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UNIVERSITIES NOT SPARED FROM PONZI SCHEME EPIDEMIC

A Texas based money manager has been charged with running a Ponzi scheme that defrauded the Houston Athletics Foundation, a University of Houston entity which funds athletic scholarships. David Salinas, who took his life after the Securities and Exchange Commission (SEC) filed a suit against him and his associate Brian Bjork, was charged with perpetrating a $39 million Ponzi scheme that involved over 100 investors, which included high-profile college coaches. A Ponzi scheme is an unsustainable fraud pyramid that inevitably ends in ruin. Schemers use money raised from latter investors or investors higher up the pyramid to pay an earlier investor's returns. Ponzi schemes invariably fall apart when markets deteriorate or when the schemer is unable to raise more cash. Around $2.2 million of the Foundations assets, having supposedly been invested in bonds, are still unaccounted for.

In Georgia, the SEC charged ex-University of Georgia football coach, Jim Donnan, for his involvement in a Ponzi scheme that defrauded close to 100 investors between August 2007 and October 2010. Mr. Donnan, a College Football Hall of Famer, and his business partner Gregory Crabtree, were charged with perpetrating an $80 million Ponzi scheme through GLC Limited. Investors were told that GLC was in the wholesale liquidation business or reselling damaged retail goods in bulk to discount retailers. Investors were offered short term investments ranging from 2 to 12 months and promised returns between 50 and 380%. It was later discovered that the only $12 million of investors' money was used to buy goods, but the goods ended up being dumped into warehouses in Ohio and West Virginia. The rest of the funds were used to pay returns to investors or were used by Mr. Donnan and Mr. Crabtree for other purposes.

Have you suffered investment losses in one of the above mentioned Texas Ponzi schemes? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.