Former Georgia head football coach Jim Donnan and a business partner were charged by the Securities & Exchange Commission with fraudulently raising $80 million from about 100 investors between 2007 and 2010 in a Ponzi scheme targeting college coaches, former players and others.
A ponzi scheme is perpetuated by using money raised from investors to pay "returns" to other investors giving the appearance of a successful and ongoing business. In most ponzi schemes there is little or no real business being conducted by the promoter, who as you may have guessed, funnels off a portion, if not most, of the money for himself.
In Donnan's scheme, according the SEC, investors were told that their investment dollars were being used to purchase leftover merchandise from major retailers which was to be sold to discount vendors. Investors were promised inordinately high potential returns of over 300%. Donnan capitalized on his notoriety as Georgia's head coach, and later as an ESPN announcer to gather investors. Donnan is in bankruptcy and investors are fighting over what is left.
If an investment proposition being touted to you sounds too good to be true, it probably is and you should fight the temptation to commit your hard earned dollars to it without fully investigating it.
If you have questions about the way your brokerage account is being handled or if you have stock market losses that you do not understand, please do not hesitate to contact us. We have been assisting investors with the recovery of investment losses for more than twenty years.
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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.