RETRACTION & CORRECTION: The previous version of this article erroneously contained and exhibited a picture of Mr. Will Allen, a professional football player and current free agent of the NFL. Mr. Will Allen should not be confused or mistaken with Will D. Allen (an ex-NFL player) - the individual charged by the SEC and current focus of this article. Thus, Mr. Will Allen has nothing to do with recent charges filed against Will D. Allen as they are two separate and different individuals. Mr. Will Allen is involved with the Will Allen Foundation which provides outreach programs to students in Florida, Pennsylvania, and Ohio.
The previous version of this article incorrectly mentioned Susan Taub and should not be mistaken for Susan Daub who is the focus of the story. Susan Taub is a totally different individual unrelated to this case and should not be confused with Susan Daub.
Will Allen was recently charged with operating a Ponzi scheme, and Jack Johnson was rumored to be involved, too.
Yahoo! Sports reported that Allen, a former NFL veteran, was accused of running a Ponzi scheme. The scheme reportedly drew investors to support loans for professional athletes.
Based on the complaint filed by the Securities and Exchange Commission, Allen and business partner Susan Daub, 54, co-founded Capital Financial Partners. The company offered loans to professional athletes and promised investors that they can eventually generate a profit by financing the loans and getting interest amounting to as much as 18 percent.
CBS Sports reported that Capital Financial Partners offered loans at around $75,000 or higher to pro athletes during offseasons and collected investments from about 40 active and former athletes.
The 36-year-old former NFL athlete was alleged to have raised over $31 million from investors using the fraudulent activity. The partners paid $20 million to investors from July 2012 to February 2015, getting over $13 million in loan repayments from the athletes. To pay off other investors, they had to illegally use the money invested by some investors. Capital Financial Partners also have two related entities.
Deadspin reported that the criminal charges were filed in a Boston federal court on April 1, 2015. Allen lives in Davie, Florida, while Daub, a financial professional, lives in Coral Springs, Florida. Allen and Daub are believed to be evading being served with summons. The partners were allegedly not in their residences when the documents were delivered. The SEC went to court to ask permission to serve Allen with an alternate, including email. Judge Indira Talwani granted the government's request.
Paul Levenson, SEC's Boston Regional Office director, said, "As in any Ponzi scheme, the appearance of a successful investment was only an illusion sustained by lies."
More revelations about the charges and comments of Allen and Daub are expected to surface in the following weeks.
In related news, NHL star Jack Johnson's name has also been dragged into the issue after being identified as the recipient of a $5.65 million loan by the group. According to Deadspin, reports show that no such loan has ever been made, but the story was actually a little more complicated. Johnson filed for Chapter 11 bankruptcy protection in October last year. [See the complaint below.]
TMZ reported that Will Allen had allegedly used some of the remaining money for his own use, particularly to party. Investor funds were used to pay for their personal expenses, including hefty charges at casinos, nightclubs and pawnshops.
The former cornerback was drafted by the New York Giants in the first round during the 2001 NFL Draft. He also played for the Miami Dolphins and New England Patriots until 2012. He played five seasons in New York before moving to the Dolphins. During his final year with the Patriots, he was placed on the injured reserve before retiring from the NFL.
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