the loans.  According to the SEC, 24 of Allen and Daub’s investors collectively contributed nearly $6 million toward a purported loan to a National Hockey League player.  Although the player is real and the money was collected from the investors, no documentation corroborates that any such loan in that amount ever existed.  Allen and Daub are purported to have used some investor funds to pay personal expenses, such as charges at casinos, nightclubs, and pawn shops; or to fund other business ventures.

Along with Allen and Daub, the SEC has asserted several business entities (Florida-based Capital Financial Partners Enterprises LLC; Boston-based Capital Financial Partners LLC and Capital Financial Holdings LLC) violated federal anti-fraud laws as part of the scheme; and the SEC has also named in its Complaint several relief defendants (WJBA Investments LLC, Insurance Depot of America LLC, Simplified Health Solutions LLC, and Simplified Health Solutions 2 LLC) from whom the SEC seeks to recoup allegedly ill-gotten gains with interest.  The Court has already issued an asset freeze and other preliminary relief against the defendants in an effort to bring a swift and just resolution to the SEC’s case.

Silver Law Group has successfully recovered multi-million dollar awards for its clients in a wide variety of investment fraud cases throughout the country and abroad.  In recognition of its work, Silver Law Group was named in 2014 the Commodities Law Firm of the Year by Finance Monthly magazine, an award that “reflect[s] the very best of those professionals working in or within the finance industry today.”  If you have questions about your legal rights, or have been the victim of investment fraud, contact Scott L. Silver to discuss your legal matter in a free consultation.  CONTACT: Silver Law Group, 11780 W. Sample Road, Coral Springs, FL 33065; Telephone: (800) 975-4345 (Toll Free); Web site: www.silverlaw.com; E-mail: ssilver@silverlaw.com.