Will Allen, Former NFL Player, Charged for Role in Ponzi Scheme
Professional athletes and other high-income, high-profile individuals rely on financial advisors and other professionals to responsibly invest their income. But occasionally, financial professionals betray the trust of their clients and investors and make financially unsound decisions or worse – pocket investment funds for themselves.
Such is the case of Will Allen, a former National Football League player for the Miami Dolphins, along with his associate Susan Daub, a former bank executive. Allen played his last game in the NFL in 2011, and did not continue the following year due to injuries. Meanwhile, Daub was a financial professional in New England. Both were arrested in June in Fort Lauderdale, Florida, and indicted in a federal court in Massachusetts in July.
Defrauding Athletes
Allen is accused of fraudulently convincing investors to finance high-interest loans to professional athletes. Athletes, though they make large profits during their playing seasons, often need short-term loans in order to maintain their finances and investments during the off-season when they are not getting game checks. However, after receiving the capital from their investors, Daub and Allen did not use it to make short-term loans. Instead, they used the funds to repay debts lower down on their Ponzi pyramid, and in doing so, continued to make a profit for themselves that numbered in the millions of dollars. To profit, the defendants promised high returns to investors, used investors’ money to pay previous investors, and pocketed the excess funds, simply waiting for the cash flow to cease (at which point the scheme would collapse).
Daub and Allen raised over thirty-one million dollars through defrauding the investors in this manner. However, just a little more than half made it back to any athletes. The remaining flowed into Daub and Allen’s Ponzi scheme as well as their own pockets.
The investigations of Daub and Allen began back in April, when the Securities and Exchange Commission announced that they would be proceeding with charging Allen and Daub with fraud. The Securities and Exchange Commission contended that the defendants made misleading statements to investors regarding the use of their capital, and that they used investors’ contributions to pay for personal expenses like partying expenses at nightclubs and bars, as well as to pay for gambling.
Could You Be a Victim?
As mentioned above, many investors, including high-profile professionals, must put their trust and finances in the hands of a financial professional or advisor. While it is easy to believe that your investment professionals have your best interests at heart and would never take advantage of your capital, the truth is that indiscretions and fraud among investment professionals can and do happen. Allen and Daub’s Ponzi scheme is just one example of this type of fraudulent activity and misconduct. If you believe that your money may be at risk, you may need the assistance of a qualified investment and financial attorney with experience representing victims of financial betrayal. You can contact an experienced investment and financial attorney at Carlson & Associates, P.A. in Miami at 1-305-372-9700 today for a consultation.